Gold Royalty Completes Acquisition of Québec Royalty Portfolio

Rhea-AI Summary

Gold Royalty Corp. (GROY) completes the acquisition of a portfolio of 21 royalties located in Québec from SOQUEM for C$1.0 million, satisfied through the issuance of 496,785 common shares. The royalty portfolio includes various commodities such as gold, silver, copper, zinc, and nickel.

Insights

Financial Analyst

Assessing the acquisition of a portfolio of 21 royalties by Gold Royalty Corp. from SOQUEM, the transaction is significant due to the strategic expansion in Québec's mining sector. The consideration of C$1.0 million, paid in common shares, reflects a non-cash transaction that could be accretive to Gold Royalty's earnings. With commodities like gold (Au), silver (Ag), nickel (Ni) and zinc (Zn) included, the diversity of the portfolio mitigates sector-specific risks.

The Net Smelter Return (NSR) royalties vary from 0.5% to 3.0%, offering Gold Royalty a percentage of the gross revenue from the mined metal without bearing the costs of production. This type of royalty is highly favorable in the mining industry as it provides exposure to commodity prices with limited operational risk. The transaction appears to be a strategic move to leverage Québec's mineral-rich landscape and the ongoing bull market for precious metals, potentially increasing shareholder value.

Industry Analyst

The acquisition of royalties in Québec's mining sector indicates a bullish outlook on the region's mineral potential. Québec is known for its stable political climate and supportive mining laws, which bodes well for the long-term viability of these investments. The transaction diversifies Gold Royalty's portfolio across different operators and commodities, which is a prudent risk management strategy.

It is essential to consider the operators' track record and the stage of development for each property. Established operators like IAMGOLD and Probe Gold suggest mature projects with a higher likelihood of consistent royalty streams. However, the inclusion of junior miners like Sirios Resources and Midland Exploration indicates that some royalties are tied to projects that may still be in the exploration or development phase, posing higher risks but also offering potentially higher rewards.

Mining Sector Legal Expert

From a legal perspective, the transaction structure using share issuance at a deemed price of approximately US$1.50 per share indicates a non-dilutive financing strategy for Gold Royalty Corp. This approach avoids increasing debt or diluting existing shareholders' equity significantly. However, the legal intricacies of mining royalties, such as transferability, duration and the right to cure defaults, can have substantial implications on the actual revenue generated from these assets.

Furthermore, the impact of environmental regulations and indigenous land claims in Québec must be considered, as these factors can affect the timeline and feasibility of mining operations. The robustness of the legal due diligence conducted prior to the acquisition will play a critical role in mitigating potential legal challenges and securing the anticipated revenue stream from the royalties.

VANCOUVER, BC, Dec. 21, 2023 /PRNewswire/ - Gold Royalty Corp. ("Gold Royalty" or the "Company") (NYSE American: GROY) is pleased to announce that, further to its news release dated November 2, 2023, it has completed the acquisition of a portfolio of 21 royalties located in Québec from SOQUEM (Société Québécoise d'exploration minière), a subsidiary of Investissement Québec.

Pursuant to the transaction, the Company acquired the royalty portfolio for consideration C$1.0 million, which was satisfied through the issuance of 496,785 common shares to SOQUEM at a deemed price of approximately US$1.50 per share.

Table 1. SOQUEM Royalty Portfolio

Property	Royalty	Commodities	Operator
Aquilon	1.0% NSR	Au	Sirios Resources
Casault	1.0% NSR	Au	Midland Exploration
Chute-des-Passes	0.5% NSR	Ni	Canada Silver Cobalt Works
Des Meloizes	3.0% NSR	Zn, Ag	Generic Gold Corp
Detour	Milestone Payment	Au	Probe Gold
Dileo Nord	1.0% NSR	Cu, Mo, Au, Ag	Troilus Gold Corp
Duquet	0.75 NSR	Zn, Cu, Pb, Au	Azimut Exploration Inc.
Eastmain Ouest	0.7% NSR	Au	Azimut Exploration Inc.
Fancamp	1.5% NSR	Au	IAMGOLD
Generation Selbaie Bloc 5-6	1.0% NSR	Au, Ag	Midland Exploration
Generation Selbaie Bloc 7	0.5% NSR	Zn	Maple Gold Mines / Agnico Eagle
Gîte Fenton	1.0% NSR	Au, Mo	Cartier Resources Inc
Hazeur	1.0% NSR	Au	BTM Corporation
Jouvex	1.0% NSR	Au	Midland Exploration
La Roncière	1.25% NSR	Au	Imperial Mining Group
Lingwick	1.5% NSR	Cu, Zn, Au, Ag	Midland Exploration
Monique	0.38% NSR	Au	Probe Gold
Noyard	1.0% NSR	Au	Vior
Noyell	1.0% NSR	Au, Zn	Magna Terra Minerals
Pitt Gold	1.0% NSR	Au	Duquesne Gold Mines (First Mining)
Quévillon Nord	1.0-2.0% NSR	Ag	Osisko Mining
Verneuil	0.5% NSR	Au	Vior

About Gold Royalty Corp.

Gold Royalty Corp. is a gold-focused royalty company offering creative financing solutions to the metals and mining industry. Its mission is to acquire royalties, streams and similar interests at varying stages of the mine life cycle to build a balanced portfolio offering near, medium and longer-term attractive returns for its investors. Gold Royalty's diversified portfolio currently consists primarily of net smelter return royalties on gold properties located in the Americas.

View original content:https://www.prnewswire.com/news-releases/gold-royalty-completes-acquisition-of-quebec-royalty-portfolio-302021372.html

SOURCE Gold Royalty Corp.

FAQ

What did Gold Royalty Corp. (GROY) acquire from SOQUEM?

Gold Royalty Corp. acquired a portfolio of 21 royalties located in Québec from SOQUEM.

How much did Gold Royalty Corp. (GROY) pay for the acquisition?

Gold Royalty Corp. paid C$1.0 million for the acquisition.

How was the payment for the acquisition satisfied?

The payment for the acquisition was satisfied through the issuance of 496,785 common shares.

What commodities are included in the acquired royalty portfolio?

The acquired royalty portfolio includes commodities such as gold, silver, copper, zinc, and nickel.