28 LEXPERT
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2017/18
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WWW.LEXPERT.CA
Streams, according to Franco-Nevada, are metal pur-
chase agreements that provide the right to purchase met-
als produced from mines at a pre-set price in return for
an upfront deposit. "Streams are particularly well suited
to co-product production providing significant value for
by-product precious metal production," Franco-Nevada
states. "Streams are not royalties because they are not an
interest in land and there is an ongoing cash payment
required to purchase the physical metal."
Majors or mid-tiers with "working interests" have an
ownership position in a property and are therefore liable
for cash calls. Naturally, working interests expose their
holders to more risks than royalties or streams.
More recently, mineral banks have become popular.
Mineral bankers accumulate early-stage gold assets from
distressed companies whose assets are undervalued.
ey also search out deep-pocketed development part-
ners with a view to selling the assets while retaining a
residual royalty or a minority interest.
By way of example, First Mining Finance Corp., a
Vancouver-based public company founded by Keith
Neumeyer, who established First Majestic Silver Corp.
and co-created First Quantum Minerals Ltd., is a min-
eral bank focused, according to its website, on "acquir-
ing, enhancing and monetizing high-quality mineral
assets." e company currently boasts 25 projects with
a gold resource base of 12 million ounces.
"First Mining will add value to its assets through drill-
ing, metallurgical studies, infrastructure improvement
and economic studies," the website states. "When mar-
ket conditions are optimal, the company will monetize
its portfolio through agreements with third parties to
further advance the projects through development and
production while First Mining retains residual inter-
ests in the projects (e.g., joint ventures, royalties and/or
streaming structures)."
ese methods have all contributed to a change in
takeover timing as many of the juniors forgo the trad-
itional exit strategy of an early buyout in favour of bring-
ing a project along before selling it. "It's in this space that
you see private money coming into play converting pro-
jects into public companies as a precursor to a takeover,"
Abraham says.
According to Bennett, the evolution of takeover strat-
egy is the response to the realization that the industry
was overleveraged relative to commodity prices. "What
everyone is trying to achieve is to add something to the
project so as to minimize the role of leverage in M&A
deals," he says.
It's also true that significant shareholders are less in-
clined to walk away from distressed juniors. "ey're
not as willing to forgo their initial investment, and that's
one way in which some juniors have stayed afloat and
obtained further financing," Misetich Dann says. So
while things may have changed, much is happening.
Sarabia, Luis G. Davies Ward Phillips
& Vineberg LLP (416) 367-6961 lsarabia@dwpv.com
Mr. Sarabia acts as counsel in a broad range of commercial litigation
including class actions and international arbitrations. He has significant
expertise in securities cases and in international mining litigation often
involving Spanish-speaking parties.
Scott, Trevor R. Osler, Hoskin & Harcourt LLP
(604) 692-2755 tscott@osler.com
Partner, Mr. Scott provides strategic and legal advice in the mining
sector. He has extensive experience advising senior public and private
companies, national investment dealers, boards of directors and special
committees on M&A (friendly and hostile), debt and equity financings,
restructurings, corporate governance and shareholder activism.
Seguin, Gilles BCF LLP
(514) 397-5570 gilles.seguin@bcf.ca
Mr. Seguin is head of the securities law team at BCF. He specializes in
securities law, M&A and corporate law, and is renowned for his experi-
ence in take-over bids, public offerings and private placements. He
assists in the incorporation and organization of companies. Member of
the Québec Bar since 1982, he was also called to the Barreau de Paris
in 2016.
Shishler, Melanie A. Davies Ward Phillips
& Vineberg LLP (416) 863-5510 mshishler@dwpv.com
Ms. Shishler advises clients on public and private M&A transactions,
both negotiated and unsolicited. She has extensive experience in the
mining sector, regularly advising mining clients on their acquisitions and
dispositions, joint ventures, financings, governance and proxy contests.
Simeon, Peter E. Gowling WLG
(416) 862-4448 peter.simeon@gowlingwlg.com
Mr. Simeon's practice is focused on corporate finance, M&A and
structured products. He works closely with issuers, underwriters and
other corporate clients in industries that include mining, technology,
and energy. His expertise involves public offerings, private placements,
reverse-takeover and qualifying transactions, secondary offerings as well
as share and asset purchase transactions.
Smith, John Lawson Lundell LLP
(604) 631-9120 jsmith@lawsonlundell.com
Mr. Smith has assisted established mining companies with a broad
range of commercial matters, and with financing and M&A transactions,
as well as directing litigation and arbitration when required. He has ex-
tensive experience with the coal industry, including terminal operations,
and with the development of mines in northeastern B.C.
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