Gold Royalty (GROY) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of a 100% copper stream from the Vareš Silver-Copper Mine/Vares project adds a high-quality, long-life, low-cost polymetallic asset, enhancing revenue and cash flow per share, and diversifying cash flow beyond gold while leveraging management’s copper expertise.

• The project offers significant expansion and exploration potential, aligning with the strategy to diversify and grow the portfolio.

• The project is operated by an experienced team and is one of the largest investments in Bosnia and Herzegovina, providing economic and social benefits to the region.

• The transaction supports peer-leading growth, with a focus on high-quality, cash-flowing assets and a robust organic pipeline for future growth.

Financial terms and conditions

• The acquisition price is $50 million, funded by $45 million in cash and $5 million in shares (2,906,977 shares issued to Orion), following an exclusive bilateral negotiation.

• Funding sources include positive free cash flow, a $34.5 million equity issuance, a $30 million bought deal equity offering, and an upsized revolving credit facility.

• The stream covers 100% of copper production from the Rupice deposit, with ongoing payments set at 30% of the LME spot copper price and a fixed payability of 24.5%.

Synergies and expected cost savings

• The Vareš stream is expected to generate consistent, accretive cash flows due to the fixed payability factor, reducing variability and risk.

• The mine benefits from existing infrastructure, resulting in a low capital cost of $189 million for construction.

• Addition of the Vareš stream is expected to drive peer-leading cash flow growth through the end of the decade.