Each shareholder of Ely will have the option to receive either $1.46 (C$1.46) in cash or 0.2450 of a GRC common share for each share held.
The deal includes cash consideration up to $67.6m (C$84m) and up to 41.5 million of the maximum aggregate number of GRC shares issued.
The combined company will have a development pipeline, including nearly 100 royalties on assets that are in various stages such as production, near-production, development and exploration.
GRC CEO, president and chairman David Garofalo said: “The acquisition of Ely Gold is consistent with our strategy of identifying opportunities to create shareholder value.
“Shareholders of New GRC will benefit through their participation in a larger, well-funded, and more diverse company that has the ability to acquire royalties in a variety of high-return projects globally.”
Subject to the deal completion at the maximum aggregate cash consideration, Gold Royalty shareholders will have a 55% stake in the combined company while Ely Gold shareholders will own 45% on a fully diluted basis.
Moreover, the combined company will have $33m in cash, as well as “greater access to equity and debt capital markets and the critical mass to drive significant growth through acquisitions,” the firms said in a joint statement.
Ely Gold CEO, president and director Trey Wasser said: “This business combination provides the scale, balance sheet, access to capital and management team to drive significant growth and creates an excellent platform for further consolidation in the royalty space.”
Nevada-focused royalty investment company Ely currently owns royalties at three gold mines in Nevada, US, namely Jerritt Canyon; Goldstrike; and Marigold, as well as on the Wallbridge Mining-operated Fenelon mine in Quebec.
The deal is expected to complete in the third quarter of this year.