Evolve Royalties set to pay US$6.2 million for royalty portfolio

Evolve Royalties Ltd. [EVR-CSE, EVRYF-OTCQX] said it has struck a binding deal to acquire a portfolio of seven royalties, including copper royalties on portions of Osisko Metals Inc.’s [OM-TSX, OMZNF-OTC] Gaspe and Red Brook copper properties.

Under the terms of binding agreements with certain private royalty holders, Evolve has agreed to pay US$6.2 million in a combination of cash and common shares for those assets. The asset package includes a 1.5% net smelter return royalty on the Porphyry Mountain sector of the Gaspe Copper Project in Murdochville, Quebec, providing exposure to a large-scale copper project that is being advanced by Osisko Metals.

It also includes a 2.0% NSR royalty on the Red Brook copper property located near Bathurst, New Brunswick. Osisko Metals recently optioned the Red Brook property from Vision Lithium Inc. [VLI-TSXV, ABEPF-OTCQB] and has proposed spinning it out into a new company, Osisko Metals, which has recently announced an offering of special warrants of up to $250 million to advance its projects. The spin out is subject to Osisko Metals’ shareholder approval. Half of the Red Brook royalty (1.0%) may be repurchased by the operator for $1.0 million.

Evolve is also picking up five more royalty interests in Quebec and New Brunswick, including the Grande Vallee royalty in the Gaspe region and the right to be granted a royalty on the Prud’homme property located in the Nunavik region of northern Quebec.

Evolve Royalties shares were unchanged at $2.68 in early trading Monday. The shares trade in a 52-week range of $3.95 and 10 cents.

Evolve is a copper-focused royalty company. Its aim is to build a diversified portfolio of long-life cash-flowing royalties while maintaining exposure to long-term commodity upside.

“These royalties give Evolve a direct interest in the Gaspe copper district, one of Canada’s most promising copper districts,’’ said Evolve President and CEO Joseph de la Plante. “The Porphyry Mountain royalty is particularly well aligned with our focus on copper and offers significant exploration upside as Osisko Metals advances the Gaspe Copper Project,’’ he said. “Together with Red Brook and our broader royalty portfolio, these assets strengthen Evolve’s Canadian footprint and position us to benefit from continued exploration success and long-term project development.’’

In its press release, the company said half of the Porphyry Mountain royalty (0.75%) may be repurchased by the operator for $1.5 million. The Gaspe Copper royalty covers the DPEX target area (Porphyry Mountain) as well as areas south of the current mineral footprint, where additional drilling is being planned to follow up on previously unknown porphyry mineralization.

Under the agreements, Evolve is acquiring the right to be granted a 2.0% gross metal royalty on the Prud’homme copper-zinc-gold-silver property. The Prud’homme project was optioned by its current owner to a third party. The royalty will be granted once the optionee satisfies its option to earn a 100% interest in the property.