Coeur Mining to buy, create own royalty firm
TORONTO (miningweekly.com) – Chicago-based Coeur Mining this week said it would buy Vancouver-based precious metals royalty firm Global Royalty Corp, which has interests in operating mines in Mexico and Ecuador.
NYSE-listed Coeur outbid Blackhawk Resource Corp to acquire Global Royalty for $23.8-million, which comprised $300 000 in cash and the balance in common shares.
Coeur, which is the largest US-based primary silver producer, had also created a subsidiary, Coeur Capital, to hold existing and future royalty and streaming interests.
Upon closing of the transaction, Global Royalty president and CEO Mark Kucher has agreed to join Coeur Capital as MD and would have the responsibility for its daily management and growth. Kucher, who is the largest shareholder of Global Royalty, has agreed to support the transaction with Coeur.
Global Royalty owns a tiered royalty agreement with McEwen Mining on its El Gallo mine, in Mexico, which entails a 3.5% net smelter royalty (NSR). It also has an agreement with Dynasty Metals & Mining, which entails a 1.5% NSR on the Zaruma gold project, in Ecuador.
Coeur added that Global Royalty also had an option to acquire an additional 1.5% NSR on Zaruma (for a total of 3%), plus 1% NSR interests on Dynasty’s Jerusalem and Dynasty Goldfields projects, in Ecuador, for an additional $5-million, which Coeur Capital intends to exercise upon closing the Global Royalty transaction.
However, Dynasty hit back saying that, while it was continually considering potential opportunities with respect to its operations, it had not made any decisions to grant to Global Royalty or any other party an option to acquire an additional NSR royalty on any of its properties.
Coeur’s NYSE-listed stock on Tuesday traded $0.32 lower at $10.52 apiece.
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