- Lithium Royalty (TSX:LIRC), a profitable royalty-focused mining stock, has made an all-cash offer to acquire TNR Gold (TSXV:TNR)
- The non-binding offer features a purchase price of $0.08 per TNR share, representing a 45 per cent premium to the closing share price on Thursday
- Lithium Royalty is a lithium-focused royalty company with a diversified portfolio of 32 revenue royalties on mineral properties around the world
- Lithium Royalty stock (TSX:LIRC) is unchanged trading at $11.40 per share
TNR Gold is a green energy metals royalty and gold company with a 27-year history generating high-quality global exploration projects. Its portfolio provides exposure to blue-sky discoveries with high-profile partnerships that have the potential to generate significant shareholder value.
Lithium Royalty’s non-binding offer features a purchase price of $0.08 per TNR share, representing a 45 per cent premium to TNR’s closing share price on Thursday.
Besides this attractive premium, Lithium Royalty believes the transaction is beneficial to TNR shareholders for the following reasons:
Immediate liquidity: The potential acquisition represents a liquidity event equivalent to 2,000 times TNR’s daily trading volume and 10 times the total cumulative volume traded over the past 12 months. Additionally, TNR stock is unchanged over the past three years.
Strategic rationale: In 2023, TNR saw no impact on shareholder value after partially monetizing its Mariana net smelter royalty, repaying all outstanding debt and launching a share buyback. In the absence of accretive avenues for growth, Lithium Royalty views its proposed transaction as a substantial opportunity.
Alignment: TNR management and insiders have been net sellers of TNR stock annually since 2021 at prices below $0.08. Management has also let options expire with exercise prices ranging from $0.05 to $0.075 and increased its compensation by 270 per cent YoY in the first half of 2023.
Lithium Royalty is a lithium-focused royalty company with a diversified portfolio of 32 revenue royalties on mineral properties around the world. The company posted net income of US$290,000 in 2020, US$10.72 million in 2021 and US$13.78 million in 2022.
Lithium Royalty stock (TSX:LIRC) is unchanged trading at $11.40 per share as of 9:36 am ET. The stock is down by 29.63 per cent over the past year.
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