This year is shaping up to be a big one for consolidation in the royalty and streaming space.
Earlier this month, Royal Gold Inc (NASDAQ: RGLD) announced the acquisitions of Sandstorm Gold (TSX: SSL) and Horizon Copper Corp (TSXV: HCU) for a combined US$3.7 billion.
Royal Gold will issue 0.0625 of a share for each Sandstorm share held, equating to a 21% premium and valuing Sandstorm at US$3.5 billion.
Horizon shareholders will receive C$2 per share cash for each share held, an 85% premium, valuing the company at US$196 million.
The acquisitions will give Royal Gold 40 additional producing assets, accounting for 65,000-80,000 gold equivalent ounces this year.
It comes after Royal Gold paid US$200 million to acquire a gold stream and NSR royalty on the Solaris Resources’ (TSX: SLS) Warintza copper-gold-molybdenum project in Ecuador in May.
Royal Gold’s expanded portfolio will comprise 393 streams and royalties, largely focused on the Americas, with 80 cash-flowing assets and 47 in development. The company will remain precious metals focused, with its 2025 revenue mix expected to be approximately 87% precious metals, and gold contributing approximately 75% of total revenue.
The company’s top 10 assets within the pro-forma portfolio will be royalties on the producing Mount Milligan, Cortez and Antamina and streams over Pueblo Viejo, Andacollo, Khoemacau and Wassa, as well as royalties over development projects Hod Maden and MARA and a stream over Platreef.
“Upon completion of these transactions, Royal Gold will remain firmly positioned as a leading North American precious metal streaming and royalty company,” Royal Gold CEO Bill Heissenbuttel said.
“Royal Gold has a 40-plus year history of consistently executing a strategy of disciplined growth in gold, and the addition of the Sandstorm and Horizon assets will create a global portfolio of precious metals interests that is unmatched in terms of asset diversification, development and organic growth potential, and exploration optionality.”
Earlier this month, Triple Flag Precious Metals Corp (TSX/NYSE: TFPM) completed the C$421 million acquisition of Orogen Royalties Inc, giving it ownership of a 1% net smelter return royalty on AngloGold Ashanti’s (NYSE: AU) Arthur gold project in Nevada.
Orogen shareholders could choose to receive either cash or Triple Flag shares, as well as 0.25 shares in a newly created spin-off company, which holds all of Orogen’s assets other than the Arthur royalty.
Triple Flag invested C$10 million to acquire around 11% equity interest in Orogen Spinco.
Also this month, Summit Royalty Corp and Eagle Royalties (CSE: ER) entered into an agreement that would see Summit go public via a reverse takeover of Eagle.
It comes after Summit paid IAMGOLD Corporation (TSX: IMG) US$17.5 million for a portfolio of royalties last month.
The combined company will own a silver stream over the Bombore mine and royalties over the Pitangui, AurMac, Zancudo and Lavras do Sul projects.
On Tuesday, Summit agreed to acquire an existing 1% NSR royalty on West Red Lake Gold Mines’ (TSXV: WRLG) producing Madsen project from a fund managed by Sprott Resource Lending Corp for US$9.9 million.
Franco-Nevada Corp (NYSE/TSX: FNV) has also been active this year, paying US$1.05 billion for a 7.5% gross margin royalty on the Côté/Gosselin complex and US$300 million for a 4.25% NSR royalty on the Porcupine Complex, both in Ontario.
Last month, Tether Investments acquired La Mancha Investments’ 31.9% stake in Elemental Altus Royalties Corp (TSXV: ELE), taking its stake in Elemental to 33.7%.
Tether also entered into an option agreement with AlphaStream, granting Tether the option to acquire additional shares in Elemental, which could take Tether’s stake to 47.7%.
Latest deal
Earlier this week, NGEx Minerals (TSX: NGEX) announced it would spin out newly created NSR royalties on the Lunahuasi and Los Helados projects.
The company will create a 1% NSR royalty on the 100%-owned Lunahuasi project in Argentina and a 2% NSR royalty on the Los Helados project in Chile, with a 1.38% NSR to be allocated to a newly incorporated, wholly-owned subsidiary and a 0.62% NSR to be allocated to JX Advanced Metals Corporation, based on each company's respective pro-rata interest in Los Helados.
If approved by NGEx shareholders, NGEx shareholders will receive a quarter of a RoyaltyCo share for every NGEx share held with the spin-off to apply to list its shares on the TSX Venture Exchange.
"NGEx and its predecessor companies have an extremely strong track record of creating very significant value for shareholders through spin-outs and an entrepreneurial, value-driven approach to managing its assets,” NGEx president and CEO Wojtek Wodzicki said.
While some have speculated the deal may pave the way for a takeover of NGEx, Canaccord Genuity analyst Peter Bell described the deal as an innovative strategy for NGEx to add value from its existing land package.
“We have seen a similar strategy used at Vizsla Silver (TSX: VZLA),” he said.
“Creating value through spinouts is a familiar road for the group, which orchestrated the spinoffs of NGEx Minerals in 2019 and Filo Corp in 2016 from Josemaria Resources Inc. (formerly NGEx Resources Inc).”