TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) has commented on Lithium Royalty Corp (TSX:LIRC)'s (LRC) unsolicited and non-binding offer to acquire the issued and outstanding common shares of TNR Gold for $0.08 per share in cash, calling it an opportunistic, "low-ball" offer that is financially inadequate and not in the best interests of TNR or its shareholders given it is such a small premium to the company’s closing stock price of $0.0725 on September 29, 2023.
The green energy metals royalty and gold company said it believes the current TNR Gold management can deliver a lot more value for its shareholders.
"Given that LRC valued only a portion of the company at US$9 million, based on its purchase in February 2023 of the 0.5% NSR (net smelter return) royalty involving the Mariana Lithium project in Argentina for US$9 million, the offer of C$15 million (approximately US$11 million) for the entire company is considered opportunistic and inadequate," TNR Gold CEO Kirill Klip said in a statement.
"We are engaging with multiple parties proposing much higher potential valuations for our assets than the present LRC proposal," he added.
Klip also noted that despite LRC's assertion that they have sought to engage with the company since mid-July 2023, in fact, TNR has been thoughtfully engaged with LRC since January 2022 and have engaged in many discussions with them about possible transactions.
The lead-up to the partial Mariana royalty purchase in February 2023 started between TNR and LRC in January 2022, and the only prior non-specific proposal from LRC was a non-binding offer of $0.085 per share in July 2023. This non-binding offer was rejected by the company in July as it undervalued TNR.
TNR retains a 1.35% NSR on the Mariana Lithium project that is being developed by Ganfeng Lithium in Argentina and holds a 0.36% NSR royalty on the Los Azules copper project, which is being developed by McEwen Mining in Argentina.
The company also has a 7% net profits royalty holding on the Batidero I and II properties of the Josemaria project that is being developed by Lundin Mining in Argentina.
As well, Klip said TNR's share price was up 75% in July compared to the start of this year and increased 81% year-to-date on September 29, 2023.
TNR Gold is working to become the green energy metals royalty and gold company.
Its business model provides a unique entry point in the creation of supply chains for critical materials like energy metals that are powering the energy rEVolution, and the gold industry that is providing a hedge for this stage of the economic cycle.
Contact Sean at sean@proactiveinvestors.com