Canadian royalty company Altius to merge with peer TNR Gold
Altius Minerals Corporation has entered into a definitive agreement to acquire fellow Canadian royalty and streaming company TNR Gold Corporation.
The transaction will afford Altius control over TNR’s portfolio of royalty assets, including interests in the Los Azules copper project, the Mariana lithium project and Josemaria copper/gold project, all in Argentina.
Under the terms of the deal, each TNR common share, other than shares held by Altius or shareholders who validly exercise dissent rights, will be exchanged for 0.0072 common shares of Altius and 0.25 of a common share of a newly formed British Columbia company.
The transaction values TNR at about $122-million, with the share exchange offer amounting to $0.48 apiece – a 60% premium to the closing trading price of TNR’s common shares on the TSX-V on November 10.
Altius will retain about 12% of the issued and outstanding shares of the spin-out company that is planned to indirectly hold the Shotgun project in Alaska. Altius will retain a 0.5% net smelter return royalty on the Shotgun project.
Altius has agreed to subscribe for $2.2-million in the TNR spin-out company’s common shares to increase its interest to about 19.9% at an agreed valuation of $25-million.
Altius will also provide the new spin-out company with technical support relating to project generation initiatives and exploration activities.
“The takeover of TNR adds a significant development stage royalty over the Los Azules project, which offers the potential for decades of increased copper exposure within our portfolio. It also results in the consolidation of an operating stage royalty relating to the Mariana lithium brine project.
“Both of these assets feature attributes that are hallmarks of Altius’ long-term royalty investing strategy. With long to ultra-long potential resource lives, they provide growth optionality over multiple commodity cycles as well as projected cost curve positions that ensure long-term resilience,” comments Altius CEO Brian Dalton.
SPIN-OUT CONTEXT
The transaction will be completed by way of a court-approved plan of arrangement under the Business Corporations Act of British Columbia.
Immediately before Altius acquires TNR, TNR’s outstanding common shares will be reorganised into a new class of TNR shares and about 88% of the spin-out company shares will be distributed to TNR shareholders.
The newly created TNR shares will then be acquired by Altius in exchange for Altius common shares. On completion of the transaction, TNR will become a wholly owned subsidiary of Altius, while the spin-out company will remain separately owned by former TNR shareholders (88%) and Altius (12% or 19.9% pending a successful subscription).