VANCOUVER – Versamet Royalties Corporation (NASDAQ:VMET) (TSX:VMET) completed the acquisition of a 3.52% gold stream on the Eskay Creek gold-silver project for $340 million in cash and 2,054,906 common shares, according to a press release statement. The acquisition comes as VMET shares have surged 130% over the past year, with the stock currently trading at $12.04 and a market capitalization of $1.31 billion.
The company purchased the stream from fund entities managed by Orion Resource Partners LP and affiliates of Blackstone Inc. The stream entitles Versamet to receive 3.52% of payable gold production for the life of the mine, provided completion tests are achieved by September 30, 2027.
Versamet funded the cash payment through an amended credit facility with Bank of Montreal and National Bank of Canada. The facility includes a $250 million revolving component maturing in March 2029 and a $150 million term facility maturing in March 2028.
Eskay Creek is expected to produce an average of over 300,000 ounces of gold annually in its first five years and approximately 230,000 ounces per year over its initial 12-year life, based on information from project operator Skeena Gold & Silver.
For gold ounces delivered under the stream, Versamet will make ongoing payments equal to 10% of the spot gold price at delivery. The stream has no cap, step-downs, or buydown provisions.
If completion tests are not satisfied by September 30, 2027, the stream percentage increases incrementally each quarter, reaching 3.57%, 3.62%, or 3.67% depending on when completion occurs, with additional increases of 0.13% per quarter thereafter until tests are satisfied.
The agreement includes a minimum delivery provision requiring a one-time gold delivery if 2.61 million cumulative ounces have not been produced by April 1, 2040. The stream is secured over Eskay Creek project assets.
The amended credit facility provides for a $100 million accordion on the revolving facility once the term facility is repaid.
In other recent news, Versamet Royalties Corporation has announced a significant acquisition involving a $360 million gold stream on the Eskay Creek gold-silver project in British Columbia. The agreement involves a 3.52% gold stream and was finalized with fund entities managed by Orion Resource Partners LP and affiliates of Blackstone Inc. The transaction comprises $340 million in cash and an additional $20 million in Versamet common shares. This acquisition covers production from the Eskay Creek project, which is owned by Skeena Resources Limited. These recent developments highlight Versamet’s strategic moves in the mining sector. The transaction reflects the company’s ongoing efforts to expand its portfolio and increase its stake in valuable mining projects. Such moves are often closely watched by investors looking for growth opportunities in the resources sector.
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