Royal Gold subsidiary International Royalty has entered into a binding agreement to acquire all of the issued and outstanding common shares of fellow precious metals stream and royalty company Great Bear Royalties.
Great Bear Royalties president and CEO Calum Morrison said on Monday the decision was made after a thorough strategic review process.
“Following the significant discoveries made by Great Bear Resources exploration team in 2019, the spinout of a 2% net service revenue in 2020 into Great Bear Royalties aimed to provide shareholders with the best possible value accretion,” he said.
Following the acquisition of Great Bear Resources by Kinross Gold for about C$1.8-billion earlier this year, Morrison said that interest in Great Bear Royalties had been significant.
“We strongly support Royal Gold’s offer to acquire the company and encourage all shareholders to do so as well,” he said.
“The Great Bear saga represents one of the great Canadian gold discoveries of the past century. From the identification of a previously overlooked part of the Red Lake camp and the application of best-in-class geoscience, the amount of value created . . . has been significant,” Great Bear Royalties board chairperson John Robins said
Under the terms of the transaction, Great Bear Royalties shareholders will receive an all-cash consideration of C$200-million, representing C$6.65 a Great Bear Royalties common share on a fully diluted basis.
The transaction price represents a premium of 51.1% and 43% to the closing price and the 20-day volume-weighted average price, respectively, of Great Bear Royalties’ shares on the TSX-V as at July 8.