VANCOUVER - Gold Royalty Corp. (NYSE American: GROY) has entered into an agreement with a syndicate of underwriters for a bought deal offering, aiming to raise approximately $30 million. The offering involves 17,442,000 units at a price of $1.72 per unit, with each unit comprising one common share and one warrant, exercisable at $2.25 for 36 months.
The company has also provided the underwriters an over-allotment option, potentially increasing the gross proceeds by up to $4.5 million. The common shares and warrants are expected to be listed on the NYSE American, with efforts to list the warrants post-closing.
Proceeds from the offering are designated to partially fund the acquisition of a copper stream in Bosnia and Herzegovina from Orion Mine Finance Management LP. The acquisition, valued at $50 million, includes $45 million in cash and $5 million through the issuance of Gold Royalty shares.
The offering, set to close around May 31, 2024, is not contingent on the acquisition's completion. Should the acquisition not proceed, funds may be reallocated for general corporate purposes.
This offering is available in Canadian provinces and territories, excluding Quebec and Nunavut, and is based on the company's Canadian short form base shelf prospectus and the U.S. registration statement, which includes a prospectus. The securities are offered solely by the prospectus and its supplement.
Gold Royalty Corp., a gold-focused royalty company, provides financing solutions to the mining industry, primarily holding net smelter return royalties on gold properties in the Americas.
The information regarding the offering and acquisition is based on a press release statement from Gold Royalty Corp.
InvestingPro Insights
In light of Gold Royalty Corp.'s (NYSE American: GROY) recent move to raise capital through a bought deal offering, potential investors may find the following insights from InvestingPro particularly enlightening. With a market capitalization of $280.14 million, the company’s financial health and future prospects are of keen interest to market watchers.
Firstly, analysts are forecasting a significant increase in sales for the current year, suggesting optimism about the company's revenue-generating ability. This is particularly relevant as GROY seeks to fund its strategic acquisition of a copper stream, which could further enhance its growth trajectory. However, it's worth noting that analysts do not expect the company to be profitable this year, and it has not been profitable over the last twelve months. This context is crucial for those considering participating in the offering, as it underscores the speculative nature of the investment.
InvestingPro Data further details the company's financial metrics, with a striking revenue growth of 110.62% in the last twelve months as of Q1 2024. This impressive figure aligns with the analysts' sales growth expectations and may signal a strong upside potential for the company. Additionally, the significant quarterly revenue growth of 277.31% in Q1 2024 further highlights the company's expanding financial footprint. The P/E Ratio, however, stands at -11.04, reflecting the company's current lack of profitability.
For investors seeking a comprehensive analysis, there are additional InvestingPro Tips available that delve deeper into Gold Royalty Corp.'s financials and market performance. These insights can be accessed at https://www.investing.com/pro/GROY. Moreover, for those ready to take advantage of these insights, using the coupon code PRONEWS24 will grant an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more value to the discerning investor.
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