Equinox Gold (TSX: EQX) is evidently looking to further monetize its assets, alongside that of Sandstorm Gold (TSX: SSL). The duo this morning announced that they would jointly launch Sandbox Royalties, a new royalty company that is presently referred to as Rosedale Resources.
The arrangement will see the two producers sell a portfolio of royalties to the new corporation. Equinox Gold is set to sell a number of royalties in exchange for $28.4 million in common shares of Rosedale, while Sandstorm is to sell $65 million worth of royalties to the new firm. Sandstorms portion will consist of $32.1 million in common shares, and $32.9 million via a promissory note that is convertible into common shares.
“Equinox Gold has surfaced tremendous value as a significant and supportive shareholder of Solaris Resources and i-80 Gold, our previous spin-out companies, and intends to continue that track record with Sandbox Royalties,” said Equinox CEO Christian Milau.
Collectively, Rosedale is to hold a total of 23 royalty assets, of which nine are to come from Sandstorm, and four are to come from Equinox, with one asset, Cuiu Cuiu, to overlap between the two firms. Rosedale’s current portfolio will make up the remainder of the royalty assets.
Upon the closing of the asset acquisition, Rosedale will look to go public via a Canadian exchange and conduct a non-brokered private placement at a price of $0.70 per share, for proceeds of at least $5.0 million. Pre-financing, Equinox will own a 30% stake in the firm.
Greg Smith, current president of Equinox Gold, will transition to the role of CEO of Sandstorm, while Marcel de Groot will serve as Chair of the board.
Equinox Gold last traded at $7.58 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
