Sandstorm Gold buys Premier Royalty
TORONTO (miningweekly.com) – Gold streaming firm Sandstorm Gold on Wednesday announced it had entered into an arrangement agreement to buy smaller gold streaming company Premier Royalty in an all-scrip deal valued at C$28.3-million, based on Sandstorm's closing share price on Tuesday.
Under the agreement, Sandstorm would acquire all the outstanding common shares of Premier Royalty on the basis of 0.145 of a Sandstorm share for each Premier Royalty share held.
The arrangement valued Premier Royalty at about C$0.89 a share, representing a premium of 16% to its 20-day volume-weighted average trading price on the TSX of about C$0.77 apiece.
Holders of outstanding warrants and options to acquire Premier Royalty shares would receive 0.145 of a Sandstorm share should they be exercised.
Premier Royalty shareholders have to approve the arrangement during a special meeting planned for September, as well as the Ontario Superior Court and the TSX.
Premier Royalty agreed to pay Sandstorm a termination fee of C$2-million, should it break the arrangement.
Sandstorm Gold posted a second-quarter net loss of $17.1-million, owing to a noncash impairment charge of $16-million on goodwill related to the Premier Royalty acquisition.
Premier Royalty forecast 2013 attributable production of between 33 000 oz and 40 000 oz of gold equivalent, increasing to more than 60 000 oz/y of gold equivalent by 2016. This growth would be driven by the company’s portfolio of gold streams with mines, all of which are either currently producing or expected to start production by 2015.
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