TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) said it has formed a Special Committee, composed of independent directors, to assess potential strategic transactions in response to “significant interest” from outside entities in exploring strategic opportunities with the royalty company.
The Special Committee will be tasked with evaluating strategies to enhance shareholder value, including the pursuit of strategic transactions and the continued execution of the company's existing business plan.
One of the key aspects of the committee's mandate is to evaluate the unsolicited and non-binding offer made by Lithium Royalty Corp (TSX:LIRC) in September to acquire all outstanding common shares of TNR Gold for a cash consideration of $0.08 per share.
TNR Gold's board has voiced concerns regarding LRC's offer, describing it as an "opportunistic, 'low-ball' offer" that is financially inadequate and not in the best interests of the company or its shareholders.
Currently, the board has not received any updates from LRC regarding the offer.
“We welcome this increased attention on our fantastic company, and we believe shareholders, investors and strategic partners see that the current share price of TNR deeply undervalues the company and its assets,” said Kirill Klip, TNR’s CEO.
Klip expressed enthusiasm about the heightened attention TNR is receiving and emphasized the belief that TNR Gold's current share price undervalues the company and its assets.
The CEO highlighted various royalties and projects held by TNR Gold, including the Mariana Lithium project in Argentina, the Los Azules copper project, and the Shotgun Gold porphyry project in Alaska, as significant components of the company's value.
In February 2023, LRC valued a portion of TNR Gold at US $9 million based on its purchase of a 0.5% NSR royalty involving the Mariana Lithium project. LRC's recent offer of C$15 million (approximately US $11 million) for the entire company was deemed “opportunistic and financially inadequate” by TNR.
“The special committee will help the board achieve these aims by evaluating opportunities in the most streamlined, efficient manner possible,” Klip told shareholders. “We are engaging with multiple parties proposing much higher potential valuations for our assets than LRC's recent proposal, and these are the opportunities that the special committee will focus on first.”
TNR's share price was up 75% in July compared to the start of this year, Klip noted, and increased 81% year-to-date by the end of September 2023.
“We believe the formation of the special committee will assist the board in its next chapter of maximizing shareholder value,” Klip said. “The bottom line is, we believe we can deliver a lot more value for our shareholders.”