Summit going public in Eagle Royalties takeover

Summit Royalty, a precious metals-focused royalty and streaming company, plans to list on the stock market via a reverse takeover (RTO) of Canadian junior royalty firm Eagle Royalties (CNSX: ER; US-OTC: ERYTF).

The companies inked the amalgamation agreement on June 30 to create a new royalty and streaming entity with assets across North and South America and Africa. The combined portfolio will include over 40 royalty interests, with Eagle contributing critical metals, gold and industrial mineral royalties in Western Canada.

Eagle, which had a Canadian market capitalization of $5.6 million before the deal, owns as its main asset a royalty on Banyan Gold’s (TSXV: BYN; US-OTC: BYAGF) AurMac project in Yukon. It holds a 0.5%-to-2% net smelter return (NSR) on key deposits. Summit shareholders will own 80% of the new company when it’s listed and the deal value becomes clearer with the number of shares offered. 

Summit president and director Drew Clark said Eagle’s portfolio, particularly its stake in AurMac and more than 35 other Canadian royalty interests, offers strong optionality that complements Summit’s cash-flowing assets.

“We look forward to partnering with Eagle shareholders as we work to aggressively grow the business following the RTO,” Clark said in a release.

Iamgold assets

Summit Royalty’s portfolio includes a mix of cash-flowing and development-stage assets acquired in June from Iamgold (TSX: IMG; NYSE: IAG) for US17.5 million ($23.7 million). The company holds a 50% silver stream on the Bomboré mine in Burkina Faso, which includes a minimum annual delivery of 37,500 oz. of silver, with payment obligations accruing if the threshold is not met.

It also owns an US$80-per-oz. production royalty on the first 250,000 oz. of gold sold from the Pitangui project in Brazil, followed by a 1.5% NSR royalty on subsequent production. Other assets include a 0.5% NSR royalty on the Zancudo project in Colombia and a 3% NSR royalty on the Lavras do Sul gold project in Brazil. These holdings provide Summit with near-term revenue and exposure to a pipeline of growth-stage projects in the Americas and West Africa.

Under the deal, Eagle will acquire Summit via a three-cornered amalgamation involving a newly formed subsidiary, Eagle Subco. Summit shareholders will receive five shares of the resulting public company for each Summit share held. 

Following the transaction, and subject to shareholder and regulatory approvals, Eagle will be renamed Summit Royalty Corp., or a similar name proposed by Summit. The company will also change its stock exchange ticker symbol, with listing planned on either the CSE or the TSX Venture Exchange, depending on the outcome of discussions with the target exchange.