Gold Royalty Corp. (NYSEAM:GROY) signed an agreement to acquire Ely Gold Royalties Inc. (TSXV:ELY) from 2176423 Ontario Ltd. and Others for approximately CAD 240 million on June 21, 2021. Under the terms of the Agreement, which was negotiated at arms-length, each holder of Ely Shares will have the option to receive consideration per Ely Share of either CAD 1.46 in cash, or 0.2450 of a GRC common share ("GRC Share"), subject to pro-ration based on a maximum aggregate cash consideration of CAD 84 million and a maximum aggregate number of GRC shares issued of approximately 41.5 million. The share exchange ratio implies a mix of CAD 0.42 in cash plus 0.1742 of a GRC Share per Ely Share on a fully diluted, in-the-money, and fully pro-rated basis (assuming the maximum aggregate cash consideration of CAD 84 million). The agreement provides for, among other things, non-solicitation covenants, with "fiduciary out" provisions that allow Ely Gold to consider and accept a superior proposal, subject to a "right to match period" in favor of GRC. At closing, assuming maximum aggregate cash consideration of CAD 84 million, existing GRC and Ely Gold shareholders will own approximately 55% and 45%, respectively, of GRC after giving effect to the arrangement ("New GRC") on a fully diluted, in-the-money, and fully-prorated basis. The agreement also provides for a termination fee of CAD 10 million to be paid by Ely Gold to GRC if the agreement is terminated in certain specified circumstances. GRC is also entitled to expense reimbursement in the amount of CAD 2 million payable if the agreement is terminated in certain circumstances. Ely Gold is also entitled to expense reimbursement in the amount of CAD 2.0 million payable if the agreement is terminated in certain circumstances. The Directors and senior officers of Ely Gold, holding in aggregate approximately 5% of the issued and outstanding common shares of Ely Gold, have entered into voting support agreements with GRC, pursuant to which they have agreed to vote their shares in favor of the arrangement at the Ely Gold Meeting. In addition, Eric Sprott, who indirectly beneficially owns in the aggregate approximately 22% of the issued and outstanding common shares of Ely Gold, has entered into a voting support agreement with GRC, pursuant to which he has agreed to vote his shares in favor of the arrangement at the Ely Gold Meeting.

Completion of the arrangement will require: execution of dissidents rights, approval of at least 66 2/3% of the votes cast by Ely Gold shareholders at the Ely Gold Meeting, and approval of a simple majority of the votes cast by Ely Gold shareholders at the Ely Gold Meeting, excluding votes from certain management shareholders, as required under Multilateral Instrument 61-101. TSXV Approval of the Arrangement, NYSE American Approval for the listing of the GROY Shares issued pursuant to the Arrangement and third party approvals. Completion of the arrangement is also subject to the receipt of court and stock exchange approvals, and other customary closing conditions for transactions of this nature. The transaction has been unanimously approved by Board of Ely. The transaction has also been approved by the Board of Gold Royalty. Ely Gold Royalties announced the record date for voting at the Ely Gold shareholder meeting to consider the transaction is July 14, 2021. Holders of record on that date will have the right to vote their shares at the special general meeting scheduled for August 17, 2021. The deadline for shareholders to make an election as between the Gold Royalty stock and the cash option is August 12, 2021. To proceed, the transaction must receive a special majority of at least 2/3rds of the votes cast at the Ely Gold shareholder meeting. At special meeting held August 17, 2021 the shareholders of Ely Gold approved the merger. As per the meeting held on August 17, 2021, the transaction was approved by the Ely Gold Shareholders. As of August 20, 2021, final order from the Supreme Court of British Columbia has been obtained. The companies are working towards closing the transaction in the third quarter of 2021. As of August 12, 2021, the transaction is expected to close in August 2021. As of August 18, 2021, The Arrangement is currently expected to be completed on or about August 23, 2021, provided that all of the conditions to the Arrangement are satisfied or waived. The completion of the Arrangement remains subject to the final acceptance of the TSXV.


Clarus Securities Inc. provided fairness opinion to the Board of Ely. Haywood Securities Inc provided fairness opinion to the Board of GRC. BMO Capital Markets is acting as financial advisor to GRC and Haywood Securities Inc. is acting as financial advisor to the GRC Board of Directors in connection with the transaction. Rod Talaifar of Sangra Moller LLP is acting as GRC's Canadian legal advisor and Haynes & Boone LLP and Holland & Hart LLP are acting as GRC's U.S. legal advisors. Laurentian Bank Securities Inc. is acting as financial advisor to Ely Gold in connection with the transaction. David Hunter, Samantha Chang of Dentons is acting as legal advisor to Ely Gold and Jennifer Traub of Cassels Brock & Blackwell LLP is acting as legal advisor to the Special Committee in connection with the transaction. Gryphon Advisors Inc. acted as an information agent for Ely and will be paid fee CAD 40,000, plus reasonable out of pocket expenses. AST Trust Company (Canada) acted as transfer agent for Ely. Cassels Brock & Blackwell LLP acted as legal advisor to the Special Committee in connection with the transaction.

Gold Royalty Corp. (NYSEAM:GROY) completed the acquisition of Ely Gold Royalties Inc. (TSXV:ELY) from 2176423 Ontario Ltd. and Others on August 23, 2021. In connection with completion of the transaction, Trey Wasser was appointed to the Board of Directors of Gold Royalty Corp.