Nomad Royalty Company Reports Q3 Results, Provides Asset Updates and Declares Fourth Quarter 2021 Dividend

TSX: NSR
NYSE: NSR

(in U.S. dollars unless otherwise noted)

MONTREAL, Nov. 3, 2021 /CNW/ – “Nomad was very active during the third quarter and completed an additional royalty acquisition on the Caserones mine, a long-life asset. This acquisition, coupled with mine expansions and new mines nearing construction decisions keep driving growth within our diversified portfolio of royalty and streaming assets. Subsequent to quarter-end, we announced a $95 million gold stream investment on the Greenstone Gold Project, a top-tier gold Canadian project. Above all, Nomad made a direct life-of-mine financial commitment to Greenstone Gold Mine LP to support ESG programs through a novel ESG framework” stated Vincent Metcalfe, CEO of Nomad Royalty Company Ltd. (“Nomad” or the “Company”).

Third Quarter Highlights:

  • Quarterly deliveries of 4,772 gold equivalent ounces(1) (“GEOs”) and GEOs(1) sold of 4,772
  • Gold ounces earned of 2,527 and silver ounces earned of 29,929
  • Revenues of $6.1 million
  • Net income of $0.9 million and adjusted net loss(1) of $0.9 million
  • Net income attributable to Nomad’s shareholders of $0.8 million
  • Gross profit of $2.1 million
  • Cash operating margin attributable to Nomad’s shareholders(1) of $5.1 million representing 88% of revenue attributable to Nomad’s shareholders
  • $24.6 million of cash as at September 30, 2021
  • Completed the acquisition of an additional effective 0.351% net smelter return royalty on the producing Caserones copper mine in Chile
  • Commenced trading common shares on the New York Stock Exchange under the symbol “NSR”
  • Amended the revolving credit facility increasing the amount from $50 million to $125 million with the option to increase by $25 million, the option subject to satisfaction of certain conditions
  • Declared a quarterly dividend of C$0.05 per common share for a total amount of $2.3 million paid on October 15, 2021

(1) Refer to the non-IFRS measures section of this press release.

Subsequent to Quarter-end Highlights:

  • On October 29, 2021, the Company announced it entered into a gold purchase agreement with a subsidiary of Orion Mine Finance (“Orion”) with respect to its 40% interest in Greenstone Gold Mines LP (“GGM”), the owner and operator of the Greenstone Gold project located in Ontario, Canada. Nomad will make up-front cash payments totalling $95 million for 5.938% of gold production attributed to Orion’s 40% interest in GGM until 120,333 ounces have been delivered, and 3.958% thereafter. As part of the gold stream, Nomad has made a long-term commitment to funding mine-level environmental, social and governance programs by agreeing to make payments to GGM equal to $30 per ounce of gold delivered to Nomad.

Declaration of dividends:

Nomad is also pleased to announce a quarterly dividend of C$0.05 per common share, payable on January 14, 2022 to Nomad’s shareholders of record as of the close of business on December 31, 2021.  

For beneficial shareholders residing in the United States, the dividend will be paid in U.S. dollars. The dividend has been designated by Nomad as an “eligible dividend” under the Income Tax Act (Canada).

Q3 2021:

Revenues
($000)

Gross profit
($000)

Revenues
attributable to
Nomad ($000)

Cash operating margin
attributable to
Nomad(1)
($000)

Bonikro Gold Stream

2,220

458

2,220

1,720

Mercedes Gold and Silver Stream

2,332

609

2,332

2,193

South Arturo Silver Stream

23

16

23

18

Blyvoor Gold Stream

153

94

153

103

RDM Gold Royalty

299

168

299

299

Moss Gold Royalty

116

24

116

116

Caserones Copper Royalty

982

720

663

663

Total

6,125

2,089

5,806

5,112

 

By Category

Ounces earned

Gold (in kind)

2,295

Gold (cash received)

232

2,527

Silver (in kind)

29,929

Copper (GEOs(1))

1,837

Total GEOs(1)

4,772

(1) Refer to the Non-IFRS measures section of this press release.

The table above reflects information from the Caserones Copper Royalty starting from the acquisition of control on August 31, 2021. For the period before acquisition of control, the Company estimated the gross dividend to approximate $3.1 million of which $1.7 million related to CMC’s activities for the second quarter of 2021 was received in September 2021.

Q3 2020:

Revenues
($000)

Gross profit
($000)

Revenues
attributable to
Nomad ($000)

Cash operating margin
attributable to
Nomad(1)
($000)

Premier Gold Prepay Loan

1,698

1,698

1,698

Bonikro Gold Stream

3,750

993

3,750

2,968

Mercedes Gold and Silver Stream

1,138

476

1,138

901

South Arturo Silver Stream

15

12

15

13

Woodlawn Silver Stream

187

117

187

154

RDM Gold Royalty

780

255

780

780

Total

7,568

1,853

7,568

6,514

(1) Refer to the Non-IFRS measures section of this press release.

For the third quarter of 2021, revenue attributable to Nomad was sourced 89% from gold and silver and 11% from copper. Management’s objective for the portfolio is to continue to maintain a focus on precious metals (primarily gold and silver) while seeking diversification by increasing the number of revenue sources within the portfolio. Geographically, revenue was sourced 61% from the Americas, 39% from Africa and 0% from Australia.

Asset updates and recent developments:

ROBERTSON EXTENSIONS BEGIN TO MATERIALISE AT CORTEZ

On August 9, 2021, Barrick Gold Corporation (“Barrick”) announced that a resource definition drilling is ongoing at Robertson with assays expected in the third quarter of 2021. Drilling also continues at the Porphyry target with preliminary results confirming controls to mineralization. At the Distal target, the up-dip and northerly extension of robust mineralization intersected in the prior quarter were to be drill tested during the third quarter of 2021. Sectional interpretation is ongoing between the Carlin-type Pipeline and Crossroads deposits and intrusive related mineralization at Robertson. Drilling has commenced on one framework drill hole testing for a favorable structural setting between the two deposits. The target area contains fold and thrust faulting, as well as high angle faults carrying anomalous gold and are indicative of a potential mineralized system at depth. The area has no historic deep drilling, and this hole is estimated to reach the targeted stratigraphy in the third quarter of 2021.

Potential resource expansion between resource pits to the west and at depth exist and mineralization is open to the north and to the west. A prefeasibility study is expected by the end of 2021.

CASERONES RENEWS COLLECTIVE AGREEMENTS

On September 5, 2021, Minera Lumina Copper Chile (“Lumina”) and its employees’ union conjointly announced the approval and ratification of a new collective agreement valid for 36 months. Additionally, on October 26, 2021, Lumina and its supervisors’ union reached an agreement for an early collective bargaining, the process allowed for the signing of a new collective agreement that will be in force for 36 months.

GUIDANCE REMAINS UNCHANGED AT MERCEDES

Equinox Gold Corp. (“Equinox”) commenced its 2021 exploration program at the Mercedes Mine during the second quarter of 2021 with 870 metres of core drilling completed at the Neo target (three holes). The remainder of the $1.3 million drill program will be focused on scout drilling peripheral to the Diluvio deposit.  Mercedes Mine production attributable to Equinox for 2021, following the acquisition of the asset on April 7, 2021, is estimated at 30,000 to 35,000 ounces of gold, which is unchanged from previous guidance. Cash costs are expected to decrease slightly to $750 to $800 per ounce and all-in sustaining costs to $1,150 to $1,200 per ounce.

MOSS INCREASES M&I RESOURCES BY 36%

Elevation Gold Mining Corporation (“Elevation Gold”) announced gold sales of 8,045 ounces for the second quarter of 2021. During the second quarter of 2021, the 3A Heap Leach construction project was completed. The focus during the second half of 2021 is on further debottlenecking of the crusher, which has already delivered more than a 40% reduction in unit costs year over year moving from 1/4″ to 3/8″ crush size, improving drill and blast operating procedures to improve fragmentation and throughput, improving the mine plan as they advance the infill and exploration drill program, and reducing mining and overhead costs.

On October 21, 2021, Elevation Gold announced a 36% increase to Measured and Indicated Resources at the Moss Gold Mine. Elevation Gold’s new leadership believes the Moss Gold Mine and surrounding 168 square kilometer land package possesses unrealized gold exploration potential. Consequently, Elevation Gold began an aggressive near mine and regional exploration drilling program in March 2021 to deliver new resources ounces while beginning to demonstrate the potential of the Moss Gold Mine. The new Technical Report only incorporates the results of the drilling to a May 24, 2021 cut-off. Since this cut-off date, Elevation Gold has completed approximately 100 drill holes and continues to encounter significant mineralization, which are not included in the Mineral Resource and Mineral Reserve estimates presented in this new Technical Report.

TROILUS RECEIVES STRATEGIC INVESTMENT FROM GOVERNMENT OF QUÉBEC AND FTQ

On July 15, 2021, Troilus Gold Corp. (“Troilus”) announced an initial investment of CA$11.5 million, by Investissement Québec and Fonds de solidarité FTQ. More importantly, Troilus and its strategic Québec-based institutional shareholders have defined a long-term strategic framework focused on defining and establishing full project financing options for the development of the Troilus Gold Project as it moves through feasibility. On the exploration front, on October 19, 2021, Troilus announced the extension of the strike length of the Southwest Zone by about 25% to over 1.85 kilometers and 350 metres beyond known mineralization. Of note, Troilus intercepted 1.20 g/t gold equivalent over 19 metres and within 100 metres from surface.

RDM INCREASES PRODUCTION GUIDANCE

As per Equinox disclosure, the RDM Gold Mine production for 2021 was increased to 60,000 to 65,000 ounces of gold, reflecting a strong performance in the first half of 2021. During the second quarter of 2021, the RDM Gold Mine produced 14,089 ounces and sold 13,764 ounces of gold. In the second quarter of 2021, despite lingering effects from heavy rainfall early in the quarter, the RDM Gold Mine mined 19% more ore than the previous quarter, at similar grades. However, ore grade processed from the stockpile was 25% lower than the first quarter of 2021, resulting in a lower overall grade for the second quarter. Non-sustaining capital has been reduced to $25 million and relates entirely to capitalized stripping for a major expansion pushback of the open pit that will provide improved access to the ore body in future years, with $15 million spent in the first half of 2021. During the second quarter of 2021 the RDM Gold Mine had no lost-time injuries.

BLACKWATER COMPLETES FEASIBILITY STUDY

On September 13, 2021, Artemis Gold Inc. (“Artemis Gold”) announced the results of its feasibility study (“FS”) for the Blackwater Gold Project. The results reflected several positive changes in the approach to the planned development of the Blackwater Gold Project. Phase 1 throughput has been expanded with a larger crushing circuit, providing greater operational throughput upside potential in the early years. Given the greatly reduced footprint of the Stage 1 facility, and the installation of a higher-capacity gyratory crusher in the proposed Stage 1 development, this will allow for a streamlined and construction-ready approach to the Phase 2 Expansion throughput of 12Mtpa. Increased up-front investments will also reduce expansion capital. The FS also highlights accelerated Phase 2 and Phase 3 expansions. Artemis Gold also included an initial investment to replace diesel and propane-powered components within the process plant facility to reduce the carbon footprint of the Blackwater Gold Project, which will support its ESG goals. The net result of the FS is an after-tax net present value at a 5% discount rate of CA$2.15 billion, an after-tax Internal rate of return of 32%, and an after-tax payback period of 2.3 years. Artemis Gold is targeting the second quarter of 2022 for the start of the Blackwater Construction.

Share Capital:

On September 30, 2021 there were 56,657,437 common shares of Nomad outstanding. As at November 3, 2021, the Company had 56,657,437 common shares, 1,407,972 share options and 24,881,654 common share purchase warrants outstanding entitling the holders to purchase 2,488,166 common shares. The Company also had 209,879 restricted share units, 78,500 performance share units and 140,980 deferred share units outstanding. Pursuant to the deferred payment payable to Yamana Gold Inc. and based on the C$/US$ daily exchange rate published by the Bank of Canada on November 2, 2021, 1,378,208 common shares would be issuable should the conversion option be exercised on such date.

Non-IFRS Measures:

Nomad has included certain performance measures in this press release that do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) including gold equivalent ounces, gold ounces and gold equivalent ounces earned and sold attributable to Nomad, adjusted net income, cash operating margin, cash operating margin attribuable to Nomad’s shareholders, cash costs, cash costs per gold ounce sold and cash costs per silver ounce sold.

In addition to the non-IFRS performance measures described below, the Company’s royalty and stream revenues are converted to GEOs by dividing revenues for a specific period by the average realized gold price per ounce for the gold stream revenues and by dividing revenues by the average gold price for the gold royalty revenues, for the respective period. Silver earned from royalty and stream agreements are converted to gold equivalent ounces by multiplying the silver ounces by the average silver price for the period and dividing by the average gold price for the period. The Company’s gross amount received or receivable from the Caserones copper royalty is converted to gold equivalent ounces by dividing the dividend received or receivable before taxes for a specific period by the average gold price, for the respective period.

Adjusted net income and adjusted net income per share are calculated by removing the effects of the non-cash cost of sales related to the gold prepay loan, the non-cash change in fair value of the conversion option for the Deferred Payment to the Yamana Gold Inc. and the non-cash change in fair value of gold prepay loan and the deferred income tax recovery related to stream interests subject to the RTO Transaction. The Company believes that, in addition to measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company’s performance.

Cash operating margin is calculated by subtracting the average cash cost of gold and silver on a per ounce basis from the average realized selling price of gold and silver on a per ounce basis. The Company presents cash operating margin as management and certain investors use this information to evaluate the Company’s performance in comparison to other streaming and royalty companies who present results on a similar basis as well as to evaluate the Company’s ability to generate cash flow.

Average cash cost of gold and silver on a per ounce basis is calculated by dividing the total cost of sales, less depletion and non-cash costs of sales related to the gold prepay loan, by the ounces sold. In addition to measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company’s performance and ability to generate cash flow in comparison with other streaming and royalty companies in the precious metals mining industry who present similar measures of performance.

These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and other companies may calculate these measures differently. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Refer to the Non-IFRS and Other Measures section of the Company’s Management Discussion and Analysis for the three and nine months ended September 30, 2021.

QUALIFIED PERSON

Vincent Cardin-Tremblay, P. Geo., Vice President, Geology of Nomad Royalty is the “Qualified Person” as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects who has reviewed and approved the technical content of this news release.

ABOUT NOMAD

Nomad Royalty Company Ltd. is a gold & silver royalty company that purchases rights to a percentage of the gold or silver produced from a mine, for the life of the mine. Nomad owns a portfolio of 15 royalty and stream assets, of which 8 are on currently producing mines. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold & silver streams and royalties. For more information please visit: www.nomadroyalty.com.

Nomad Royalty Company Ltd.
500-1275 ave. des Canadiens-de-Montréal
Montreal, Québec H3B 0G4
nomadroyalty.com

FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release may be deemed “forward-looking statements”. All statements in this release, other than statements of historical fact, that address events or developments that Nomad expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential”, “scheduled” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Forward-looking statements in this press release include statements with respect to the amount of dividend to be received by the Company from CMC. Although Nomad believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include the impossibility to acquire royalties, streams and to fund precious metal streams, gold prices, Nomad’s royalty and stream interests, access to skilled consultants, results of mining operations, exploration and development activities for properties with respect to which Nomad holds a royalty or stream, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment, timeliness of government or court approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations, market prices, continued availability of capital and financing and general economic, market or business conditions. Nomad cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the forward looking statements contained herein should carefully consider the above factors as well as the uncertainties they represent and the risks they entail. Nomad believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. Nomad undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.

Nomad Royalty Company Ltd.
Consolidated balance sheets (unaudited)
(tabular amounts expressed in thousands of United States dollars)

September 30, 2021

December 31, 2020

$

$

Assets

Current assets

Cash

24,621

22,517

Amounts receivable

5,239

1,349

Gold prepay loan

6,920

Other assets

3,472

1,023

Total current assets

33,332

31,809

Non-current assets

Gold prepay loan

8,237

Royalty, stream and other interests

282,683

207,923

Deferred income taxes

42,643

42,059

Total non-current assets

325,326

258,219

Total assets

358,658

290,028

Liabilities

Current liabilities

Accounts payable and accrued liabilities

4,662

4,391

Deferred payment liability – host contract

9,537

Deferred payment liability – conversion option

440

Total current liabilities

14,639

4,391

Non-current liabilities

Deferred payment liability – host contract

9,046

Deferred payment liability – conversion option

3,013

Revolving credit facility

50,000

Total non-current liabilities

50,000

12,059

Total liabilities

64,639

16,450

Equity

Common shares

255,135

254,210

Warrants

3,156

2,838

Contributed surplus

4,343

3,091

Retained earnings

7,523

13,439

Equity attributable to Nomad Royalty Company Ltd’s shareholders

270,157

273,578

Non-controlling interests

23,862

Total equity

294,019

273,578

Total liabilities and equity

358,658

290,028

Nomad Royalty Company Ltd.
Consolidated statements of income (loss) and comprehensive income (loss) (unaudited)
(tabular amounts expressed in thousands of United States dollars, except per share amounts)

Three months ended

Nine months ended

September
30, 2021

September
30, 2020

September
30, 2021

September
30, 2020

$

$

$

$

Revenue

Gold and silver sales

4,728

6,788

18,258

18,775

Other revenue

1,397

780

2,111

1,207

Total revenue

6,125

7,568

20,369

19,982

Cost of sales

Purchased cost of gold and silver

694

2,753

4,546

11,732

Depletion of royalty, stream and other interests

3,342

2,962

9,608

5,440

Total costs of sales

4,036

5,715

14,154

17,172

Gross profit

2,089

1,853

6,215

2,810

Other operating expenses (income)

General and administrative expenses

1,384

343

3,701

1,550

Project evaluation expenses

2

371

57

Share-based compensation

614

818

1,785

2,162

Change in fair value of gold prepay loan

(1,392)

690

(4,967)

Share of income of associate

(320)

(373)

Listing expenses

23,492

Total other operating expenses (income)

1,678

(229)

6,174

22,294

Operating income (loss)

411

2,082

41

(19,484)

Other income (expenses)

Change in fair value of conversion option

1,459

(3,075)

2,573

(8,059)

Finance costs

(734)

(308)

(1,650)

(392)

Foreign exchange income (loss)

(139)

102

(73)

(54)

Total other income (expenses)

586

(3,281)

850

(8,505)

Income (loss) before income taxes

997

(1,199)

891

(27,989)

Income tax recovery (expense)

(68)

1,725

40

36,836

Net income and comprehensive income

929

526

931

8,847

Net income and comprehensive income attributable to:

Nomad Royalty Company Ltd’s shareholders

824

526

826

8,847

Non-controlling interests

105

105

Net income per share

Basic

0.01

0.01

0.01

0.21

Diluted

0.01

0.01

0.01

0.21

Nomad Royalty Company Ltd.
Consolidated statements of cash flows (unaudited)
(tabular amounts expressed in thousands of United States dollars)

Three months ended

Nine months ended

September
30, 2021

September
30, 2020

September
30, 2021

September
30, 2020

$

$

$

$

Operating activities

Net income for the period

929

526

931

8,847

Adjustments for:

Cost of sales related to gold prepay loan

1,698

1,522

9,972

Depletion of royalty, stream and other interests

3,342

2,962

9,608

5,440

Share-based compensation

614

818

1,785

2,162

Listing expense

22,390

Change in fair value of gold prepay loan

(1,392)

690

(4,967)

Change in fair value of conversion option

(1,459)

3,075

(2,573)

8,059

Share of income of associate, net of dividends received

40

(14)

Deferred income tax recovery

(327)

(1,915)

(584)

(37,026)

Finance costs

263

188

762

244

Interest received

259

210

871

Changes in other assets and liabilities

Amounts receivable

(1,026)

(657)

(288)

(679)

Other assets

(1,476)

(370)

(1,701)

(540)

Accounts payable and accrued liabilities

(408)

51

(1,113)

847

Cash provided by operating activities

492

5,243

9,235

15,620

Investing activities

Cash acquired

2,311

2,311

3,149

Acquisition of gold prepay loan

(15,500)

Acquisition of royalty, stream and other interests

(27,259)

(1,940)

(28,453)

(11,940)

Acquisition of investment in associate

(89)

(23,176)

Cash used in investing activities

(25,037)

(1,940)

(49,318)

(24,291)

Financing activities

Proceeds on issuance of common shares

9,652

Revolving credit facility drawn

27,000

50,000

Share and warrant issue expenses

(100)

(15)

(714)

Exercise of share options

3

Financing fees

(959)

(414)

(1,043)

(414)

Dividends paid

(2,285)

(6,758)

Net parent investment

15,175

Net cash provided by (used in) financing activities

23,756

(514)

42,187

23,699

Net increase (decrease) in cash

(789)

2,789

2,104

15,028

Cash at beginning of period

25,410

12,239

22,517

Cash at end of period

24,621

15,028

24,621

15,028

 

SOURCE Nomad Royalty Company Ltd.

Nomad Royalty Company Reports Q3 Results, Provides Asset Updates and Declares Fourth Quarter 2021 Dividend WeeklyReviewer

PR Newswire Business News

Earnings Disclosure

WeeklyReviewer earns primarily through affiliates and ads. We don’t encourage anyone to click on ads for any other purpose but your own. We recommend products and services often for our readers, and through many we will earn commissions through affiliate programs.

WeeklyReviewer earns commissions through affiliates of qualifying products through Amazon Associates, Fiverr Affiliates, Hostgator Affiliates, Namecheap Affiliates, NordVPN Affiliates, Semrush Affiliates, Alibaba Affiliates, Clickfunnels Affiliate, Leadpages Affiliates, Cryptohopper Affiliates, Binance Affiliates and more.

Clicking on links in WeeklyReviewer may or may not provide us commission through any qualifying purchases.

Avatar of World Reviewer Staff
World Reviewer Staffhttps://weeklyreviewer.com/
The first logical thought has to be "no way". I'm the World Observer! Ill find and share important news all day.

Latest articles

Related articles

WeeklyReviewer