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• Sailfish Royalty announced the sale of its Spring Valley and Moonlight royalties for $168M in after-tax cash, representing ~5.4x its 2019 purchase price and an implied IRR of ~29%.
• The after-tax proceeds leave the Company with $171M in cash pre-debt repayment, shifting the thesis from development-stage NAV leverage to capital allocation and yield.
• Sailfish also tripled its annual dividend to $0.15/share (5.1% yield), which we expect to be covered by Mt. Hamilton and existing stream cashflows.
This morning, Sailfish Royalty (FISH:TSXV, SROYF:OTC) announced that it has entered into a definitive agreement to sell its Spring Valley and Moonlight royalties to OR Royalties Inc. for after-tax cash consideration of $168M. The assets are held through Terraco Gold Corp., a wholly owned subsidiary, and include up to a 3% NSR on the Spring Valley Gold Project in Nevada and a 2% NSR on the Moonlight property. The transaction represents ~5.4x Sailfish’s original purchase price in 2019 and implies an IRR of ~29%. Concurrently, the Company announced that it will triple its annual dividend to $0.15/share from $0.05/share. We are maintaining our BUY rating and lowering our target price to C$4.50/share (previously C$5.25/share) on FISH.
The Company has already received the requisite shareholder approval by way of written consent of certain shareholders. Sailfish expects to redeploy this capital in high-returning investments in the mining industry, with a particular focus on precious metals streams and royalties, which we have strong conviction in given the management team’s track record of success and network. Additionally, FISH is tripling its annual dividend to $0.15/share ($0.0375/share quarterly), which will be covered materially by FISH’s remaining portfolio.
FISH: Announces the Sale of Spring Valley Royalty Package
What you need to know:• Sailfish Royalty announced the sale of its Spring Valley and Moonlight royalties for $168M in after-tax cash, representing ~5.4x its 2019 purchase price and an implied IRR of ~29%.
• The after-tax proceeds leave the Company with $171M in cash pre-debt repayment, shifting the thesis from development-stage NAV leverage to capital allocation and yield.
• Sailfish also tripled its annual dividend to $0.15/share (5.1% yield), which we expect to be covered by Mt. Hamilton and existing stream cashflows.
This morning, Sailfish Royalty (FISH:TSXV, SROYF:OTC) announced that it has entered into a definitive agreement to sell its Spring Valley and Moonlight royalties to OR Royalties Inc. for after-tax cash consideration of $168M. The assets are held through Terraco Gold Corp., a wholly owned subsidiary, and include up to a 3% NSR on the Spring Valley Gold Project in Nevada and a 2% NSR on the Moonlight property. The transaction represents ~5.4x Sailfish’s original purchase price in 2019 and implies an IRR of ~29%. Concurrently, the Company announced that it will triple its annual dividend to $0.15/share from $0.05/share. We are maintaining our BUY rating and lowering our target price to C$4.50/share (previously C$5.25/share) on FISH.
The Company has already received the requisite shareholder approval by way of written consent of certain shareholders. Sailfish expects to redeploy this capital in high-returning investments in the mining industry, with a particular focus on precious metals streams and royalties, which we have strong conviction in given the management team’s track record of success and network. Additionally, FISH is tripling its annual dividend to $0.15/share ($0.0375/share quarterly), which will be covered materially by FISH’s remaining portfolio.
Underlying
Sailfish Royalty Corp.
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Atrium Research Corporation
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Ben Pirie
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