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Monarch Mining Corporation Announces a $11.25 Million Transaction With Gold Royalty Corp.

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Monarch Mining Corporation Announces a $11.25 Million Transaction With Gold Royalty Corp.

 

 

 

 

 

  • Transaction aimed at strengthening Monarch’s balance sheet in preparation for the Beaufor mine and Beacon mill reopening
  • Non-dilutive financing to increase Monarch’s cash and cash equivalent position to approximately $30 million

MONARCH MINING CORPORATION (TSX: GBAR) (OTCQX: GBARF) is pleased to announce that it has entered into a definitive agreement with Gold Royalty Corp. (NYSE: GROY) whereby Gold Royalty will acquire the following royalty interests from Monarch for cash proceeds of $11.25 million:

 

  • a $2.50 per tonne royalty on all material processed through the Beacon mill originating from the Beaufor mine operations; and
  • a 2.5% net smelter return royalty on each of the Croinor Gold, McKenzie Break and Swanson properties, of which half (1.25%) can be bought back by Monarch for $2 million per property in the future, subject to certain conditions being met.

 

As a condition and as part of the Transaction, Gold Royalty will also acquire a 1% NSR on the Beaufor property from Caisse de dépôt et placement du Québec and the Corporation’s existing buy back rights relating to a 1% NSR will be cancelled and extinguished, following which CDPQ will own a 2% NSR and Gold Royalty a 1% NSR on Beaufor. CDPQ’s royalty interest will be reduced to a 1% NSR once Monarch repays the $5 million capital invested by CDPQ (see Monarch press release dated May 7, 2020).

 

Following the closing of the Transaction, Monarch will have a strengthened balance sheet with approximately $30 million in cash and cash equivalents.

 

“We are very pleased to have signed this non-dilutive financing agreement with Gold Royalty, which will be applied mainly to capital expenditures and equipment purchases for the Beaufor mine and Beacon mill reopening and to strengthening our balance sheet,” said Jean-Marc Lacoste, President and Chief Executive Officer of Monarch. “With the current volatility in the gold market, it was important for us to find another way to secure the additional funds we needed to restart our operations, and we were satisfied with the valuation of our mining projects. It was also important for us to negotiate a partial buyback option for our longer-term Croinor Gold, McKenzie Break and Swanson properties for future plans that may result in those projects being put into production.”

 

Laurentian Bank Securities Inc. is acting as financial advisor to Monarch in connection with the Transaction.

 

The Transaction is expected to close in August 2021 and is subject to certain customary closing conditions for transactions of this nature.

 

About Gold Royalty

 

Gold Royalty Corp. is a gold-focused royalty company offering creative financing solutions to the metals and mining industry. Its mission is to acquire royalties, streams and similar interests at varying stages of the mine life cycle to build a balanced portfolio offering near, medium and longer-term attractive returns for its investors. Gold Royalty’s diversified portfolio currently consists of net smelter return royalties ranging from 0.5% to 2.0% on 18 gold properties covering 12 projects located in the Americas.

 

About Monarch

 

Monarch Mining Corporation is a fully integrated mining company that owns four advanced projects, including the fully permitted past-producing Beaufor Mine, which has produced more than 1 million ounces of gold over the last 30 years. Other advanced assets include the Croinor Gold, McKenzie Break and Swanson properties, all located near Monarch’s wholly owned and fully permitted Beacon 750 tpd mill. Monarch owns 28,702 hectares (287 km2) of mining assets in the prolific Abitibi mining camp.

 

Posted July 23, 2021

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