The Bull Case For Gold Royalty (GROY) Could Change Following $90M Pedra Branca Equity Raise - Learn Why

• Earlier this month, Gold Royalty Corp. completed a US$90,000,000 follow-on equity offering, issuing 22,500,000 new common shares at US$4.00 each, a US$0.18 per-share discount.
• The capital raise, tied to acquiring a cash-flowing gold and copper royalty over Brazil’s Pedra Branca mine, signals an effort to strengthen and expand the company’s royalty portfolio.
• We’ll now examine how this US$90,000,000 equity raise, and the associated Pedra Branca royalty acquisition, reshape Gold Royalty’s investment narrative.

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Gold Royalty Investment Narrative Recap

To own Gold Royalty, you need to believe in the long term compounding power of a diversified royalty portfolio on growing gold projects, despite current losses and dilution risk. The US$90,000,000 equity raise for the Pedra Branca royalty could support near term cash flow growth, but it also adds to the share count, which keeps ongoing dilution as one of the most important risks for shareholders right now.

Among recent announcements, the upsized revolving credit facility to US$75,000,000 stands out alongside this equity raise, as it shows Gold Royalty leaning on both debt and equity to fund portfolio expansion. Together with the Pedra Branca acquisition, this increases financial flexibility to pursue new royalties, but it also puts more focus on how efficiently new capital is converted into higher cash flow per share.

Yet for all this growth potential, investors should be aware that continued share issuances and in the money warrants could...

Read the full narrative on Gold Royalty (it's free!)

Gold Royalty's narrative projects $46.6 million revenue and $14.7 million earnings by 2028. This requires 55.5% yearly revenue growth and roughly a $16.5 million earnings increase from -$1.8 million today.

Uncover how Gold Royalty's forecasts yield a $5.07 fair value, a 26% upside to its current price.

Exploring Other Perspectives

Three Simply Wall St Community valuations cluster between US$5.07 and US$8.41 per share, reflecting very different views on upside. Against that backdrop, the risk of ongoing dilution from equity raises and warrants becomes a key lens for how you interpret those numbers and what they might mean for future per share outcomes.

Explore 3 other fair value estimates on Gold Royalty - why the stock might be worth just $5.07!

Build Your Own Gold Royalty Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Gold Royalty research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Gold Royalty research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Gold Royalty's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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