Increased Net Smelter Return (“NSR”) Royalties: The existing 2.50% NSR royalties on Monarch’s McKenzie Break, Croinor Gold, and Swanson properties will be increased to a 2.75% NSR over the properties.
Buyback Elimination: Monarch’s existing 1.25% NSR royalty buyback rights on the McKenzie Break, Croinor Gold, and Swanson properties will be extinguished.
Pre-emptive Rights: Gold Royalty will retain pre-emptive rights on any future PTR’s on the Beacon Mill and will retain a right of first refusal (“ROFR”) on the creation of any additional NSR properties over the McKenzie Break, Croinor Gold, and Swanson properties.
David Garofalo, Chairman and CEO of Gold Royalty stated: “We are excited to continue to support the team at Monarch as they work towards restarting production at Beaufor and the Beacon Mill. This acquisition further bolsters Gold Royalty’s potential near-term cash flow with Monarch announcing that it expects to recommence production in June 2022. The buyback elimination and expanded NSR royalties to 2.75% over McKenzie Break, Croinor, and Swanson respectively, increase our exposure to high-potential exploration assets in tier-one jurisdictions, strengthening our already impressive long-term growth portfolio.”
The royalty properties are located near strategic infrastructure in the Abitibi region of Quebec, Canada and include:
Beaufor Property / Beacon Mill – The Beaufor mine and Beacon mill are located approximately 20 kilometres east of Val-d’Or, Quebec and have historically produced 1.1 million ounces of gold at an average grade of 7.50 g/t gold. In June 2021, Monarch announced that it plans to restart the Beaufor Mine and the Beacon Mill by June 2022. The Beacon mill is a 750 tonne per day facility that is fully permitted to process up to 1.8 million tonnes of tailings. Monarch announced exploration plans of an expected 25,000m drilling in 2022.
McKenzie Break – The McKenzie Break property is an advanced exploration property located approximately 35 kilometres northeast of Val-d’Or, Quebec. The property consists of a 70 km2 land package. Monarch announced exploration plans of an expected 20,000m drilling in 2022.
Croinor Property – The Croinor Property is a fully permitted past producing property located 55 kilometres east of Val-d’Or, Quebec. The project consists of a district-size land package of over 150 km2. The property is the subject of a January 2018 prefeasibility study. Monarch announced exploration plans of an expected 3,000m drilling in 2022.
Swanson Property – The Swanson Property is an earlier stage exploration property located approximately 12 kilometres northeast of Barraute, Quebec, covering 52.26 km2. Monarch announced exploration plans of an expected 10,000m drilling in 2022.