Gold-focused Canadian resource royalty company Franco-Nevada Corporation has announced that it intends to buy rival International Royalty Corporation (IRC), a Colorado-based royalty firm for approximately C$640 million ($608 million) in an all-cash deal.

The offer price of C$6.75 per share of IRC represents a 43 per cent premium to its closing price on Friday on the Toronto Stock Exchange (TSX), the company said in a statement. IRC has about 93.7 million outstanding common shares.

Franco-Nevada a gold focused royalty company with additional interests in platinum metals, oil and gas and other assets. The majority of revenues are generated from a diversified portfolio of over 300 high quality assets located principally in the US, Canada and Australia.

Franco-Nevada also holds a pipeline of potential future cash flowing assets that are being developed, permitted or explored. Its shares are listed on the TSX.

IRC confirmed through a press release yesterday that it has been informed of Franco-Nevada's intention to submit a formal offer, and the company's board will hold a meeting with its financial and legal advisors for an appropriate response.

Further to the news of a possible takeover, IRC shares surged a whopping 50 per cent to end at C$7.06 yesterday, while Franco-Nevada shares dropped 6.6 per cent to C$26.30 on the TSX.

While Franco-Nevada has not made any concrete offer, it intends to circulate to IRC shareholders a takeover bid, including an offer to purchase along with other terms and conditions, as soon as possible.

Subject to all the required customary and regulatory clearances, Franco-Nevada intends to complete the acquisition by the end of January, 2010.

Some analysts believe that Franco-Nevada need to boost its offer if it is serious about the buyout, although no other company has shown any interest so far.

Eaglewood, Colorado-based IRC is a global mineral royalty company with a portfolio of 85 royalties on projects in five continents, in 12 countries, and covering commodities such as gold, silver, nickel, copper, zinc, cobalt, coal etc.

Its holdings include net smelter returns from the flagship Voisey's Bay nickel-cobalt-copper mine in Canada, Chilean portion of the Pascua-Lama project of gold, silver, copper, Las Cruces copper project in Spain, and about 3.0 million acres of gold lands in Western Australia.

The company's shares are listed on the Toronto as well as New York stock exchanges.