Precious metals streaming company Royal Gold has agreed to purchase all of the issued and outstanding shares of Canada-based precious metals royalty and streaming company Great Bear Royalties for an all-cash consideration of C$200m ($153.9m).
The consideration of C$6.65 a share marks a 51.1% premium to Great Bear’s closing price on 8 July 2022.
Great Bear’s primary asset is a 2% net smelter return royalty that covers the Great Bear project in the Red Lake district of Ontario, Canada. This project is indirectly owned and operated by Kinross Gold.
As part of the due diligence process, Royal Gold’s wholly owned subsidiary International Royalty Corporation (IRC) signed a cooperation agreement with Kinross.
This deal provides access to Kinross personnel and certain non-public information related to the Great Bear project for IRC.
In exchange, IRC will alter certain terms of the royalty agreement upon closing the transaction.
These include providing Kinross with an option to purchase a 25% stake in the net smelter return royalty equivalent to 25% of IRC’s purchase price of GBR.
Royal Gold CEO Bill Heissenbuttel said: “The royalty represents one of the few royalty interests that meets all the characteristics we seek in our investments, namely the high quality of management, project and jurisdiction.
“Our unique approach to the transaction allowed us to work closely with Kinross to understand the technical aspects of the Great Bear project and their vision for the development of what I believe will be a top-tier asset in terms of production and mine life.”
Planned to be closed in the third quarter of this year, the deal awaits clearance from Great Bear Royalties shareholders, court, regulators, and other customary closing conditions.
Said to be Canada’s newest major gold discovery, the Great Bear Project comprises 9,140ha of contiguous claims.
Located 25km south-east of Red Lake, Ontario, the project has significant exploration upside potential and hosts a prolific gold system. It also has
According to Kinross, 80% of the property remains unexplored.
Kinross is carrying out a comprehensive exploration and development programme at the Great Bear Project to support its vision of a large, long-life mining complex.