Elemental adds two top-ten royalty assets to portfolio, transfers early-stage projects to Carlin East
Nasdaq- and TSX-listed Elemental Royalty has secured agreements that will materially increase the scale and cash-generating capacity of its royalty portfolio, as well as simplify its corporate structure.
Elemental has a definitive agreement in place to acquire a high-quality precious metals portfolio in North America from Orion Mine Finance Management comprising five streams and royalties for $290-million, of which $200-million is a cash consideration and the balance an equity consideration of 4.2-million Elemental shares, equating to a 5.6% stake, to be issued to Orion.
The portfolio acquisition includes exposure to i-80 Gold Corporation's Ruby Hill Complex (silver) and Mansa Resources' Kouroussa (gold) projects, which will rank in the top five and top ten assets, respectively, in Elemental's portfolio.
Moreover, Elemental has also entered into a non-binding agreement with Carlin East whereby it will acquire Elemental's Generation business - comprising wholly-owned exploration projects, including option agreements and early-stage exploration royalties.
In exchange, Elemental will be granted a cornerstone equity stake in Carlin East, with Elemental CEO and director David Cole having resigned effectively immediately to take up a leadership position at Carlin East.
In turn, Elemental COO, president and founder Frederick Bell has been appointed to Elemental CEO and director on the board.
The strategic divestment of the Generation business allows Elemental to retain the existing portfolio of more than 100 early-stage royalties accumulated over more than a decade, and to participate as the largest shareholder in future Generation royalties through ownership of Carlin East.
"Together, these transactions mark important milestones in a defining year of growth for Elemental. Over the past 12 months we have exponentially increased the scale of the business, strengthened the quality of our portfolio through high-quality transactions including the combination with EMX, acquisition of Vizsla Royalties, and the Orion portfolio announced today.
"With these simultaneous transactions we create a larger, simpler and more focused royalty company while retaining the upside directly and indirectly from the company’s Generation business. We will continue to deliver on our ambition of building a leading global royalty and streaming company with a dedicated growth trajectory," says Elemental chairperson Juan Sartori.
Elemental has, accordingly, adjusted upward its gold equivalent ounce guidance for the full-year to between 19500 oz and 22000 oz, from between 18000 oz and 20500 oz previously. The company expects its full-year revenue to be between $89-million and $101-million.
