Gold Royalty Secures Deal to Acquire Vares Copper Stream

Gold Royalty Corp. ("Gold Royalty" or the "Company") (NYSE American: GROY) is excited to announce that it has signed a binding purchase and sale agreement (the "PSA") with OMF Fund III (Cr) Ltd., managed by Orion Mine Finance Management LP ("Orion"), to acquire a copper stream (the "Stream") on the Vares Silver Project ("Vares"), operated by a subsidiary of Adriatic Metals plc ("Adriatic") in Bosnia and Herzegovina (the "Transaction").

According to the terms of the PSA, Gold Royalty will pay Orion a total consideration of US$50 million to acquire the Stream upon the closing of the Transaction. This amount comprises US$45 million in cash and US$5 million in the form of 2,906,977 Gold Royalty shares.

Transaction Highlights:

The acquisition is expected to be materially accretive to Gold Royalty’s cash flow. The Vares Stream applies to 100% of the copper production from the mining area over the Rupice deposit, with associated ongoing payments equal to 30% of the LME spot copper price and an effective payable copper fixed at 24.5%. First concentrate production at Vares commenced in February 2024, with commercial production anticipated in the fourth quarter of 2024. Adriatic Metals plc has projected ore production of 240-300 kt from Vares in 2024, with copper grades ranging from 0.5-0.6%. Forecasts indicate ore extraction of 750-850 kt and 800-900 kt in 2025 and 2026, respectively, with copper grades of 0.5-0.7% Cu.  Gold Royalty is poised to potentially benefit further from copper prices currently near all-time highs. The asset is high-quality with exploration and expansion upside; Adriatic’s latest guidance targets an 18-year mine life with an attractive operating cost profile. The mine plan is centered on the high-grade polymetallic Rupice deposit, where copper is expected to comprise only 2% of the life-of-mine revenue. Initiatives are underway to increase yearly production rates to 1 million tonnes of ore by 2026. Furthermore, Adriatic has indicated that the project remains open for further exploration within the existing Vares concessions. In a move to align with a robust and proven operating team, Adriatic Metals plc has demonstrated its commitment to excellence. With a highly experienced operating team in place, recent initiatives have focused on enhancing productivity levels and advancing development efforts. These endeavors are in line with Adriatic's disclosed guidance, positioning the company for commercial production in the fourth quarter of 2024.

The Vares Silver Project encompasses a concession area spanning 41 km2, with its focal point situated around the town of Vares in the Vares municipality of Bosnia and Herzegovina. Positioned just a 50-minute drive from Sarajevo, the capital of Bosnia and Herzegovina, the town serves as a central hub for the project. Representing one of the largest investments in Bosnia and Herzegovina, the Vares Operation promises substantial economic and social advantages for the country. The Stream pertains to specific regions within Vares, notably the Rupice area of the project. All mineral reserves and resources outlined in the current Vares mine plan originate from the Rupice deposit and fall under the purview of the Stream.

Vares represents a polymetallic project primarily focused on the production of silver and zinc, complemented by smaller proportions of lead, gold, copper, and antimony. The Rupice underground mine is slated to contribute to current development efforts and near-term production goals.

The Vares Processing Plant boasts a nominal capacity of 800,000 tonnes per annum and utilizes a three-stage process involving crushing, grinding, flotation, and filtration. This results in the production of two marketable concentrates: silver-lead and zinc. These concentrates are slated for transportation via rail to the Port of Ploce for subsequent shipment to smelters. The silver-lead concentrate encompasses payable silver, lead, zinc, copper, and gold, while the zinc concentrate includes payable zinc, silver, and gold. Both the Rupice Mine and Vares Processing Plant have been meticulously designed and constructed, incorporating cutting-edge technology from industry-leading manufacturers, all while adhering to the highest standards of health and safety.

Adriatic unveiled its inaugural production forecast for 2024, 2025, and 2026 on January 24, 2024, subsequent to an updated reserve declaration in December 2023. This guidance stems from successful extension and exploration drilling endeavors, along with ongoing mine optimization initiatives and the progression of higher-grade development at Rupice and Rupice Northwest.