Prnewswire·2025-12-08 07:00Core Viewpoint - Gold Royalty Corp. has announced an agreement to acquire a royalty on the Pedra Branca mine for $70 million in cash, which is expected to enhance the company's cash flows and asset portfolio significantly [1][5][6]. Transaction Details - The acquisition involves a payment of $70 million to BlackRock World Mining Trust plc for the royalty on the Pedra Branca mine, which is currently operated by BHP Group Limited [1][5]. - The completion of the acquisition is subject to customary closing conditions, and Gold Royalty has the necessary resources to fund the purchase [5] - After the closing, Gold Royalty will receive all payments related to production from the royalty for periods ending after December 31, 2025 [5]. Financial Impact - For the 12 months ending June 30, 2025, the royalty expense recorded by the previous holder was approximately $7.9 million, equivalent to about 2,800 gold equivalent ounces (GEOs) at an average gold price of $2,811 per ounce [6]. - The acquisition is expected to add significant cash flow to Gold Royalty, particularly due to the current favorable gold pricing environment [6]. Royalty Structure - The royalty includes a 25% net smelter return (NSR) on gold and a 2% NSR on copper produced from the Pedra Branca mine, enhancing Gold Royalty's exposure to both gold and copper [6][7]. - The royalty covers the Pedra Branca East and West deposits and does not include any step-down options, providing full exposure to the asset's long-term potential [6]. Asset Quality - The Pedra Branca mine is a high-quality asset located in Brazil's Carajás region, known for its rich mineral deposits [6][8]. - The mine achieved first production in 2020 and has a mining rate of approximately 800 ktpa, with BHP continuing to extend its mine life and report increases in mineral resources and reserves [6][9][10]. Operator Background - The mine was constructed by OZ Minerals and is currently operated by BHP, which has a strong operational track record [6][9]. - BHP announced the sale of Pedra Branca to CoreX Holding BV, a diversified industrial conglomerate, which is expected to complete the transaction upon satisfying customary conditions [11]. Geographic Context - Pedra Branca is situated in a prolific mining region in Brazil's Pará state, which is home to world-class deposits of various minerals, including iron ore, copper, and gold [6][8].