Elemental Royalty Corporation (NASDAQ: ELE) has announces the closing of the previously announced sale of its Nordic operational platform to Goldsky Resources Corp. (TSXV: GSKR). Goldsky, formerly known as First Nordic Metals Corp., is a longstanding partner and operator on multiple Elemental royalty properties in Sweden and Finland.
This strategic divestment includes Elemental’s regional infrastructure, exploration equipment, and employees across the Nordic countries. Importantly, the transaction does not include the transfer of any Elemental mineral properties, exploration permits/licenses, or Elemental’s existing royalty portfolio in the region.
Highlights
- Completion of the sale of Nordic operations to Goldsky
- Elemental to retain existing royalty portfolio, mineral properties and exploration permits in the region
- Elemental will receive a 1% NSR royalty on any projects generated by Goldsky over the next five years, thereby retaining exposure to discovery upside across the Nordic countries
Strategic Rationale and Long-Term Benefits
The completion of this transaction is part of Elemental’s broader initiative to streamline global operations while retaining royalty upside exposure to future exploration success. The Company has conducted generative exploration in the Nordic region for more than 15 years and throughout this period, has built a broad portfolio of royalties, all of which will remain in the Elemental portfolio. Additionally, as a key consideration for the sale, Elemental will receive a 1% net smelter return royalty on the proceeds from production on any newly generated projects in Sweden and Finland by Goldsky, or its affiliates, over the next five years, ensuring continued participation in the region’s exploration upside. This provides Elemental shareholders with additional exposure to discovery optionality in the Nordic countries at no additional cost to the Company.
Transaction Terms
As further consideration for the sale, Elemental will receive staged payments totalling 3,247,000 SEK (approximately US$360,000) over two years. Payments will be made as follows:
- 1,052,000 SEK (~US$117,000) has now been paid following TSX Venture Exchange approval, satisfied by the issuance of 20,138 shares of Goldsky (at a deemed price per Goldsky share of C$3.98) and a payment of C$80,215 in cash;
- 1,195,000 SEK (~US$132,000) will be paid (597,500 SEK to be paid in cash and 597,500 SEK to be satisfied through the issuance of Goldsky shares) on the first anniversary of closing; and
- 1,000,000 SEK (~US$111,000) will be paid (500,000 SEK to be paid in cash and 500,000 SEK to be satisfied through the issuance of Goldsky shares) on the second anniversary of closing.
The deemed issue price of the Goldsky shares issued pursuant to the Agreement shall be the greater of: (i) C$1.26; and (ii) the volume weighted average price of the Goldsky shares on the TSXV over the 10 consecutive trading days preceding their date of issue.
Elemental Royalty Corporation will retain a 1% NSR royalty on any new projects organically generated (i.e. newly staked) by Goldsky in Sweden and Finland within five years.
For purposes of the policies of the TSX Venture Exchange, at the time the Agreement was entered into, the transaction was a non-arm’s length transaction as a result of the parties (at the time Goldsky and EMX Royalty) having a director in common and was therefore subject to acceptance of the TSX-V, which has since been obtained. All shares issued in connection with the transaction will be subject to a statutory four month and one day hold, in accordance with applicable Canadian securities laws from their respective date of issue.
No finder’s fee has been paid in connection with the transaction.
