GROY - Gold Royalty Acquiring Elemental: A Generous Premium

• Gold Royalty Corporation has announced its intent to acquire Elemental Royalties at a 37% premium, valuing the company at ~$104 million.
• This premium implies a price paid for Elemental of roughly ~1.40x P/NAV, a massive premium to where other junior royalty companies are trading, and to where deals are being completed.
• While this deal pushes Gold Royalty to the 200 royalty mark, it doesn't add much breadth to the portfolio, with Elemental having a relatively small development pipeline.
• Based on another acquisition completed at very generous terms with shares, I continue to see several better ways to play the sector than with Gold Royalty Corporation.

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