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Gold Royalty and Ely Gold merge to create new royalty company with a peer-leading resource endowment in the Americas

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(Kitco News) - Gold Royalty (NYSE American: GROY) and Ely Gold Royalties (TSX-V: ELY, OTCQX: ELYGF) announced today that they have entered into a definitive agreement, dated June 21, 2021, pursuant to which Gold Royalty will acquire all of the issued and outstanding common shares of Ely Gold.

According to the statement, 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: (i) C$1.46 in cash, or (ii) 0.2450 of a Gold Royalty common share, subject to pro-ration based on a maximum aggregate cash consideration of C$84 million and a maximum aggregate number of Gold Royalty shares issued of approximately 41.5 million.

The share exchange ratio implies a mix of C$0.42 in cash plus 0.1742 of a Gold Royalty share per Ely share on a fully diluted, in-the-money, and fully pro-rated basis (assuming the maximum aggregate cash consideration of C$84 million). Such consideration represents a premium of approximately 42% to Ely Gold shareholders based on the 30-day volume weighted average price of the Gold Royalty shares and Ely shares ending on June 18, 2021.

At closing, assuming maximum aggregate cash consideration of C$84 million, existing Gold Royalty and Ely Gold shareholders will own approximately 55% and 45%, respectively, of Gold Royalty after giving effect to the arrangement on a fully diluted, in-the-money, and fully-prorated basis.

According to a press-release, this transaction creates a new, sizable Americas-focused royalty company with a peer-leading resource endowment and a robust development pipeline, including nearly 100 royalties on various production, near-production, development and exploration assets.

Ely Gold Royalties is a Nevada focused gold royalty company. Its current portfolio includes royalties at Jerritt Canyon, Goldstrike and Marigold, three of Nevada's largest gold mines, as well as the Fenelon mine in Quebec, operated by Wallbridge Mining.

Gold Royalty is a gold-focused royalty company. 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.

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