More consolidation is coming to the royalty segment of the mining sector. Last night, Elemental Altus Royalties (TSXV: ELE) announced that they would be acquiring EMX Royalty Corp (TSXV: EMX) in a bit to establish a mid-tier gold-focused royalty company.
As part of the transaction, Tether Investments, the group behind the Tether stablecoin, will be making a US$100 million investment in the resulting company. Those funds are expected to be used to pay down certain debts currently held by EMX.
The merger of the two royalty names will result in an entity with 16 producing royalties within a larger portfolio of 200 royalties. Pro-forma revenue is expected to be US$80 million in 2026, 67% of which is derived from precious metals, with that portfolio said to build a foundation for immediate cash flow as well as long term upside.
“Tether’s recent investment in Elemental Altus was based on its strategy of increasing gold exposure. We believed Elemental Altus was the ideal vehicle to execute on this strategy due to the company’s strong foundation of assets and disciplined approach to investments. We are even more excited about the Merged Company’s future following the combination with EMX, creating a platform for growth that is unmatched in the junior royalty space and allowing us to accelerate into the mid-tier royalty space,” commented Elemental Altus Executive Chairman and Head of Business Initiatives at Tether Juan Sartori.
Under the terms of the arrangement, EMX Royalty shareholders are set to receive 0.2822 shares of Elemental Altus for each share of EMX held, which assumes that Elemental Altus will have completed a ten to one reverse split. Should that consolidation not occur prior to close, EMX shareholders will receive 2.822 shares of Elemental for each share of EMX held, equating to consideration of $5.79 per share, or a 9.9% premium.
On a post merger basis, the resulting company is expected to have an implied market capitalization of US$933 million, with EMX shareholders owning 49% of the resulting company. The company is expected to continue as Elemental Royalty Corp, with David Cole taking on the role of CEO and Frederick Bell moving to the role of President and COO. Juan Sartori will remain as Executive Chairman.
The transaction remains subject to shareholder approval by EMX shareholders, as well as approval of the Tether investment by Elemental Altus shareholders, and the standard regulatory and court approvals. A $15.8 million termination fee is also in play.
The transaction is currently expected to close in Q4 2025.
Elemental Altus last traded at $2.05 on the TSX Venture.
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