Gold Royalty Announces Agreement to Acquire Vares Copper Stream

Core Viewpoint - Gold Royalty Corp. has entered into a binding purchase and sale agreement to acquire a copper stream on the Vares Silver Project from OMF Fund III, which is expected to enhance the company's cash flow and revenue significantly. Transaction Details - The acquisition involves a payment of US$50 million, comprising US$45 million in cash and US$5 million through the issuance of 2,906,977 shares of Gold Royalty [2][3]. - The Vares Stream applies to 100% of copper production from the Rupice deposit, with ongoing payments equal to 30% of the LME spot copper price, and an effective payable copper fixed at 24.5% [3]. Production and Financial Expectations - First concentrate production at Vares began in February 2024, with commercial production anticipated in Q4 2024 [3]. - Adriatic Metals plc has provided production guidance of 240-300 kt of ore mined in 2024, with copper grades of 0.5-0.6% [3]. - Future production forecasts include 750-850 kt in 2025 and 800-900 kt in 2026, maintaining copper grades of 0.5-0.7% [3]. Asset Quality and Growth Potential - The Vares Silver Project is characterized by a mine life of 18 years and an attractive operating cost profile, with copper expected to contribute only 2% of life-of-mine revenue [3]. - Studies are in progress to increase annual production rates to 1 million tonnes of ore by 2026, with further exploration opportunities available within the existing concessions [3]. Strategic Alignment - The operating team at Adriatic is highly experienced, with recent initiatives improving productivity and supporting the timeline for commercial production [3][4]. - The acquisition aligns with Gold Royalty's strategy to diversify its portfolio, which is predominantly focused on precious metals, by adding copper exposure amid record copper prices [4]. Project Overview - The Vares Silver Project spans 41 km² and is located near the town of Vares in Bosnia and Herzegovina, representing one of the largest investments in the region [5]. - The project is expected to produce silver and zinc primarily, along with smaller quantities of lead, gold, copper, and antimony [6]. Processing and Production Capacity - The Vares Processing Plant has a nominal capacity of 800,000 tonnes per annum, utilizing advanced technology for processing [7]. - The plant is designed to produce silver-lead and zinc concentrates, which will be transported for shipment to smelters [7]. Funding for the Transaction - The acquisition will be funded through an equity offering and borrowings under an expanded revolving credit facility, which has been increased by US$5 million [13].