Elemental Royalties Warns Shareholders Regarding Gold Royalty's Misleading Overstatement of the Value of Gold Royalty's Hostile Bid
Elemental Royalties Warns Shareholders
Regarding Gold Royalty's Misleading
Overstatement of the Value of Gold Royalty's
Hostile Bid
Vancouver, British Columbia--(Newsfile Corp. - April 12, 2022) -
Elemental Royalties Corp. (TSXV:
ELE) (OTCQX: ELEMF) ("
Elemental
" or "
the Company
") today commented on a misleading
overstatement by Gold Royalty Corp. ("
Gold Royalty
") about the value of Gold Royalty's hostile takeover
bid for Elemental (the "
Hostile Bid
") and on Gold Royalty's unfounded criticism of Elemental's recently
completed C$14 million private placement financing (the "
Financing
").
Elemental reminds shareholders that the Hostile Bid involves a share exchange,
not
cash.
Therefore, the
value of the Hostile Bid is directly tied to Gold Royalty's share price performance, which has declined
significantly since Gold Royalty's announcement of its intention to make the Hostile Bid. It is highly
misleading for Gold Royalty to pretend otherwise, as it has attempted to do in a news release and letter
to Elemental shareholders on March 30, 2022, and in Gold Royalty's Notice of Change and Variation of
its Offer to Purchase dated April 11, 2022 (collectively, the "
Gold Royalty Documents
").
The Financing involved the issuance of Elemental shares at a price of C$1.51 per share. This
represented a premium of approximately 15% to the value of the Hostile Bid, which was C$1.31 based
on the price of Gold Royalty shares at the close of trading on March 16, 2022, the last close prior to the
announcement of the Financing.
On March 30, 2022, Gold Royalty falsely contended that the Financing was at a price below the value of
the Hostile Bid. This claim is supported only by Gold Royalty citing the inflated and illusory "unaffected"
price under the Hostile Bid of C$1.78 per Elemental share offered by Gold Royalty approximately three
months earlier, when Gold Royalty announced its Hostile Bid intention on December 20, 2021.
The unaffected price is not relevant to Elemental shareholders given material developments since then,
including disclosure by both companies of acquisitions, operational and financial results, and 2022
guidance.
It appears that Gold Royalty is hoping Elemental shareholders will ignore the decline in the value and the
market price of Gold Royalty's shares since December 20, 2021. Gold Royalty does not disclose in the
Gold Royalty Documents the current implied price under the Hostile Bid, which is well below C$1.78 per
Elemental share. Accordingly, Elemental warns its shareholders to be aware of and carefully consider
the deteriorated share price performance of Gold Royalty since the Hostile Bid, a risk factor identified by
Elemental in its recommendation that Elemental shareholders reject Gold Royalty's Hostile Bid. That
recommendation has not changed.
Board Still Believes the Hostile Bid Undervalues Elemental
Elemental's Board continues to believe that the Hostile Bid, which offers Elemental shareholders only
14% of the combined company's equity at an implied price that is
lower
than the announced Financing,
and significantly undervalues Elemental's business. The Board continues to unanimously and
unequivocally recommend that Elemental shareholders
REJECT
the Hostile Bid and
NOT TENDER
their shares.
The Board's determination followed careful consideration, including advice from its financial and legal
advisors, and the recommendation of the Special Committee. Furthermore, as previously disclosed by
the Company, a majority of Elemental shareholders have communicated to the Company that they do not
intend to accept the Hostile Bid.
A Directors' Circular providing the full details of the Board's recommendation, including the reasons to
REJECT
the Hostile Bid, is available on the Company's website at
https://www.elementalroyalties.com
,
and at
www.sedar.com
.
Elemental shareholders who have questions can contact Morrow Sodali, the information agent,
at 1- 888-777-2158 or by e-mail at
.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the
securities in the United States. The securities have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and
may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption from such registration is available.
Advisors
The Company has engaged Canaccord Genuity Corp. as its sole financial advisor and Fasken
Martineau DuMoulin LLP as legal advisor to the Company and its Board. Longview Communications
and Public Affairs is engaged as communications advisor to the Company. Morrow Sodali is acting as
information agent and strategic advisor to Elemental.
On behalf of Elemental Royalties Corp.
Frederick Bell
CEO and Director
Investor Inquiries:
Frederick Bell, CEO and Director
Direct: +44 (0) 7554 872 794
Email:
John Robins, Director
Direct: +1 (604) 657 6226
Media Inquiries:
Longview Communications and Public Affairs
Alan Bayless, Vancouver: (604) 417-9645,
Andy Lloyd, Toronto: (416) 402-5029,
Elemental is a proud member of Discovery Group. For more information please visit:
www.discoverygroup.ca
or contact 604-653-9464.
TSXV: ELE | OTCQX: ELEMF | ISIN: CA28619L1076
About Elemental Royalties
Elemental is a gold-focused royalty company listed on the TSX-V in Canada and provides investors with
lower risk precious metals exposure through a portfolio of nine high-quality royalties. This enables
investors to benefit from ongoing royalty revenue, future exploration upside and low operating costs.
Elemental's experienced team seeks to secure royalties in advanced precious metals projects, run by
established operators, from its pipeline of identified opportunities.
Neither the TSX-V nor its Regulation Service Provider (as that term is defined in the policies of the TSX-
V) accepts responsibility for the adequacy or accuracy of this press release.
Cautionary note regarding forward-looking statements
This release contains certain "forward looking statements" and certain "forward-looking information" as
defined under applicable Canadian securities laws. Forward-looking statements and information can
generally be identified by the use of forward-looking terminology such as "may", "will", "should", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology (including negative
and grammatical variations).
Forward-looking statements and information include, but are not limited to; the Ming Mine, statements
related to the availability of alternative strategic options alternatives for the Company or the Company
continuing business as usual, and whether such options represent greater value to Elemental's
shareholders; and whether any takeover or change of control transaction involving the Company will
occur and/or be completed and as to the timing thereof.. Forward-looking statements and information
are based on forecasts of future results, estimates of amounts not yet determinable and assumptions
that, while believed by management to be reasonable, are inherently subject to significant business,
economic and competitive uncertainties and contingencies. Forward-looking statements and information
are subject to various known and unknown risks and uncertainties, many of which are beyond the ability
of Elemental to control or predict, that may cause Elemental's actual results, performance or
achievements to be materially different from those expressed or implied thereby, and are developed
based on assumptions about such risks, uncertainties and other factors set out herein, including but not
limited to: the requirement for regulatory approvals and third party consents; the impact of general
business and economic conditions; the absence of control over the mining operations from which
Elemental will receive royalties, including risks related to international operations, government relations
and environmental regulation; the inherent risks involved in the exploration and development of mineral
properties; the uncertainties involved in interpreting exploration data; the potential for delays in
exploration or development activities; the geology, grade and continuity of mineral deposits; the impact
of the COVID-19 pandemic; the possibility that future exploration, development or mining results will not
be consistent with Elemental's expectations; accidents, equipment breakdowns, title matters, labour
disputes or other unanticipated difficulties or interruptions in operations; fluctuating metal prices;
unanticipated costs and expenses; uncertainties relating to the availability and costs of financing needed
in the future; the inherent uncertainty of production and cost estimates and the potential for unexpected
costs and expenses, commodity price fluctuations; currency fluctuations; regulatory restrictions, including
environmental regulatory restrictions; liability; competition; loss of key employees and other related risks
and uncertainties. Elemental undertakes no obligation to update forward-looking information except as
required by applicable law. Such forward-looking information represents management's best judgment
based on information currently available. No forward-looking statement can be guaranteed, and actual
future results may vary materially. Accordingly, readers are advised not to place undue reliance on
forward-looking statements or information.
Not for distribution to U.S. news wire services or for dissemination in the United States.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/120171