Franco-Nevada Corp. said Thursday it has agreed to buy metals royalty company Lumina Royalty Corp. for $60-million (U.S.) in common shares and $6-million worth of warrants.
The deal would see an exchange ratio of 0.03487 Franco-Nevada common shares and 0.01917 Franco-Nevada warrants for each Lumina Royalty share.
Lumina owns royalties on four development stage porphyry deposits in Chile and Argentina.
“These royalties provide exposure to very large resources in established mining countries and are expected to add to Franco-Nevada’s long-term growth profile,” president and CEO David Harquail said in a statement.
“The Relincho property is already in the development pipeline of Teck, a top-tier mine operator, and has the potential to be a long-life cornerstone royalty for Franco-Nevada.”
Lumina Royalty was spun off from Lumina Copper Corp. earlier this year.
The company’s board has recommended that its shareholders vote in favour of the deal. Holders of about 32.2 per cent of Lumina’s stock have already agreed to tender their shares to the bid, which requires approval by two-thirds of all shareholders and a majority of minority holders.
Franco-Nevada is a gold-focused royalty and stream company with additional interests in platinum group metals, oil and gas, and other assets.