Key points:
- SolGold agrees on a deal for a $50m investment from Osisko Gold Royalties
- Osisko will receive a 0.6% NSR interest
- SolGold shares are up over 8% Monday
Shares of SolGold (LON: SOLG) are up more than 8% Monday morning after the company said it has agreed on a deal with Osisko Gold Royalties Ltd for a $50 million royalty financing concerning the company's Cascabel copper-gold project in northern Ecuador.
As part of the deal, Osisko will receive a 0.6% net smelter returns (NSR) interest from SolGold, calculated regarding net smelter returns from the Cascabel licence area.
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“This financing shows the intent going forward of SolGold becoming a nimble and agile organisation that can procure attractive financing even in a turbulent macro environment,” commented recently appointed SolGold Director Dan Vujcic.
Brisbane, Australia-based SolGold said it has a buy-back option, exercisable at its election for four years from the close of the deal for one-third of the NSR interest.
“The Osisko group is recognized as one of the most successful mining teams in the world. This funding immediately removes the financing overhang that has encumbered SolGold and provides an accretive and attractive financing solution,” commented Liam Twigger, Chairperson of SolGold. “SolGold can now devote its complete attention to the Strategic Review Process which is currently underway to maximize shareholder value.”
Despite Monday's gain, SolGold shares are down over 36% in 2022, although it has climbed more than 11% in the last week of trading.