Mr. Vincent Metcalfe reports
NOMAD ROYALTY COMPANY REPORTS Q3 RESULTS AND DECLARES FOURTH QUARTER 2020 DIVIDENDS
Vincent Metcalfe, chief executive officer and chair of the board of directors of Nomad, stated: "We had a strong third quarter with record revenue of $7.6-million. Importantly, revenue from our streams and royalties were $5.9-million, representing an increase of 100 per cent quarter over quarter and demonstrating the strength of Nomad's diversified portfolio. Given our strong free cash flow outlook, during the third quarter we were pleased to announce our inaugural dividend policy. The strong gold environment will allow us to continue to generate strong free cash flow while reinvesting in new opportunities that will support further growth and returns to shareholders."
(All figures are in United States dollars unless otherwise noted.)
Third quarter highlights:
Gold ounces earned of 3,100 (2,450 for Q3 2019);
Silver ounces earned of 52,616 (35,587 for Q3 2019);
- Revenues of $7.6-million ($4.3-million for Q3 2019);
- Net income of $500,000 ($400,000 for Q3 2019);
- Adjusted net income of $2.0-million ($3.1-million for Q3 2019);
- Gross profit of $1.9-million ($100,000 for Q3 2019);
- Cash operating margin of $6.5-million ($4.2-million for Q3 2019);
- Cash operating margin of 86 per cent (97 per cent for Q3 2019);
$15.0-million of cash as at Sept. 30, 2020;
- Announced and declared first dividend payment of $2.0-million.
Declaration of dividends
Nomad is also pleased to announce the second quarterly dividend of 0.5 cent per common share, payable on Jan. 15, 2021, to Nomad's shareholders of record as of the close of business on Dec. 31, 2020.
For shareholders residing in the United States, the dividend will be paid in U.S. dollars based on the daily exchange rate published by the Bank of Canada on Dec. 31, 2020. The dividend has been designated by Nomad as an eligible dividend under the Income Tax Act (Canada).
For the third quarter revenue was sourced 100 per cent from gold and silver. Management's objective for the portfolio is to maintain a focus on precious metals (primarily gold and silver) with a target of no more than 10 per cent in revenue from other commodities. Geographically, revenue was sourced 48 per cent from the Americas, 50 per cent from Africa and 2 per cent from Australia.
Trading on OTCQX: On July 13, 2020, Nomad qualified and started to trade on the OTCQX Best Market under the ticker NSRXF.
Troilus royalty interest: On July 31, 2020, Nomad closed the acquisition of a 1-per-cent net smelter return (NSR) royalty on the Troilus gold project located in the Frotet-Evans greenstone belt in the province of Quebec for cash consideration of $1.9-million and the issuance of 5,769,231 units.
Secured credit facility: On Aug. 17, 2020, Nomad closed a revolving credit facility agreement with a syndicate of banks for $50-million with the option to increase to $75-million.
Coral Gold acquisition: On Aug. 23, 2020, Nomad entered into a definitive arrangement agreement, under which Nomad intends to acquire all of the outstanding common shares of Coral pursuant to a statutory plan of arrangement pursuant to the Business Corporations Act (British Columbia) for total value of approximately $45.8-million. Coral owns a 1.00-per-cent to 2.25-per-cent sliding scale NSR royalty on the Robertson deposit which is part of the Cortez gold complex located in Nevada and operated by the Nevada Gold Mines partnership. The transaction is expected to close in November, 2020, subject to the approval of at least two-thirds of Coral's shareholders and a simple majority of minority shareholders, the court, and Toronto Stock Exchange approvals and other conditions.
Dividend policy unveiled: On Aug. 26, 2020, Nomad unveiled its dividend policy and declared its inaugural quarterly dividend which was paid on Oct. 15, 2020. Nomad adopted an annual dividend policy of two cents per share, payable quarterly.
Appointment of Susan Kudzman: On Aug. 31, 2020, Nomad was pleased to announce that it had appointed Ms. Kudzman, a specialist in risk management and an actuary, to its board of directors.
Moss royalty interest: On Sept. 28, 2020, Nomad closed the acquisition of all the of the outstanding shares of Valkyrie Royalty Inc., a private royalty company that owned an NSR royalty on the Moss gold mine located in Arizona, United States, for total share consideration of approximately $8.9-million.
Base shelf prospectus: On Sept. 30, 2020, Nomad filed a short-form base shelf prospectus for a maximum of $300-million of securities offering in the next 25 months.
Moss gold royalty: Northern Vertex announced record production of 14,673 gold equivalent ounces and record revenues of $27-million for the three months ended Sept. 30, 2020. In the last six months, gold production at the Moss gold mine has consistently increased month over month. Northern Vertex is executing an aggressive 60,000-foot exploration campaign, with the aim to both unlock the high-grade Ruth vein and add significant ounces that can be exploited from the current mining operations. Additionally, Northern Vertex is running a 45,000-ton bulk sample to assess the opportunity to dramatically expand throughput and drive down operating costs by transitioning from one-quarter-inch crush to three-eights-inch crush. (For further information on the Moss gold mine operations, refer to Northern Vertex's press release dated Oct. 7, 2020, available on Northern Vertex's SEDAR profile.)
RDM gold royalty: Equinox Gold Corp. sold 19,018 ounces of gold and realized revenue of $32.5-million for the three months ended June 30, 2020. Grades and mining performance were better than planned for June, 2020, as the operator-mined alternative areas with shorter hauls while awaiting a pit extension permit. Average annual life of mine production at RDM is estimated to be approximately 80,000 ounces of gold per year over the remaining seven-year mine life.
Mercedes silver stream: Following the pandemic-related suspension of the Mercedes mine operations, Premier Gold announced that ore production and processing resumed in July, 2020, with 12,183 ounces of gold and 49,985 ounces of silver produced for the three months ended Sept. 30, 2020. A new simplified operating plan with a more focused mining and development strategy has enhanced productivity, reduced costs and is ensuring Mercedes mine's ability to reliably deliver free cash flow. This optimized plan has consolidated production to one mine portal from five, reduced the mining rate to a target of 1,200 tonnes per day from 2,000 tonnes, and now operates the processing plant on a campaign basis in alignment with the plan and crew rotations. The success of future exploration and delineation drill programs is expected to allow the production rate to eventually return to the plant's nameplate capacity.
South Arturo silver stream: Barrick Gold, through its subsidiary Nevada Gold Mines, produced 17,740 gold ounces (7,096 gold ounces reflecting Premier Gold's 40-per-cent interest), from more than 650 tonnes of ore per day at the high-grade underground operation. Expansion drill results from the El Nino underground program were announced with highlight results of 39.6 metres of 17.11 grams per tonne Au, including 21.3 m of 24.75 g/t Au (SER20019) and 100.6 m of 5.73 g/t Au, including 13.7 m of 8.52 g/t Au (SER20018). Additional development opportunities are being advanced, including the phase 1 and phase 3 open-pit projects, and the assessment of the potential for an on-site heap leach facility. Surface drilling in the vicinity of these pits commenced during the third quarter of 2020. A prefeasibility study for the South Arturo mine is currently being completed (for further information on the Mercedes mine and South Arturo mine operations, refer to Premier Gold's press release dated Oct. 14, 2020, available on Premier Gold's SEDAR profile).
Bonikro gold stream: Allied Gold has informed the company that it has been producing from the Akissi-So, Chapelle and Chapelle West extension pits. During the month of September, 2020, six Caterpillar 777 haul trucks were fully commissioned.
Troilus Gold royalty: Troilus Gold filed a preliminary economic assessment (PEA) on the Troilus gold project on Oct. 14, 2020. The PEA supports a combined open-pit and underground mining scenario with low initial capital costs and high rate of return for a 35,000-tonne-per-day operation over a 22-year mine life with projected gold production of 220,000 ounces average per year for the first five years and 246,000 ounces average per year for the first 14 years. (For further information, refer to Troilus Gold's NI 43-101 technical report dated Oct. 14, 2020, with an effective date of Aug. 31, 2020, available on Troilus Gold's SEDAR profile).
Gualcamayo gold royalty: Mineros S.A. has informed the company that it is investing $8-million annually in near-mine exploration and infill drilling to increase mine life. Only 20 per cent of the 20,000-hectare land package has been explored.
Woodlawn silver stream: As a result of the suspension of the operations at the Woodlawn mine, Heron Resources was in default under its credit facilities and the Woodlawn silver stream agreement and Heron Resources sought, and received, waivers from its senior creditors, including from the company, of these default events. On Aug. 14, 2020, Heron Resources announced the commencement of a strategic process in relation to its Woodlawn mine and the appointment of Azure Capital as financial adviser to that process. Azure Capital will have a broad mandate to explore various options for the Woodlawn mine including refinancing, joint ventures, and partial or complete divestment. In support of this process, Heron Resources has received a further 12-month extension of the senior facility waivers, including from the company under the Woodlawn silver stream agreement, until Aug. 13, 2021. The Woodlawn mine will remain on care and maintenance until such time as the strategic process terminates or as otherwise agreed between Heron Resources and its stakeholders, including the company.
Blyvoor Gold stream: Blyvoor Gold informed the company that in response to COVID-19, strict health and safety measures were implemented. Following the visit of the Department of Minerals Resources and Energy relating to the inspection of the No. 5 subvertical shaft in September, 2020, Blyvoor Gold received its final licence which will allow them to access the deeper mining levels. Blyvoor Gold is now fully permitted. Blyvoor Gold expects to complete the plant construction and to commence processing operations in the fourth quarter of 2020. Mining operations have commenced on the upper levels and ore is currently hauled to surface.
Sustainability program: third party mine operators
Nomad is committed to realizing meaningful and long-term benefits for all stakeholders. Nomad's royalty and streaming agreements are held with third party mine operators located around the world. Several of the company's partners publish annual sustainability reports outlining their sustainability and environment, social and governance (ESG) related targets and progress.
On Oct. 19, 2020, Troilus Gold announced that it is the recipient of the "Excellence in Sustainable Development" award presented annually by the Quebec Mineral Exploration Association (AEMQ), for the advancement of its 100-per-cent-owned Troilus gold project, located northeast of Chibougamau, Que., within the Frotet-Evans greenstone belt. The Excellence in Sustainable Development is awarded to a company that has exhibited high standards in sustainable development during the year. In 2020 Troilus Gold also became the first Quebec mineral exploration company to obtain UL 2723: ECOLOGO Certification Program for Mineral Exploration Companies, a new third party standard launched by AEMQ in November, 2019, to validate, recognize and promote environmental, social and economic best practices.
On Aug. 31, 2020, Mineros S.A. announced that two subsidiaries of Mineros Group became the second organization in the mining sector in Colombia, to amend their bylaws in order to implement a transformation process into Companies of Collective Benefit and Interest. The commitments acquired are framed within five areas: business model, corporate governance, work, environmental and community practices. Within the conception of its corporate model, Mineros shall look after local contracting, helping alleviate poverty of the communities and encouraging vendors to generate practices aiming to comply with these purposes, becoming replicators of this experience. Mineros stated that also included in the model is the promotion of participation opportunities which highlight aspects such as inclusion, diversity and equity, as well as training, and physical and mental well-being programs. Environmental initiatives shall be framed by the dissemination of results, audits and programs which promote a positive impact on the environment, incentivizing the use of sustainable tools as alternatives for the daily work. Likewise, making an impact on the community based on support given to social works and working opportunities for vulnerable populations.
On Sept. 16, 2020, Northern Vertex announced the completion of its 6.9-mile electrical power line project, which reduces electrical costs and has significant environmental benefits by switching from diesel generators to grid power.
About Nomad Royalty Company Ltd.
Nomad Royalty Company is a gold and 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 12 royalty, stream and gold loan assets, of which six 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 and silver streams and royalties.
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