Royal Gold to acquire Canada's Sandstorm Gold for $3.5 billion

Royal Gold RGLD said on Monday it will acquire Canadian peer Sandstorm Gold SSL for about $3.5 billion, helping the royalty firm strengthen its position in North America at a time when bullion has soared to record highs.

Sandstorm shares rose 6.4%, while Royal Gold's stock was down 7.6% in afternoon trade.

Gold royalty companies generate revenue by collecting a percentage of production of the metal from mining operations in exchange for upfront payments or investments.

The deal gives Royal Gold revenue from 40 more mining assets that are expected to produce about 65,000 to 80,000 gold equivalent ounces (GEO) this year, when bullion has seen a surge in safe-haven flows following U.S. President Donald Trump's tariff policies.

Under the all-stock deal, Colorado-based Royal Gold will issue 0.0625 shares for each Sandstorm share. The offer represents a premium of 16.7% to Sandstorm's close on the New York Stock Exchange on Friday.

Upon completion of the transaction, Royal Gold shareholders will own nearly 77% and Sandstorm shareholders will own about 23% of the combined company.

Royal Gold will continue to be a gold-focused company after the takeover, with 75% of total revenue coming from the precious metal.

About 41% of production will be at mines located in the U.S. and Canada, and the remainder from countries where mining is a welcome and well-established contributor to local economies, the company added.

"Overall, shareholders of both companies will end up with a larger, more diversified portfolio of royalty and streaming assets. We expect this transaction to close without any interlopers," said Canaccord Genuity analyst Carey MacRury.

On Monday, Royal Gold also announced the acquisition of Horizon Copper HCU in an all-cash deal worth $196 million.

The deals are expected to close in the fourth quarter of 2025.