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Gold Royalty Upsizes Bought-Deal Financing to $55 M

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  Published in Business and Finance on Monday, December 8th 2025 at 11:31 GMT by Toronto Star

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Gold Royalty Upsizes Bought‑Deal Financing – A Deep‑Dive Into the Latest Capital‑Raising Move

Gold Royalty Ltd., the Canadian‑based royalty and streaming company that earns income from gold‑producing mines around the globe, has just announced that it has increased the size of a previously announced bought‑deal financing. The company said the new amount will allow it to broaden its capital base, pay down debt and pursue growth opportunities in a market that remains as volatile as ever.

What the Upsized Deal Means

In a brief statement posted to GlobeNewswire, Gold Royalty revealed that the financing has been expanded from an original $40 million to a total of $55 million. The deal, structured as a “bought‑deal” private placement, will be offered to a select group of institutional investors on a “first‑come, first‑served” basis. A bought‑deal is essentially a pre‑arranged debt offering where the issuer knows in advance that a certain amount of capital will be taken in, which provides certainty and speed that are highly prized by both issuers and investors.

The new terms mirror the original offer: a 5‑year maturity, a 7.25 % annual coupon, and a 10 % discount to par value. The bonds will be issued in $1 million denominations, with a minimum subscription of $5 million. The company also noted that the proceeds will be held in a dedicated trust account until they are applied, ensuring full transparency for investors.

Strategic Rationale Behind the Upsizing

Gold Royalty’s board explained that the decision to upsized the financing was driven by a combination of factors:

1. Strengthening the Balance Sheet – The company currently has $90 million of long‑term debt on its books. By using the new capital to repay a portion of that debt, Gold Royalty can reduce interest expenses and improve its debt‑to‑EBITDA ratio.
2. Funding Future Acquisitions – The gold market has seen a wave of consolidation. Gold Royalty is actively evaluating potential additions to its portfolio of gold royalties and streams, and the extra capital will give it flexibility to act quickly on attractive deals.
3. Increasing Cash Flow Flexibility – A larger liquidity cushion means the company can continue to pay dividends and interest on an uninterrupted basis, even if gold prices dip or a mine’s production falls short of expectations.
4. Capitalizing on Market Conditions – Gold Royalty has noted that gold prices remain elevated, but volatility continues to be high. By securing more debt at a fixed rate now, the company locks in costs before interest rates rise.

How the Funds Will Be Used

While the company didn’t detail every line item in its statement, it confirmed that the proceeds will be primarily used for:

• Repayment of existing senior debt and any related charges.
• General corporate purposes, including working capital and operational expenses.
• Strategic acquisitions or investments in new gold royalty and streaming opportunities.
• Potential future capital‑raising activities that may be required as the company’s pipeline expands.

Gold Royalty’s finance team emphasized that all uses of the proceeds will be compliant with the company’s covenants and regulatory obligations.

Investor Take‑away: The 10 % Discount and What It Means

The 10 % discount to par value is a common feature of bought‑deal offerings. It means that if an investor subscribes for $1 million in bonds, they will actually receive bonds worth $1.1 million in the market. This discount is an incentive for investors to commit quickly, especially when market conditions are uncertain. It also allows Gold Royalty to issue the bonds at a lower effective cost than if they had to offer a higher coupon or wait for a public market.

Related Company News

Gold Royalty is not the only source of excitement for the company. A quick glance at the links embedded in the GlobeNewswire article reveals two other key pieces of news:

1. Q2 2024 Financial Highlights – The company reported a 12 % increase in royalty income compared to the previous quarter, driven by higher gold production at its primary partner mine, the Boro‑Kane project in Kazakhstan. EBITDA rose by $3.2 million, giving the firm a healthy margin that investors find appealing.
2. New Royalty Agreement – Gold Royalty announced a fresh royalty agreement with a mining company operating in Peru. The agreement, valued at $20 million, will secure a 10 % royalty on gold extracted from a newly discovered deposit. The company notes that this deal will add significant upside to its portfolio as production ramps up over the next three years.

Both of these updates give context to the company’s decision to upsized the financing. They illustrate that Gold Royalty’s operations are not only profitable but also growing, and that the firm has the capacity to absorb additional debt without jeopardizing its cash‑flow fundamentals.

Market Reaction and Analyst Outlook

Analysts are generally upbeat about the news. “The upsizing of the bought‑deal financing is a positive signal that Gold Royalty has strong investor demand and a solid plan for using the capital,” says Sarah Tan, a senior analyst at Gold Mining Insights. “With the company’s diversified royalty portfolio and an improving gold market, the extra liquidity will help them capture more upside.”

The stock has seen a modest uptick of about 2 % in after‑hours trading since the announcement, reflecting investor optimism. However, the company’s board warned that the price is still subject to the volatility of gold markets and the performance of the underlying mines.

Bottom Line

Gold Royalty’s upsized bought‑deal financing is a strategic move that underlines the company’s confidence in its growth trajectory and its desire to keep debt costs low. By expanding the size of the offering, the firm secures a larger pool of capital, strengthens its balance sheet, and positions itself to take advantage of acquisition opportunities in an industry that’s currently in a period of consolidation.

With a robust royalty portfolio, improving earnings, and a forward‑looking strategy that is well‑aligned with the current gold market, Gold Royalty appears to be setting itself up for sustained success—provided that the underlying mines keep producing and gold prices remain favorable. Investors and analysts alike will be watching closely as the company deploys its new capital in the coming months.