Gold Royalty's Strategic Capital Raise and Pedra Branca Acquisition: Unlocking Long-Term Value in Emerging Markets

In a bold move to capitalize on the surging demand for critical minerals, Gold Royalty Corp. has executed a $70 million capital raise and secured a high-grade copper-gold royalty in Brazil's Carajás region. This acquisition of the Pedra Branca mine royalty, operated by BHP Group and situated in a jurisdiction renowned for world-class mineral deposits, underscores the company's commitment to diversifying its portfolio and positioning itself at the forefront of the global energy transition.

Strategic Capital Raise Fuels Expansion

Gold Royalty's $70 million capital raise, achieved through the issuance of 17.5 million common shares at $4.00 per share, was led by National Bank Capital Markets, BMO Capital Markets, and RBC Capital Markets. This funding directly supports the acquisition of a producing royalty on the Pedra Branca mine, a strategic asset that aligns with the company's thesis of leveraging non-operating, low-risk exposure to high-grade commodities. The transaction adds eight cash-flowing assets to Gold Royalty's portfolio, alongside a pipeline of over 250 royalty and streaming interests.

The royalty structure itself is compelling: a 25% net smelter return (NSR) on gold and a 2% NSR on copper, with the latter benefiting from robust long-term demand driven by decarbonization efforts. For the 12 months ending June 30, 2025, the royalty generated $7.9 million in payments, equivalent to 2,800 gold equivalent ounces at an average gold price of $2,811 per ounce. This immediate cash flow, combined with the mine's projected growth, positions Gold Royalty to enhance shareholder value through recurring, inflation-protected returns.

Pedra Branca: A High-Grade Asset in a Strategic Jurisdiction

Located 160 km from Marabá and 900 km from Belém in Brazil's Pará state, the Pedra Branca mine sits within the Carajás region-a global hub for iron ore and other critical minerals. BHP, which acquired the mine in 2023, has since expanded its operations, and the asset is now slated for sale to CoreX Holding BV, a multinational industrial conglomerate with a presence in 55 countries. This transition, expected to finalize under customary conditions, further validates the mine's strategic appeal.

Reserve data highlights the asset's quality: JORC-compliant resources include 2.4 million tonnes (Mt) at 1.68% copper and 0.47 g/t gold for measured resources, and 12 Mt at 1.41% copper and 0.40 g/t gold for indicated resources. Proven and probable reserves total 3.8 Mt at 1.82% copper and 0.48 g/t gold. These figures, coupled with the mine's proximity to established infrastructure, position it as a low-cost, high-margin producer-a critical factor in an era of rising input costs and regulatory scrutiny.

Diversification and Emerging Market Exposure

Gold Royalty's acquisition reflects a broader strategy to diversify its commodity exposure and geographic footprint. While gold remains a cornerstone of its portfolio, the inclusion of copper-a key enabler of renewable energy technologies-aligns with macroeconomic tailwinds. According to the International Energy Agency, global copper demand is projected to grow by 4% annually through 2040, driven by electric vehicle adoption, grid modernization, and green hydrogen projects.

Emerging markets like Brazil further amplify this thesis. The country's mining sector, though historically cyclical, benefits from its status as the world's largest producer of niobium and a top-ten producer of aluminum, bauxite, and iron ore. Pedra Branca's location in this jurisdiction offers Gold Royalty a unique opportunity to tap into Brazil's resource base while mitigating operational risks through a non-operating royalty structure.

Long-Term Value Creation and Portfolio Synergies

The acquisition also strengthens Gold Royalty's balance sheet and capital efficiency. By securing a royalty on a mine with $7.9 million in annualized cash flow, the company achieves leverage to both gold and copper prices without assuming operational or capital expenditures. This model, proven in the sector, allows for scalable growth while preserving flexibility to pursue additional accretive opportunities.

Moreover, the transition of Pedra Branca to CoreX Holding BV introduces a new operator with deep industrial expertise, potentially unlocking further value through optimized production and cost management. For Gold Royalty, this partnership reduces counterparty risk and ensures continuity in royalty payments, a critical consideration in volatile markets.

Conclusion

Gold Royalty's $70 million capital raise and Pedra Branca acquisition exemplify a disciplined, forward-looking approach to royalty investing. By securing a stake in a high-grade copper-gold asset within a top-tier jurisdiction, the company is not only diversifying its revenue streams but also aligning with the structural demand drivers of the 21st century. As emerging markets continue to play a pivotal role in global resource supply chains, Gold Royalty's strategic expansion positions it to deliver consistent, inflation-protected returns while navigating the complexities of a decarbonizing economy.