Versamet Royalties (TSX: VMET) has entered into a definitive agreement to acquire a 3.52% gold stream on the Eskay Creek gold-silver project in British Columbia. The transaction, valued at $360 million, sees Versamet acquiring the interest from entities managed by Orion Resource Partners LP and affiliates of Blackstone Inc.
The deal consists of $340 million in cash and $20 million in Versamet common shares. To fund the cash component, the company has arranged an amended $400 million credit facility with the Bank of Montreal and National Bank of Canada. This includes a $250 million revolving facility and a new $150 million term loan.
Eskay Creek, operated by Skeena Resources (TSX: SKE), is a past-producing mine currently under reconstruction. As of late February, the project was 49% complete, with first production targeted for the second quarter of 2027. The mine is expected to produce an average of 455,000 ounces of gold annually during its first five years of operation.
Under the terms of the stream, Versamet will receive 3.52% of payable gold production for the life of the mine. In exchange, the company will make ongoing delivery payments equal to 10% of the prevailing spot gold price. The stream is uncapped and contains no step-down provisions, providing Versamet full exposure to potential mine life extensions or future discoveries.
Provisions are also in place under the terms of the stream that will see the stream percentage increase should completion tests not be completed by September 30, 2027.
The acquisition is a significant shift in scale for Versamet, which expects its attributable production to exceed 30,000 gold equivalent ounces annually once Eskay Creek reaches full capacity. The move also increases the company’s portfolio concentration in Canada to approximately 50% by 2028.
Closing is expected in the first half of April 2026, subject to customary conditions and the successful closing of a $750 million senior secured notes offering by Skeena Resources. Once finalized, the deal will leave Versamet with seven producing royalties and streams, with three additional assets scheduled to come online by the end of 2027.
Versamet Royalties last traded at $13.86 on the TSX.
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