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Elemental Royalties Corp
Symbol ELE
Shares Issued 78,266,221
Close 2022-04-11 C$ 1.52
Recent Sedar Documents

Elemental calls Gold Royalty bid valuation "misleading"

2022-04-12 10:17 ET - News Release

Mr. Frederick Bell reports

ELEMENTAL ROYALTIES WARNS SHAREHOLDERS REGARDING GOLD ROYALTY'S MISLEADING OVERSTATEMENT OF THE VALUE OF GOLD ROYALTY'S HOSTILE BID

Elemental Royalties Corp. is commenting on a misleading overstatement by Gold Royalty Corp. about the value of Gold Royalty's hostile takeover bid for Elemental and on Gold Royalty's unfounded criticism of Elemental's recently completed $14-million private placement financing.

Elemental reminds shareholders that the hostile bid involves a share exchange, not cash. Therefore, the value of the hostile bid is directly tied to Gold Royalty's share price performance, which has declined significantly since Gold Royalty's announcement of its intention to make the hostile bid. It is highly misleading for Gold Royalty to pretend otherwise, as it has attempted to do in a news release and letter to Elemental shareholders on March 30, 2022, and in Gold Royalty's notice of change and variation of its offer to purchase dated April 11, 2022 (collectively, the Gold Royalty documents).

The financing involved the issuance of Elemental shares at a price of $1.51 per share. This represented a premium of approximately 15 per cent to the value of the hostile bid, which was $1.31 based on the price of Gold Royalty shares at the close of trading on march 16, 2022, the last close prior to the announcement of the Financing.

On March 30, 2022, Gold Royalty falsely contended that the financing was at a price below the value of the hostile bid. This claim is supported only by Gold Royalty citing the inflated and illusory unaffected price under the hostile bid of $1.78 per Elemental share offered by Gold Royalty approximately three months earlier, when Gold Royalty announced its hostile bid intention on Dec. 20, 2021.

The unaffected price is not relevant to Elemental shareholders given material developments since then, including disclosure by both companies of acquisitions, operational and financial results, and 2022 guidance.

It appears that Gold Royalty is hoping Elemental shareholders will ignore the decline in the value and the market price of Gold Royalty's shares since Dec. 20, 2021. Gold Royalty does not disclose in the Gold Royalty documents the current implied price under the hostile bid, which is well below $1.78 per Elemental share. Accordingly, Elemental warns its shareholders to be aware of and carefully consider the deteriorated share price performance of Gold Royalty since the Hostile Bid, a risk factor identified by Elemental in its recommendation that Elemental shareholders reject Gold Royalty's hostile bid. That recommendation has not changed.

Board still believes the hostile bid undervalues Elemental

Elemental's board continues to believe that the hostile bid, which offers Elemental shareholders only 14 per cent of the combined company's equity at an implied price that is lower than the announced financing, significantly undervalues Elemental's business. The board continues to unanimously and unequivocally recommend that Elemental shareholders reject the hostile bid and not tender their shares.

The board's determination followed careful consideration, including advice from its financial and legal advisers and the recommendation of the special committee. Furthermore, as previously disclosed by the company, a majority of Elemental shareholders have communicated to the company that they do not intend to accept the hostile bid.

A directors' circular providing the full details of the board's recommendation, including the reasons to reject the hostile bid, is available on the company's website and SEDAR.

Elemental shareholders who have questions can contact Morrow Sodali, the information agent, at 1-888-777-2158.

Advisers

The company has engaged Canaccord Genuity Corp. as its sole financial adviser and Fasken Martineau DuMoulin LLP as legal adviser to the company and its board. Longview Communications and Public Affairs is engaged as communications adviser to the company. Morrow Sodali is acting as information agent and strategic adviser to Elemental.

About Elemental Royalties Corp.

Elemental is a gold-focused royalty company listed on the TSX Venture Exchange (TSX-V) in Canada and provides investors with lower risk precious metals exposure through a portfolio of nine high-quality royalties. This enables investors to benefit from continuing royalty revenue, future exploration upside and low operating costs. Elemental's experienced team seeks to secure royalties in advanced precious metals projects, run by established operators, from its pipeline of identified opportunities.

We seek Safe Harbor.

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