Gold Royalty: FORM 51-102F3 MATERIAL CHANGE REPORT (Form 6-K)


FORM 51-102A3

MATERIAL CHANGE REPORT

1. Company name and address:

GOLD ROYALTY CORP.

1830-1030 West Georgia Street

Vancouver, British Columbia V6E 2Y3

2. Date of material change:

The material change described in this report occurred on September 6, 2021.

On September 7, 2021, Gold Royalty Corp. (the ‘Society‘) issued a press release through the facilities of Canada Newswire, a copy of which has been filed on the Electronic Document Analysis and Search System (SEDAR).

4. Summary of material change:

On September 6, 2021, the Company entered into arrangement agreements (collectively, the ‘The agreements‘) with each of Abitibi Royalties Inc. (‘Abitibi Royalties‘) and Golden Valley Mines and Royalties Ltd. (‘Golden valley‘), whereby, respectively, the Company has agreed to acquire all of the issued and outstanding common shares of each of Abitibi Royalties and Golden Valley by way of statutory plans of arrangement (collectively, the’Arrangements‘).

5. Full description of the material change:

On September 6, 2021, the Company entered into the agreements with Abitibi Royalties and Golden Valley with respect to the respective agreements. The transactions will be effected by means of a statutory plan of arrangement.

Pursuant to the Arrangement Agreement with Golden Valley (the “GZZ Arrangement Agreement‘), among other things, the Company would acquire all of the outstanding common shares of Golden Valley (the’GZZ shares‘) and in return, therefore, each holder of a GZZ Share, at the time of the entry into force of the Arrangement with Golden Valley (the’GZZ layout‘), will receive 2.1417 ordinary shares of the Company (the’GRC actions‘).

In addition, in accordance with the GZZ Arrangement, immediately prior to the acquisition of GZZ Shares by the Company described above, each outstanding option (whether vested or not) to purchase Golden Valley Shares (the “GZZ options‘) which is not exercised before the entry into force of the GZZ Arrangement will be acquired by Gold Royalty in exchange for an option or a right to purchase (a’Replacement option‘) a number of GRC shares equal to: (A) the number of GZZ shares that can be issued upon exercise of this GZZ option immediately before the effective time, multiplied by (B) the ratio of exchange (as defined in the GZZ arrangement agreement), rounded down to the next whole number of GRC shares, at an exercise price per GRC share equal to the quotient determined by dividing: (X) the exercise price per share GZZ to which this GZZ option could be exercised immediately before the Effective Time, by (Y) the exchange ratio, rounded to the nearest whole cent, as further described in the GZZ Arrangement Agreement.

Under the terms of the arrangement agreement with Abitibi Royalties (the “RZZ Arrangement Agreement‘), among other things, the Company would acquire all of the outstanding common shares of Abitibi Royalties (the’RZZ actions‘) and in return, consequently, each holder of an RZZ share, at the time of the entry into force of the arrangement with Abitibi Royalties (the’RZZ arrangement‘), will receive 4.6119 GRC Shares.

Golden Valley and Abitibi Royalties intend to call meetings of their respective shareholders to be held in October 2021 to obtain shareholder approval for the respective arrangements (the “Meetings‘). Completion of the arrangements will require: (i) the approval of at least 66 2/3% of the votes cast at each meeting, and (ii) the approval of a simple majority of the votes cast by the shareholders at each meeting, excluding the votes of certain management shareholders, as required by Multilateral Instrument 61-101 – Protection of holders of minority securities in special transactions.

The agreements include, among other things, non-solicitation covenants, with “fiduciary opt-out” provisions that allow Golden Valley or Abitibi Royalties, as the case may be, to consider and accept a superior proposal, subject to ‘a “pairing right period” in favor of the company. The agreements also provide for termination fees of C $ 10,000,000 and C $ 5,000,000 payable by Abitibi Royalties and Golden Valley, respectively, if the agreements are terminated in certain specified circumstances. The Company is also entitled to reimbursement of expenses of CA $ 1,500,000 and CA $ 1,000,000 payable by Abitibi Royalties and Golden Valley, respectively, if the applicable agreements are terminated in certain circumstances. Abitibi Royalties is entitled to reimbursement of expenses in the amount of CA $ 1,500,000 if the RZZ agreement is terminated in certain circumstances and Golden Valley is entitled to reimbursement of expenses in the amount of CA $ 1,000,000 if the RZZ agreement is terminated in certain circumstances. GZZ agreement is terminated under certain circumstances.

The directors, senior officers and certain shareholders of Abitibi Royalties and Golden Valley, holding in aggregate approximately 65.4% and 38.0%, respectively, of the issued and outstanding common shares of Abitibi Royalties (including Golden Valley ) and Golden Valley, have entered into voting agreements with Gold Royalty, pursuant to which they have agreed to vote their shares in favor of the respective arrangements at the applicable shareholders’ meeting. Of these shares, approximately 11.2% of the outstanding Abitibi Royalties shares and 31.4% of the outstanding Golden Valley shares are subject to a “hard” support agreement with blocked voting rights.

A copy of each of the Arrangement Agreements has been filed under the Company’s profile on SEDAR at www.sedar.com. The above summaries of each of the Arrangement Agreements are set out in their entirety by the full text of the applicable Arrangement Agreements.

Further information regarding the arrangements will be contained in management information circulars to be prepared by Abitibi Royalties and Golden Valley in connection with the Meetings and filed by each of them under their respective profiles on SEDAR at www.sedar.com.

The parties are working to complete the arrangement in the last quarter of 2021.

6. Recourse to subsection 7.1 (2) of Regulation 51-102

Not applicable.

Not applicable.

The following executive officer of the Company is aware of the material change and this report and can be contacted about the material change and this report:

David Garofalo

President, President and Chief Executive Officer

Telephone: (604) 396-3066

September 16, 2021

Some of the information contained in this document constitutes “forward-looking information” and “forward-looking statements” within the meaning of applicable securities laws in Canada and the United States (“”forward-looking statements‘) and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performances and achievements of the Company to differ materially from the results, performances or achievements expressed or implied therein. These forward-looking statements, including, but not limited to, statements relating to: the proposed transactions and arrangements; the ability of the parties to meet the closing conditions of the respective Arrangements; and the timing, benefits and anticipated effects of completing the arrangements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, obtaining required approvals from shareholders, courts and regulators; exercising any right to terminate under the agreements; any failure to meet other terms of the arrangement agreements; and any inability of the parties to realize the benefits of the proposed transaction. Although the Company has attempted to identify important factors which could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or planned. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Therefore, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements except in accordance with applicable securities laws.

Disclaimer

Gold Royalty Corp. published this content on September 17, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on September 17, 2021 10:11:07 AM UTC.

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