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Abitibi Royalties & Golden Valley Mines and Royalties Announce Filing and Sending of Meeting Materials for Proposed Plans of Arrangement

08.10.2021  |  Newsfile
Val-d'Or, Oct 8, 2021 - Abitibi Royalties Inc. (TSXV: RZZ) (OTCQX: ATBYF) ("Abitibi Royalties") and Golden Valley Mines and Royalties Ltd. (TSXV: GZZ) (OTCQX: GLVMF) ("Golden Valley" and together with Abitibi Royalties, the "Companies") are pleased to announce that they have each publicly filed and commenced the sending of their respective management information circulars (the "Circulars") and related materials for their special meetings (the "Meetings") to be held on October 29, 2021 to approve the previously announced plans of arrangement (the "Arrangements").

Pursuant to the Arrangements, among other things, Gold Royalty Corp. ("Gold Royalty") (NYSE American: GROY) will acquire:
  • all of the outstanding common shares of Abitibi Royalties (the "Abitibi Shares") in exchange for 4.6119 common shares of Gold Royalty (the "Gold Royalty Shares") for each Abitibi Share; and

  • all of the outstanding common shares of Golden Valley (the "Golden Valley Shares") in exchange for 2.1417 Gold Royalty Shares for each Golden Valley Share.

The Companies are also pleased to announce that they have each obtained interim orders of the British Columbia Supreme Court, which provide for, among other things, the holding of the Meetings under applicable corporate legislation.

The Arrangements are subject to customary conditions applicable to such transactions, including receipt of requisite court, shareholder and stock exchange approvals. Each Arrangement is also conditional on completion of the other Arrangement. If all necessary approvals are obtained and the conditions to each Arrangement are met or waived, it is currently anticipated that the Arrangements will be completed in November 2021.

Benefits of the Arrangements

The anticipated benefits of the Arrangements to the Companies' respective shareholders, include, among other things:
  • Significant Premium. The share exchange ratio represents significant premiums of 22% and 86% to Abitibi Royalties and Golden Valley shareholders, respectively, based on the 20-day volume-weighted average price of each party's shares as of September 3, 2021, being the last trading date prior to the announcement of the Arrangements.

  • Creation of a Leading Growth and Americas-Focused Precious Metals Royalty Company. The transaction creates a new, sizable Americas-focused royalty company. The combined company is expected to have over 190 royalties across the production, development and exploration stages in various jurisdictions in the Americas.

  • Ability to Participate in Future Potential Growth of the Combined Entity. By receiving Gold Royalty Shares under the Arrangements, Abitibi Royalties and Golden Valley shareholders will have meaningful ownership in a leading growth and Americas-focused precious metals royalty company with continued exposure to the royalty portfolio of the combined company through ownership of Gold Royalty Shares. Abitibi Royalties and Golden Valley shareholders will each also have increased exposure to royalties that are in production, currently under development, in the feasibility or preliminary economic assessment stage and on numerous key exploration projects. Additionally, given the increased scale and diversification, it is expected that Gold Royalty will be positioned for a re-rate by attracting enhanced multiples that are generally applicable to larger companies.

  • Enhanced Balance Sheet and Access to Capital. The combined company will have approximately US$52.9 million in cash and cash equivalents, restricted cash and marketable securities and no debt (pro forma as of June 30, 2021), greater access to equity and debt capital markets and the critical mass to drive significant growth through acquisitions.

  • Expanded Québec Presence and Increased Diversification. The combined company will have an expanded presence in Québec through Gold Royalty's royalties on properties managed by Monarch Mining Corporation and Wallbridge Mining Company Limited. In addition, the transaction presents the opportunity for Abitibi Royalties and Golden Valley shareholders to participate in a royalty portfolio that includes royalties in Nevada and other jurisdictions of the Americas.

  • Increased Liquidity and Simplification of Ownership. The Gold Royalty Shares are listed on the NYSE American which is expected to enhance the market visibility and exposure of the combined companies. The transactions will also simplify the ownership structure of Abitibi Royalties and Golden Valley by eliminating the overhang from the existing ownership structure.

The directors, senior officers and certain shareholders of the Companies, holding in the aggregate approximately 65.4% and 38.0%, respectively, of the issued and outstanding common shares of each of Abitibi Royalties (including Golden Valley) and Golden Valley, have entered into voting support agreements with Gold Royalty dated September 6, 2021, pursuant to which they have agreed to vote their shares in favour of the respective Arrangements at the applicable Meetings and against any resolution or transaction that would prevent or delay the completion of such Arrangement. Of such shares, approximately 31.4% and 11.2% of the outstanding shares of Abitibi Royalties and Golden Valley, respectively, are subject to "hard" lock-up support and voting agreements, pursuant to which the obligations of the shareholder continue for a period of 6 months from the date thereof and do not terminate in the event the underlying arrangement agreement is terminated in accordance with its terms.

Recommendation of the Boards of Directors

The boards of directors of each of Abitibi Royalties and Golden Valley, each on the unanimous recommendation of a special committee comprised of its independent directors, unanimously recommend that shareholders vote FOR the applicable Arrangement.

Meeting Materials

Shareholders of each of the Companies should refer to the applicable Circular and related materials for detailed instructions on how to vote and participate at the Meeting. The Circulars also contain important information regarding the Arrangements and underlying agreements. The Circulars and related materials are available on each respective Company's profile at Each of the Companies urges shareholders to review such materials prior to voting at the Meetings.

The Meetings

The Golden Valley Meeting is scheduled for 12:00 p.m. (Eastern time) on October 29, 2021 and the Abitibi Royalties Meeting is scheduled for 1:00 p.m. (Eastern time) on October 29, 2021. The Meetings will each be held at 2864, chemin Sullivan, Val-d'Or, Québec, and will also be held by telephone conference call. Given the continuing impact of the COVID-19 pandemic, considerations regarding the health and safety of employees and stakeholders as well as public health guidelines to limit gatherings of people, shareholders are encouraged to attend the Meetings by telephone conference. Shareholders who wish to attend the meetings must follow the instructions set out in the respective Circulars.

Your Vote is Important

Whether or not you plan to attend the applicable Meeting, the Companies each encourage their respective shareholders to vote promptly. Please complete the form of proxy or voting instruction form enclosed with the Circulars and return it to the Companies' transfer agent, Odyssey Trust Company, as soon as possible, and in any event no later than: (i) 12:00 p.m. (Eastern time) on October 27, 2021, in the case of the Golden Valley Meeting; and (ii) 1:00 p.m. (Eastern time) on October 27, 2021, in the case of the Abitibi Royalties Meeting.

Registered shareholders can vote at the respective Meetings prior to such deadlines by returning their completed form of proxy by mail to Suite 350, 409 Granville Street, Vancouver, British Columbia V6C 1T2, Attention: Proxy Department; or by facsimile: 1-800-517-4553; or by voting through the Internet following the instructions on the form of proxy.

Non-registered shareholders, being shareholders whose shares are not registered in their own name should follow the instructions set forth in the voting instruction form sent to them by their broker or other financial institution in order to vote their shares at the applicable Meeting.

If you have any questions regarding the submission of your proxy, please contact Odyssey Trust Company, at its North American toll-free number: 1-888-290-1175.

About Abitibi Royalties Inc.

Abitibi Royalties Inc. owns various royalties at the Canadian Malartic Mine near Val-d'Or, Québec. In addition, Abitibi Royalties is building a portfolio of royalties on early-stage properties near producing mines and generating mineral projects for option or sale.

About Golden Valley Mines and Royalties Ltd.

Golden Valley Mines and Royalties Ltd. is focused on project and royalty generation and continues to evaluate opportunities to enhance its mining exploration property portfolio. Golden Valley is able to grow its current assets by way of partner-funded option/joint ventures and through its shareholdings in related-entities.

For additional information, please contact:

Abitibi Royalties Inc.
Ian Ball, President & CEO
Tel.: 1-888-392-3857

Golden Valley Mines and Royalties Ltd.
Glenn Mullan, President & CEO
Tel.: 1-819-824-2808 ext.204

Cautionary Statement on Forward-Looking Information:

Certain of the information contained in this news release constitutes 'forward-looking information' and 'forward-looking statements' within the meaning of applicable Canadian and U.S. securities laws ("forward-looking statements") and involve known and unknown risks, uncertainties and other factors that may cause each of the Companies' and/or Gold Royalty's actual results, performance and achievements to be materially different from the results, performance or achievements expressed or implied therein. Such forward-looking statements, including but not limited to statements relating to the proposed Arrangements; the conditions to closing of each of the Arrangements; and the anticipated timing thereof; and the anticipated timing, benefits and effects of the completion of the Arrangements, involve risks, uncertainties and other factors which may cause the actual results to be materially different from those expressed or implied by such forward-looking statements. Such factors include, among others, obtaining required shareholder, stock exchange and regulatory approvals, exercise of any termination rights under the underlying arrangement agreements, any inability to satisfy the other conditions therein, material adverse effects on the business, properties and assets of the Companies; and any inability of the parties to realize the benefits of the proposed transactions. Although the Companies have each attempted to identify important factors that 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 intended. 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. Accordingly, readers should not place undue reliance on forward-looking statements. Neither of the Companies undertakes to update any forward-looking statements, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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