Royal Gold (NASDAQ:RGLD) said on Monday it agreed to acquire Great Bear Royalties (OTCPK:GBRBF) for C$6.65/share, or C$199.5M in cash.
Great Bear’s (OTCPK:GBRBF) only material asset is a 2% net smelter return royalty that covers all of the Great Bear Project in Ontario, indirectly owned and operated by Kinross Gold (KGC).
Great Bear said it entered into a co-operation agreement with Kinross (KGC) that provided access to Kinross personnel and certain non-public information pertaining to the project; in exchange, Great Bear amended certain terms of the royalty agreement upon closing of the acquisition, including providing an option to Kinross to purchase a 25% interest in the royalty for an amount equal to 25% of purchase price of Great Bear, adjusted for inflation.
The Great Bear Project, Canada’s newest major gold discovery, is considered an “emerging world class gold project with long-term growth potential.”
Royal Gold’s (RGLD) organic growth pipeline allows it to grow earnings even with flat metal prices, Taylor Dart writes in an analysis posted on Seeking Alpha.
