GROY Gold Royalty Corp

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of August 2024

Commission File Number 001-40099

GOLD ROYALTY CORP.

(Translation of registrant’s name into English)

1188 West Georgia Street, Suite 1830

Vancouver, BC V6E 4A2

(604) 396-3066

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

 

 

 

 

 

INCORPORATION BY REFERENCE

 

EXHIBITS 99.1 AND 99.2, INCLUDED WITH THIS REPORT, ARE HEREBY INCORPORATED BY REFERENCE AS EXHIBITS TO THE REGISTRANT’S REGISTRATION STATEMENTS ON FORM F-3, AS AMENDED AND SUPPLEMENTED (FILE NOS. 333-280507, 333-276305, 333-265581, 333-267633, 333-270682) AND FORM S-8 (FILE NO. 333-267421), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GOLD ROYALTY CORP.
Date: August 13, 2024	By:	/s/ Andrew Gubbels
	Name:	Andrew Gubbels
	Title:	Chief Financial Officer

 

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EXHIBIT INDEX

Exhibit		Description of Exhibit
99.1		Condensed interim consolidated financial statements for the three and six months ended June 30, 2024
99.2		Management’s discussion and analysis for the three and six months ended June 30, 2024
99.3		Certification of Chief Executive Officer
99.4		Certification of Chief Financial Officer

 

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Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024

 

 

 

 

 

 

 

 

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				As at June 30, 2024		As at December 31, 2023
		Notes		($)		($)
Assets
Current assets
Cash and cash equivalents				3,584		1,443
Short-term investments				276		342
Accounts receivable				1,153		931
Prepaids and other receivables				2,305		2,830
				7,318		5,546
Non-current assets
Royalty, stream and other mineral interests		4		720,067		671,722
Long-term investment		5		1,462		1,587
Investment in associate				1,737		1,681
Gold-linked loan		6		10,590		10,139
Other long-term assets				280		319
				734,136		685,448
				741,454		690,994
Liabilities
Current Liabilities
Accounts payable and accrued liabilities				4,323		3,851
				4,323		3,851
Non-current liabilities
Non-current portion of lease obligation				227		264
Bank loan		7		24,647		10,031
Convertible debentures		8		23,850		22,763
Embedded derivative		9		1,551		1,921
Deferred income tax liability				130,916		131,214
				181,191		166,193
				185,514		170,044
Equity
Issued capital		10		593,468		556,177
Reserves		10		35,744		34,226
Accumulated deficit				(73,457)		(69,816)
Accumulated other comprehensive income				185		363
				555,940		520,950
				741,454		690,994

 

 

Approved by the Board of Directors:

 

/s/ Ken Robertson		/s/ Warren Gilman
Ken Robertson Director		Warren Gilman Director

 

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				For the three months ended June 30				For the six months ended June 30
				2024		2023		2024		2023
		Notes		($)		($)		($)		($)
Revenue
Revenue		11		1,794		468		4,688		1,235
Cost of sales
Depletion		4		(425)		(204)		(945)		(321)
Gross profit				1,369		264		3,743		914
Other operating income/(expenses)
General and administrative costs		12		(2,120)		(2,590)		(4,976)		(5,841)
Project evaluation costs		12		(13)		(76)		(32)		(249)
Share of gain in associate				152		350		100		222
Dilution gain in associate				—		12		9		12
Operating loss for the period				(612)		(2,040)		(1,156)		(4,942)
Other items
Change in fair value of derivative liabilities				—		9		—		239
Change in fair value of gold-linked loan		6		311		—		950		—
Change in fair value of short-term investments				(52)		(135)		49		(77)
Change in fair value of embedded derivative		9		179		—		370		—
Foreign exchange loss				(100)		(59)		(13)		(107)
Finance costs		13		(1,905)		(328)		(3,689)		(622)
Loan modification gain/(loss)		7		—		—		310		(249)
Other income				38		79		59		113
Net loss before income taxes for the period				(2,141)		(2,474)		(3,120)		(5,645)
Current tax expense				(30)		—		(819)		—
Deferred tax recovery/(expense)				(65)		(22)		298		66
Net loss after income taxes for the period				(2,236)		(2,496)		(3,641)		(5,579)
Other comprehensive income/(loss)
Item that may be reclassified subsequently to net income/loss:
Foreign currency translation differences				(141)		35		(178)		39
Total comprehensive loss for the period				(2,377)		(2,461)		(3,819)		(5,540)
Net loss per share, basic and diluted				(0.01)		(0.02)		(0.02)		(0.04)
Weighted average number of common shares outstanding, basic and diluted				153,412,808		144,560,621		149,595,753		144,425,846

 

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		Notes		Number of Common Shares		Issued Capital ($)		Reserves ($)		Accumulated  Deficit ($)		Accumulated Other Comprehensive Income ($)		Total ($)
Balance at December 31, 2022				143,913,069		551,074		22,420		(40,168)		325		533,651
GRC Shares issued upon vesting of restricted share units				55,513		266		(266)		—		—		—
GRC Shares issued upon exercise of share options				332,298		1,991		(1,823)		—		—		168
GRC Shares issued for marketing services				10,000		22		—		—		—		22
Share-based compensation - share options				—		—		977		—		—		977
Share-based compensation - restricted share units				—		—		647		—		—		647
At-the-Market offering:
GRC Shares issued for cash				496,438		1,254		—		—		—		1,254
Agent fees				—		(31)		—		—		—		(31)
Net loss for the period				—		—		—		(5,579)		39		(5,540)
Dividends - Dividend Reinvestment Plan				162,967		293		—		(293)		—		—
Dividends				—		—		—		(2,599)		—		(2,599)
Balance at June 30, 2023				144,970,285		554,869		21,955		(48,639)		364		528,549
		Notes		Number of Common Shares		Issued Capital ($)		Reserves ($)		Accumulated  Deficit ($)		Accumulated Other Comprehensive Income ($)		Total ($)
Balance at December 31, 2023				145,669,046		556,177		34,226		(69,816)		363		520,950
GRC Shares issued upon vesting of restricted share units		10		73,105		303		(303)		—		—		—
GRC Shares issued for interest payment of convertible debentures		10		332,070		550		—		—		—		550
GRC Shares issued for marketing services		10		8,000		12		—		—		—		12
GRC Shares issued upon exercise of share options - Golden Valley Abitibi Royalties Ltd.		10		21,581		224		(224)		—		—		—
Share-based compensation - share options		10		—		—		122		—		—		122
Share-based compensation - restricted share units		10		—		—		920		—		—		920
Stream acquisition:
GRC Shares issued to acquire streams		10		2,906,977		5,000		—		—		—		5,000
Issuance cost		10		—		(31)		—		—		—		(31)
Bought deal offering:
GRC Shares and Warrants issued for cash		10		20,058,300		33,497		1,003		—		—		34,500
Issuance cost		10		—		(2,264)		—		—		—		(2,264)
Net loss for the period				—		—		—		(3,641)		(178)		(3,819)
Balance at June 30, 2024				169,069,079		593,468		35,744		(73,457)		185		555,940

 

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		For the three months ended June 30				For the six months ended June 30
		2024		2023		2024		2023
		($)		($)		($)		($)
Operating activities
Net loss for the period		(2,236)		(2,496)		(3,641)		(5,579)
Items not involving cash:
Depreciation		19		16		39		37
Depletion		425		204		945		321
Finance costs		1,905		328		3,689		622
Loan modification (gain)/loss		—		—		(310)		249
Other income		(38)		(48)		(59)		(61)
Share-based compensation		459		828		1,054		1,708
Change in fair value of derivative liabilities		—		(9)		—		(239)
Change in fair value of gold-linked loan		(311)		—		(950)		—
Change in fair value of short-term investments		52		135		(49)		77
Change in fair value of embedded derivative		(179)		—		(370)		—
Share of gain in associate		(152)		(350)		(100)		(222)
Dilution gain in associate		—		(12)		(9)		(12)
Deferred tax (recovery)/expense		65		22		(298)		(66)
Unrealized foreign exchange (gain)/loss		50		5		(38)		5
Operating cash flows before movements in working capital		59		(1,377)		(97)		(3,160)
Net changes in non-cash working capital items:
Accounts receivables		1,126		122		385		259
Prepaids and other receivables		355		521		470		(427)
Accounts payable and accrued liabilities		(553)		(603)		565		(70)
Cash provided by/(used in) operating activities		987		(1,337)		1,323		(3,398)
Investing activities
Investment in royalties, stream and other mineral interests		(45,623)		(116)		(45,646)		(143)
Proceeds on disposition of marketable securities		123		1,684		123		2,647
Land agreements proceeds credited against mineral properties		155		89		1,205		1,227
Dividend received		—		21		—		45
Interest received		38		23		59		24
Cash provided by investing activities		(45,307)		1,701		(44,259)		3,800
Financing activities
Proceeds from issuance of GRC Shares and Warrants		32,236		360		32,236		1,391
Net proceeds from bank loan/(payment of bank transaction costs)		14,853		(58)		14,716		(32)
Interest paid		(970)		(251)		(1,831)		(371)
Payment of lease obligations		(24)		(18)		(44)		(41)
Dividends		—		(2,599)		—		(2,599)
Cash provided by/(used in) financing activities		46,095		(2,566)		45,077		(1,652)
Effect of exchange rate changes on cash		—		1		—		1
Net increase/(decrease) in cash		1,775		(2,201)		2,141		(1,249)
Cash and cash equivalents
Beginning of period		1,809		6,799		1,443		5,847
End of period		3,584		4,598		3,584		4,598

 

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1. Corporate information

Gold Royalty Corp. ("GRC" or the "Company") is a company incorporated in Canada on June 23, 2020 and domiciled in Canada. GRC is principally engaged in acquiring gold-focused royalty and mineral stream interests. The registered office of the Company is located at 1000 Cathedral Place, 925 West Georgia Street, Vancouver, British Columbia, V6C 3L2, Canada. The principal address of the Company is located at 1830 – 1188 West Georgia Street Vancouver, BC, V6E 4A2, Canada

The Company’s common shares (the "GRC Shares") and common share purchase warrants ("Warrants") are listed on the NYSE American under the symbols "GROY" and "GROY-WT", respectively.

2. Basis of preparation and Significant accounting policies

2.1 Statement of compliance

The Company’s condensed interim consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (IASB) applicable to the presentation of interim financial statements including International Accounting Standard 34, Interim Financial Reporting. The condensed interim consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2023.

These condensed interim consolidated financial statements were authorized for issue by the Company’s board of directors (the "Board") on August 13, 2024.

2.2 Basis of presentation

The Company’s condensed interim consolidated financial statements have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. The Company’s condensed interim consolidated financial statements are presented in United States dollars ("U.S. dollar", “$” or "dollar"). All values are rounded to the nearest thousand except where otherwise indicated.

The accounting policies applied in the preparation of these condensed interim consolidated financial statements are consistent with those applied and disclosed in the Company’s annual financial statements for the year ended December 31, 2023. The Company’s interim results are not necessarily indicative of its results for a full year.

The condensed interim consolidated financial statements include the financial statements of Gold Royalty Corp. and the following wholly-owned subsidiaries:

						% Equity Interest as at
Name of subsidiary		Country of Incorporation		Functional Currency		June 30, 2024		December 31, 2023
Gold Royalty U.S. Corp		USA		U.S. dollar		100%		100%
Ely Gold Royalties Inc.		Canada		U.S. dollar		100%		100%
1320505 B.C. Ltd		Canada		U.S. dollar		100%		100%
Nevada Select Royalty, Inc.		USA		U.S. dollar		100%		100%
Ren Royalties LLC		USA		U.S. dollar		100%		100%
VEK Associates		USA		U.S. dollar		100%		100%
DHI Minerals (U.S.) Ltd		USA		U.S. dollar		100%		100%
Golden Valley Abitibi Royalties Ltd.		Canada		U.S. dollar		100%		100%
Calone Mining Ltd.		Canada		U.S. dollar		100%		100%
Abitibi Royalties USA Inc.		USA		U.S. dollar		100%		100%
1398464 B.C. Ltd		Canada		U.S. dollar		100%		100%
Gold Royalty Holdings Ltd.		Canada		U.S. dollar		100%		100%
Groyco Mex. S.A. de C.V.		Mexico		U.S. dollar		100%		100%

All subsidiaries are consolidated from the date the Company obtained control until the date that its control ceases. Control is achieved when the Company is exposed to, or has rights to, variable returns from the subsidiaries and has the ability to affect those returns through its power over the entity. All inter-company transactions, balances, income and expenses are eliminated through the consolidation process. The accounts of all subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

 

 

 

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3. IFRS Pronouncement

3.1 Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments

In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7). These amendments updated classification and measurement requirements in IFRS 9 Financial Instruments and related disclosure requirements in IFRS 7 Financial Instruments: Disclosures. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance (ESG)-linked features and other similar contingent features. The IASB added disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs and amended disclosures relating to equity instruments designated at fair value through other comprehensive income.

The amendments are effective for annual periods beginning on or after January 1, 2026, with early application permitted. Management is currently assessing the effect of these amendments on our financial statements.

3.2 IFRS 18 – Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements (IFRS 18), which replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by requiring income and expenses to be presented into the three defined categories of operating, investing and financing, and by specifying certain defined totals and subtotals. Where company-specific measures related to the income statement are provided, IFRS 18 requires companies to disclose explanations around these measures, which are referred to as management-defined performance measures. IFRS 18 also provides additional guidance on principles of aggregation and disaggregation which apply to the primary financial statements and the notes. IFRS 18 will not affect the recognition and measurement of items in the financial statements, nor will it affect which items are classified in other comprehensive income and how these items are classified. The standard is effective for reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective application is required, and early application is permitted. Management is currently assessing the effect of this new standard on our financial statements.

3.3 Amendments to IAS 1 – Presentation of Financial Statements

In October 2022, the IASB issued amendments to IAS 1, Presentation of Financial Statements titled Non-current Liabilities with Covenants. These amendments seek to improve the information that an entity provides when its right to defer settlement of a liability is subject to compliance with covenants within 12 months after the reporting period. These amendments to IAS 1 override and incorporate the previous amendments, Classification of Liabilities as Current or Non-current, issued in January 2020, which clarified that liabilities are classified as either current or non-current depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if a company has a substantive right to defer settlement for at least 12 months at the end of the reporting period. The amendments were effective for annual periods beginning on or after January 1, 2024, and adoption of these amendments did not have an effect on our financial statements.

4. Royalty, stream and other mineral interests

		($)
Balance at December 31, 2022		667,504
Additions		29,771
Disposal		(322)
Depletion		(943)
Land agreement proceeds		(1,909)
Impairments		(22,379)
Balance at December 31, 2023		671,722
Additions		50,615
Disposal		(112)
Depletion		(945)
Land agreement proceeds		(1,213)
Balance at June 30, 2024		720,067

Vares Copper Stream

On June 4, 2024, the Company completed the acquisition from OMF Fund III (Cr) Ltd., an entity managed by Orion Mine Finance Management LP of a copper stream ("Stream") on the Vares Silver Project, operated by a subsidiary of Adriatic Metals plc located in Bosnia and Herzegovina. The Company paid $50 million, consisting of $45 million satisfied in cash and $5 million satisfied by issuing 2,906,977 GRC shares. The Stream applies to 100% of copper production from the mining area over the Rupice deposit. The Stream has associated ongoing payments equal to 30% of the LME spot copper price, with the effective payable copper fixed at 24.5%. Transaction costs amounting to $479 were recorded as part of the carrying value of the Stream acquisition cost.

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4. Royalty, stream and other mineral interests (continued)

Other Mineral Interests

On June 18, 2024, the Company acquired mining claims located in Nye County, Nevada for $112. All of these claims were disposed of on June 20, 2024 for proceeds of $112. The Company also retained 2% net smelter return ("NSR") on these claims.

On March 26, 2024, the Company acquired mining claims located in Lander County, Nevada for $15. Transaction costs amounting to $8 were recorded as part of the mineral properties carrying value.

Land Agreement Proceeds

In the three and six months ended June 30, 2024, the Company received land agreement proceeds that were credited against mineral properties, which related to its royalty generator model of $163 (2023: $89) and $1,213 (2023: $1,292), respectively.

Summary Of Selected Royalties and Stream

The following is a summary of selected royalties and a stream owned by the Company as of June 30, 2024:

Asset		Interest		Jurisdiction
Producing
Borden Mine (1)		0.5% NSR		Ontario, Canada
Canadian Malartic Property (open pit) (1)		2.0% – 3.0% NSR		Québec, Canada
Cozamin Mine (1)		1.0% NSR		Zacatecas, Mexico
Côté Gold Project (1)		0.75% NSR		Ontario, Canada
Isabella Pearl Mine (1)		0.375% Gross Revenue Royalty		Nevada, USA
Vares Project		100% Copper Stream		Bosnia and Herzegovina
Borborema Project		2.0% NSR		Rio Grande do Norte, Brazil
Other significant royalties and stream
Fenelon Gold Property		2.0% NSR		Québec, Canada
Gold Rock Project		0.5% NSR		Nevada, USA
Granite Creek		10% NPI		Nevada, USA
Hog Ranch Project		2.25% NSR		Nevada, USA
La Mina Project		2.0% NSR		Colombia
Lincoln Hill Project		2.0% NSR		Nevada, USA
Canadian Malartic - Odyssey Project (1) (underground)		3.0% NSR		Québec, Canada
Railroad-Pinion Project (1)		0.44% NSR		Nevada, USA
REN - Carlin Mines		1.5% NSR		Nevada, USA
REN - Carlin Mines (NPI)		3.5% NPI		Nevada, USA
São Jorge Project		1.0% NSR		Brazil

Note:

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4. Royalty, stream and other mineral interests (continued)

		Cost						Accumulated Depletion						Others						Carrying Amount
		December 31, 2023		Additions		June 30, 2024		December 31, 2023		Depletion		June 30, 2024		Disposition		Land agreement proceeds		Total		June 30, 2024
		($)		($)		($)		($)		($)		($)				($)		($)		($)
Borborema		21,250		—		21,250		—		—		—		—		—		—		21,250
Borden Lake		3,889		—		3,889		(902)		(154)		(1,056)		—		—		—		2,833
Cheechoo		12,640		—		12,640		—		—		—		—		—		—		12,640
Côté		16,132		—		16,132		—		(55)		(55)		—		—		—		16,077
Croinor		5,779		—		5,779		—		—		—		—		—		—		5,779
Cozamin		7,369		—		7,369		(271)		(287)		(558)		—		—		—		6,811
Fenelon		41,553		—		41,553		—		—		—		—		—		—		41,553
Gold Rock		3,275		—		3,275		—		—		—		—		—		—		3,275
Granite Creek		21,768		—		21,768		—		—		—		—		—		—		21,768
Hog Ranch		12,879		—		12,879		—		—		—		—		—		—		12,879
Lincoln Hill		5,421		—		5,421		—		—		—		—		—		—		5,421
Malartic		318,393		—		318,393		(999)		(449)		(1,448)		—		—		—		316,945
Railroad-Pinion		3,032		—		3,032		—		—		—		—		—		—		3,032
REN (Net Profit Interest)		21,017		—		21,017		—		—		—		—		—		—		21,017
REN (Net Smelter Return)		42,921		—		42,921		—		—		—		—		—		—		42,921
São Jorge		2,274		—		2,274		—		—		—		—		—		—		2,274
Titiribi		3,010		—		3,010		—		—		—		—		—		—		3,010
Vares		—		50,479		50,479		—		—		—				—		—		50,479
Whistler		2,575		—		2,575		—		—		—		—		—		—		2,575
Yellowknife		1,870		—		1,870		—		—		—		—		—		—		1,870
Others		127,754		136		127,890		(907)		—		(907)		(112)		(1,213)		(1,325)		125,658
Total (1)		674,801		50,615		725,416		(3,079)		(945)		(4,024)		(112)		(1,213)		(1,325)		720,067

Included in others are deferred acquisitions costs of $1 (2023: $99) and $1 (2023: $99) incurred in evaluating royalty and other mineral interests acquisitions during the three and six months ended June 30, 2024. Deferred acquisition costs are reallocated to the asset upon signing of a definitive acquisition agreement. These costs are primarily expensed to professional fees if management determines not to proceed with a proposed acquisition.

During the three and six months ended June 30, 2024, the Company recognized a depletion expense of $425 (2023: $204) and $945 (2023: $321), respectively.

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5. Long-term investment

As at June 30, 2024, long-term investment comprises $1,462 (C$2 million) (December 31, 2023: $1,587 (C$2 million)) representing a 12.5% equity interest in Prospector Royalty Corp. ("PRC"), a private company. The investment grants the Company access to PRC's extensive digital royalty database and includes a royalty referral agreement facilitating the acquisition of identified royalties.

6. Gold-linked loan

On December 19, 2023 (the "Advance Date"), the Company entered into a definitive agreement with Borborema Inc. (the "Borrower"), providing the Borrower with project financing for its Borborema Project of $10,000. The loan is secured against certain assets of the Borrower, and bears interest at 110 ounces of gold per quarter, and is payable through cash settlement or physical delivery of gold. The Borrower has the option to prepay the loan with all interest accrued and unpaid after 24 months following the Advance Date. The Borrower will have the option to elect its choice of payment (the "Prepayment Option").

The loan is classified as a financial asset and measured at fair value through profit or loss in accordance with IFRS 9 Financial Instruments. The Prepayment Option has been accounted for as part of the fair value of the loan in accordance with IFRS 9 Financial Instruments. The fair value of the loan is remeasured on the reporting date and the change in fair value is recognized in the consolidated statements of loss and comprehensive loss.

As at June 30, 2024, the fair value of the loan has been estimated using a discounted cash-flow approach based on the following assumptions: risk-free interest rate of 4.10%, calibrated credit spread of 2.96%, estimated long-term gold price of $1,915 per ounce and expected volatility of gold of 15.18%. The Company recorded a fair value gain on the loan of $311 (2023: $nil) and $950 (2023: $nil) in change in fair value of gold-linked loan in the consolidated statements of loss and comprehensive loss for the three and six months ended June 30, 2024, respectively.

		($)
Investment in Gold-linked loan		10,000
Interest income credited against Gold-linked loan		(33)
Change in fair value during the year		172
Balance at December 31, 2023		10,139
Interest income credited against Gold-linked loan		(499)
Change in fair value during the period		950
Balance at June 30, 2024		10,590

 

7. Bank loan

On January 24, 2022, the Company secured a $10,000 revolving credit facility (the "Facility") with the Bank of Montreal, that includes an accordion feature providing for an additional $15,000 of availability (the "Accordion"), subject to certain conditions. The Facility, secured by the Company's assets, is for general corporate use, acquisitions, and investments subject to certain limitations. Interest rates for amounts drawn are based on the U.S. dollar Base Rate plus 3.00% per annum or Adjusted Term SOFR plus 4.00% per annum. Undrawn amounts incur a standby fee of 0.90% per annum.

On February 8, 2022, and February 24, 2022, the Company drew down $3,000 and $7,000, respectively. On September 14, 2022, the Company extended the maturity date of the Facility with Bank of Montreal from March 31, 2023 to March 31, 2025, with an Accordion option, subject to conditions. On February 10, 2023, the Company expanded the Facility to $20,000 with an additional $15,000 accordion option. On February 17, 2023, the Company drew down $10,287 from the expanded Facility to settle the earlier drawdown and transaction costs. On August 30, 2023, the Facility was increased to $25,000 with a $10,000 accordion option. On August 24, 2023, the Company drew $7,500 to acquire Cozamin and settled it on December 15, 2023. On June 4, 2024, the Company expanded the Facility to $30,000 with an accordion feature providing for an additional $5,000 of availability, subject to certain additional conditions and drew $15,000 to acquire the Vares Copper Stream. The balance as of June 30, 2024, was $25,287.

The following outlines the movement of the bank loan from December 31, 2022, to June 30, 2024:

		($)
Balance at December 31, 2022		9,448
Additional draw-down		17,787
Repayment		(17,500)
Less: transaction costs and fees		(418)
Modification adjustment		249
Interest expense		1,584
Interest paid		(1,119)
Balance at December 31, 2023		10,031
Additional draw-down		15,000
Less: transaction costs and fees		(284)
Modification adjustment		(310)
Interest expense		758
Interest paid		(548)
Balance at June 30, 2024		24,647

 

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8. Convertible debentures

On December 15, 2023, the Company completed a private placement of $40,000 aggregate principal amount of unsecured convertible debentures (the "Debentures") with Queen's Road Capital Investment Ltd. ("QRC") and Taurus Mining Royalty Fund L.P., a fund managed by Taurus Funds Management Pte Limited. The Debentures are unsecured and bear interest at 10% per annum over a 5-year term, interest is payable 70% in cash and 30% in GRC Shares issuable at a price equal to the 20-day volume-weighted average trading price ("VWAP") calculated at each interest payment date.

The Company identified the Debentures as compound financial instruments. In accordance with IFRS 9 Financial Instruments and IAS 32 Financial Instruments: Presentation, the liability component excluding the Redemption Option (the "Host Contract") are classified as debt instruments and are measured at amortized cost.

The Company will be entitled to redeem the Debentures at par within a period of fourteen days from the third anniversary of the date of the issuance of the Debentures. Should the Company exercise its right to redeem the Debentures during this period, the holders are entitled to convert all of the outstanding Debentures into GRC Shares at a conversion price of US$1.75 (the "Redemption Option"). The Redemption Options are identified as embedded derivatives in accordance with IFRS 9 Financial Instruments and estimated at $1,951 on the issuance (Note 9).

The Debentures will be convertible at the holder's option into GRC Shares at a conversion price of $1.90 (the "Conversion Option"). As the number of GRC Shares to be issued under the Conversion Options is determined as the converted amount of the Debentures divided by the fixed conversion price of $1.90, the Conversion Options were accounted for separately as equity instruments in accordance with IAS 32 Financial Instruments: Presentation. The Conversion Options were recognized at the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component, in accordance with IFRS 9 Financial Instruments.

On the issuance date, the principal of $23,471 was allocated to the Host Contract, $1,951 was allocated to the Redemption Options as embedded derivatives (Note 9) and the residual value of $14,578 was allocated to the Conversion Options as equity. A deferred tax liability of $2,309 related to the taxable temporary difference arising from the equity portion of the Debentures was recognized as an offset in equity. The Company incurred transaction costs and fees of $1,481 for the issuance of the Debentures, of which $943 was allocated as a reduction to the liability portion and the residual value of $538 was allocated as reduction to the Conversion Options as equity.

During the three and six months ended June 30, 2024, the Company recognized interest expense of $1,052 (2023: $nil) and $2,099 (2023: $nil) and accretion of $426 (2023: $nil) and $821 (2023: $nil), respectively.

The following outlines the movement of the Debentures balance from December 15, 2023 to June 30, 2024:

		($)
Face value of the Debentures issued on December 15, 2023		40,000
Less: Transaction costs and fees		(943)
Less: Redemption Option classified as embedded derivatives (Note 9)		(1,951)
Less: Equity component of convertible debentures issued for cash		(14,578)
Interest expense		235
Balance at December 31, 2023		22,763
Finance costs		2,920
Interest paid		(1,833)
Balance at June 30, 2024		23,850

 

9. Embedded derivative

The embedded derivative related to the Debentures (Note 8) was valued upon initial recognition at a fair value of $1,951. At each reporting date, the change in fair value of the embedded derivatives is recognized in the consolidated statements of loss and comprehensive loss. The Company recorded a fair value gain of $179 (2023: $nil) and $370 (2023: $nil) in the consolidated statements of loss and comprehensive loss for the three and six months ended June 30, 2024, respectively.

The following outlines the movement of the embedded derivatives balance from December 15, 2023 to June 30, 2024:

		($)
Fair value of embedded derivative on December 15, 2023		1,951
Change in fair value during the year		(30)
Balance at December 31, 2023		1,921
Change in fair value during the period		(370)
Balance at June 30, 2024		1,551

As at June 30, 2024, the fair value of the embedded derivatives has been estimated using the White Hull one factor model based on the following assumptions: share price of $1.41, calibrated credit spread of 22.86%, expected interest rate volatility of 1.16% and mean reversion constant of 0.004%.

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10. Issued capital

10.1 Common Shares

The authorized share capital of the Company consists of an unlimited number of GRC Shares and an unlimited number of preferred shares issuable in series without par value.

On June 4, 2024, the Company issued 2,906,977 GRC Shares in satisfaction of the acquisition of the Vares Copper Stream (Note 4). The transaction cost incurred in respect of the issuance of the shares was $31.

On May 31, 2024, the Company completed a public offering of units ("Unit") of the Company. Pursuant to the Offering, the Company issued, on a bought deal basis, 20,058,300 Units, including 2,616,300 Units pursuant to the full exercise of the over-allotment option, at a price of $1.72 per Unit for aggregate gross proceeds of $34,500 and incurred issuance costs of $2,264. Each Unit consists of one GRC Share and Warrant. Each Warrant is exercisable to acquire one GRC Share for a period of thirty-six months after closing at an exercise price of $2.25. The proceeds were used to fund the acquisition of the Vares Copper Stream.

During the three and six months ended June 30, 2024, the Company issued 194,504 and 413,175 shares in satisfaction of vesting of RSUs ("Restricted Share Units"), marketing services and debentures interest payment, respectively. 21,581 GRC Shares were issued upon exercise of share options during the three months period ended June 30, 2024.

10.2 Restricted Share Units

The following outlines the movements of the Company’s RSUs:

		Number of RSUs		Weighted Average Grant Price ($)
Balance at December 31, 2022		769,547		3.25
Granted		1,556,164		1.55
Vested		(257,489)		3.24
Forfeited		(3,102)		2.81
Balance at December 31, 2023		2,065,120		1.97
Vested		(73,105)		4.19
Forfeited		(85,138)		2.00
Balance at June 30, 2024		1,906,877		1.89

During the three and six months ended June 30, 2024, the Company recorded share-based compensation expenses of $417 (2023: $325) and $920 (2023: $647), respectively. The expense is based on the fair value of the RSUs, determined using the closing value of GRC Shares at the grant date, and is recognized over the vesting period. The RSUs are classified as equity instruments since they will be settled in GRC Shares.

10.3 Reserves

The following outlines the movements of the Company’s common share purchase warrants, share options and RSUs:

		Reserves
		Warrants		Share Based Awards		Convertible Debentures		Total
		($)		($)		($)		($)
Balance at December 31, 2022		8,292		14,128		—		22,420
Vesting of RSUs		—		(826)		—		(826)
Exercise of share options - Golden Valley Abitibi Royalties Ltd		—		(1,823)		—		(1,823)
Convertible debentures:
Equity component of convertible debentures issued for cash, net of taxes		—		—		12,270		12,270
Transaction fees and issuance costs		—		—		(538)		(538)
Share-based compensation - share options		—		1,405		—		1,405
Share-based compensation - RSUs		—		1,318		—		1,318
Balance at December 31, 2023		8,292		14,202		11,732		34,226
Vesting of RSUs		—		(303)		—		(303)
Exercise of share options - Golden Valley Abitibi Royalties Ltd		—		(224)		—		(224)
Bought deal offering:
GRC Shares and Warrants issued for cash		1,003		—		—		1,003
Share-based compensation - share options		—		122		—		122
Share-based compensation - RSUs		—		920		—		920
Balance at June 30, 2024		9,295		14,717		11,732		35,744

 

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10. Issued capital (Continued)

10.3 Reserves (Continued)

Common Share Purchase Warrants

As at June 30, 2024, there were 2,430,000 Ely Warrants outstanding exercisable into 595,350 GRC Shares based on a 0.245 exchange ratio. Their weighted average exercise price is C$4.59 per GRC Share and with a weighted average remaining life of 1.13 years.

Share Options

The following outlines the movements of the Company’s common share options:

		Number of options		Weighted Average Exercise Price ($)
Balance at December 31, 2022		8,236,668		3.18
Granted		5,000		2.33
Exercised - Golden Valley Abitibi Royalties Ltd.		(332,298)		1.04
Forfeited - Golden Valley Abitibi Royalties Ltd.		(143,159)		1.04
Balance at December 31, 2023		7,766,211		3.31
Exercised - Golden Valley Abitibi Royalties Ltd.		(21,581)		1.28
Forfeited - Golden Valley Abitibi Royalties Ltd.		(51,235)		1.28
Balance at June 30, 2024		7,693,395		3.33

During the three and six months ended June 30, 2024, no share options were granted.

The weighted average share price at the date of exercise of options exercised during the three and six months ended June 30, 2024 was $1.38 (2023: $nil) and $1.38 (2023: $nil), respectively.

A summary of share options outstanding and exercisable as at June 30, 2024, are as follows:

		Options Outstanding						Options Exercisable
Exercise Price ($)		Number of Options Outstanding		Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Life (years)		Number of Options exercisable		Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Life (years)
1.00 to 1.99		1,902,656		1.37		2.11		1,902,656		1.37		2.11
2.00 to 2.99		2,373,708		2.58		3.37		2,372,458		2.58		3.37
3.00 to 3.99		17,514		3.06		2.89		17,514		3.06		2.89
4.00 to 4.99		894,517		4.86		2.23		894,517		4.86		2.23
5.00 and above		2,505,000		5.00		1.69		2,505,000		5.00		1.69
		7,693,395		3.33		2.38		7,692,145		3.33		2.38

The fair value of the Company’s share options recognized as share-based compensation expense during the three and six months ended June 30, 2024 was $30 (2023: $449) and $122 (2023: $977), respectively, using the Black-Scholes option pricing model.

11. Revenue

		For the three months ended June 30				For the six months ended June 30
		2024		2023		2024		2023
		($)		($)		($)		($)
Canadian Malartic		438		58		1,070		76
Cozamin		272		—		524		—
Borden		126		225		305		288
Côté Gold		106		—		106		—
Jerritt Canyon		—		78		—		198
Borborema		588		—		1,137		—
Others		264		107		1,546		673
		1,794		468		4,688		1,235

During the three and six months ended June 30, 2024, others consist of land agreement proceeds of $238 (2023: $44) and $1,240 (2023: $246) and advance mineral royalty payments received of $26 (2023: $25) and $306 (2023: $356).

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12. General and administrative costs and project evaluations costs

		For the three months ended June 30				For the six months ended June 30
		2024		2023		2024		2023
		($)		($)		($)		($)
Corporate administrative costs		775		756		1,933		1,776
Employee costs		467		753		1,200		1,411
Professional fees		413		313		782		1,158
		1,655		1,822		3,915		4,345
Depreciation		19		16		39		37
Share-based compensation		459		828		1,054		1,708
		2,133		2,666		5,008		6,090

During the three and six months ended June 30, 2024, included in the total general and administrative costs and project evaluation costs were general and administrative costs of $2,120 (2023: $2,590) and $4,976 (2023: $5,841) and project evaluation costs of $13 (2023: $76) and $32 (2023: $249), respectively.

13. Finance costs

		For the three months ended June 30				For the six months ended June 30
		2024		2023		2024		2023
		($)		($)		($)		($)
Interest expense on bank loan		422		322		758		611
Interest expense on convertible debentures		1,052		—		2,099		—
Accretion of convertible debentures		426		—		821		—
Interest expense on lease liabilities		5		6		11		11
		1,905		328		3,689		622

 

14. Financial instruments

The Company's financial instruments consist of cash and cash equivalents, short-term and long-term investments, gold-linked loan, accounts receivable, accounts payable and accrued liabilities, lease obligation, bank loan, convertible debentures, embedded derivatives, and derivative liabilities.

The Company uses the following hierarchy for determining and disclosing fair value of financial instruments:

		As at June 30, 2024
		Level 1		Level 2		Level 3		Total
		($)		($)		($)		($)
Recurring measurements
Financial assets at FVTPL
Short-term investments		276		—		—		276
Gold-linked loan		—		—		10,590		10,590
Financial assets at FVOCI
Long-term investments		—		—		1,462		1,462
Financial liabilities at FVTPL
Embedded derivatives		—		—		1,551		1,551
		276		—		13,603		13,879

 

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14. Financial instruments (continued)

		As at December 31, 2023
		Level 1		Level 2		Level 3		Total
		($)		($)		($)		($)
Recurring measurements
Financial assets at FVTPL
Short-term investments		342		—		—		342
Gold-linked loan		—		—		10,139		10,139
Financial assets at FVOCI
Long-term investments		—		—		1,587		1,587
Financial liabilities at FVTPL
Embedded derivatives		—		—		1,921		1,921
		342		—		13,647		13,989

There were no transfers between the levels of the fair value hierarchy during the six months ended June 30, 2024.

The Company's short-term investments are initially recorded at fair value and subsequently revalued to their fair market value at each period end based on inputs such as quoted equity prices. The Company's short-term investments are measured at fair value on a recurring basis and classified as level 1 within the fair value hierarchy.

The fair value of the gold-linked loan is classified as Level 3 and is determined based on a discounted cash flow approach, which includes significant inputs not based on observable market data such as long-term gold price and expected volatility of gold.

The Company's long-term investments are initially recorded at fair value and subsequently revalued to their fair market value at each period end based on inputs such as quoted equity prices. The fair value of the long-term investment is classified as Level 3 and measured based on data such as the price paid by arm's length parties in recent transactions.

The fair value of the embedded derivatives related to the convertible debentures is classified as Level 3 and is determined using the White Hull one factor model, which includes significant inputs not based on observable market data such as expected credit spread.

The fair value of the Company's other financial instruments, which include cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximate their carrying values due to their short term to maturity. Bank loan, convertible debentures, and lease obligations are measured at amortized cost. The fair value of the bank loan and lease obligation approximate their carrying values as their interest rates are comparable to current market rates. The fair value of the convertible debentures approximates their carrying values as there were not significant changes in economic and risk parameters or assumptions related to the convertible debentures since the issuance.

14.1 Financial risk management objectives and policies

The financial risk arising from the Company’s operations are credit risk, liquidity risk, currency risk, equity price risk and interest rate risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with financial instruments and the policies on how the Company mitigates these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

14.2 Credit risk

Credit risk is the risk of an unexpected loss if a customer or third-party to a financial instrument fails to meet its contractual obligations. Credit risk for the Company is primarily associated with the Company's bank balances, accounts receivable and gold-linked loan. The Company mitigates credit risk associated with its bank balances by holding cash with Schedule I chartered banks in Canada and their US affiliates. The Company's maximum exposure to credit risk is equivalent to the carrying value of its cash and cash equivalents in excess of the amount of government deposit insurance coverage for each financial institution. In order to mitigate its exposure to credit risk, the Company closely monitors its financial assets.

14.3 Liquidity risk

Liquidity risk is the risk that the Company will not be able to settle or manage its obligations associated with financial liabilities. To manage liquidity risk, the Company closely monitors its liquidity position and ensures it has adequate sources of funding to finance its projects and operations. The Company’s working capital (current assets less current liabilities) as at June 30, 2024, was $2,995 compared to $1,695 as at December 31, 2023. The Company's accounts payable and accrued liabilities are expected to be realized or settled, respectively, within a one-year period.

The Company's future profitability will be dependent on the royalty income to be received from mine operators. Royalties are based on a percentage of the minerals, or the products produced, or revenue or profits generated from the property which is typically dependent on the prices of the minerals the property operators are able to realize. Mineral prices are affected by numerous factors such as interest rates, exchange rates, inflation or deflation and global and regional supply and demand. In managing liquidity risk, the

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14. Financial instruments (continued)

14.3 Liquidity risk (continued)

Company takes into account the anticipated cash flows from operating activities and its holding of cash and short-term investments. The Company believes it has the adequate liquidity to meet its obligations and to finance its planned activities.

As at June 30, 2024, the Company has the following contractual obligations, including payments due for each of the next five years and thereafter:

		Payments Due by Period
		Total		Less than 1 year		1 – 3 years		4 – 5 years		After 5 years
		($)		($)		($)		($)		($)</