18:04:20 EDT Fri 18 Jun 2021
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Nomad Royalty Company Ltd
Symbol NSR
Shares Issued 566,231,380
Close 2021-02-17 C$ 1.10
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Nomad Royalty earns $20.11-million (U.S.) in 2020

2021-02-18 08:21 ET - News Release

Mr. Vincent Metcalfe reports


Vincent Metcalfe, chief executive officer and chair of the board of directors of Nomad Royalty Company Ltd., stated: "Nomad had a strong fourth quarter with revenue of $6.8-million as the portfolio continued to demonstrate its strength and reliability. As for the year 2020, Nomad was successful in launching and establishing a strong platform, while executing on the business plan of becoming a significant player in the sector. For 2021, Nomad expects organic portfolio growth which will allow it to continue to generate strong free cash flow while reinvesting in new opportunities that will support further growth and returns to shareholders."

All amounts are unaudited and in U.S. dollars unless otherwise noted.

Fourth quarter highlights and annual results:

  • Gold ounces earned of 2,746 for Q4 2020 (2,450 for Q4 2019) and 11,475 for the year 2020 (9,800 for 2019);
  • Silver ounces earned of 64,568 for Q4 2020 (138,209 for Q4 2019) and 217,401 for the year 2020 (292,861 for 2019);
  • Gold equivalent ounces (GEOs) sold of 3,587 for Q4 2020 (3,084 for Q4 2019) and 14,870 for the year 2020 (12,233 for 2019);
  • Revenues of $6.8-million for Q4 2020 ($4.6-million for Q4 2019) and $26.8-million for the year 2020 ($17.4-million for 2019);
  • Net income of $11.3-million for Q4 2020 ($1.5-million for Q4 2019) and $20.1-million for the year 2020 ($2.0-million for 2019);
  • Adjusted net income of $1.3-million for Q4 2020 ($3.2-million for Q4 2019) and $9.7million for the year 2020 ($11.7-million for 2019);
  • Gross profit of $1.7-million for Q4 2020 ($50,000 for Q4 2019) and $4.5-million for the year 2020 ($100,000 for 2019);
  • Cash operating margin of $5.9-million for Q4 2020 ($4.4-million for Q4 2019) and $24.1-million for the year 2020 ($16.7-million for 2019). Including cash received at the closing of the reverse takeover transaction, the cash operating margin attributable to Nomad amounts to $27.2-million for the year 2020;
  • Cash operating margin of 86 per cent for Q4 2020 (96 per cent for Q4 2019) and 90 per cent for the year 2020 (96 per cent for 2019);
  • $22.5-million of cash as at Dec. 31, 2020;
  • Completed the acquisition of Coral Gold Resources Ltd., owner of a sliding-scale 1-per-cent to 2.25-per-cent net smelter return (NSR) royalty on Nevada Gold Mines' Robertson property located in Nevada, for cash consideration of $1.9-million and the issuance of 39,994,252 units of Nomad, each such unit comprising one common share and one-half of a common share purchase warrant of the company;
  • Completed the acquisition of a 0.21-per-cent NSR royalty on the Blackwater gold project located in British Columbia, Canada, for a total of $1.8-million cash consideration and the issuance of 1,583,710 common shares of the company. Cash consideration of $900,000 was paid and 791,854 common shares were issued in 2020;
  • Completed a secondary offering by Yamana Gold Inc. of 22.75 million common shares of Nomad;
  • Declared a second quarterly dividend of $2.2-million;
  • Joined the United Nations Global Compact committed to voluntarily aligning its operations and strategy with the 10 universally accepted principles in the areas of human rights, labour, environment and anti-corruption. Nomad's short-term focus will be on four sustainable development goals: quality education, gender equality, clean water, and sanitation and climate action.

                              Q4 2020
By category            Ounces earned   Ounces sold   Revenues ($000)

Gold (in kind)                 2,424         2,424           $4,548          
Cash received (gold)             322           322              604            
                               2,746         2,746            5,152          
Silver (in kind)              64,568        64,568            1,632          
Total GEOs                     3,587         3,587            6,784          


                                               Q4 2020

                                             GEOs    GEOs   Revenues     costs (1)     Cash operating
                                           earned    sold      ($000)   ($000s)      margin (1) ($000)

Premier gold prepay loan                      900    $900     $1,697        $-                 $1,697
Bonikro gold stream                         1,524   1,524      2,851       609                  2,242
Mercedes and South Arturo silver streams      841     841      1,632       321                  1,311
RDM gold royalty                              211     211        396         -                    396  
Moss gold royalty                             111     111        208         -                    208  
Total                                       3,587   3,587      6,784       930                  5,854


                              YEAR 2020
By category            Ounces earned   Ounces sold   Revenues ($000)

Gold (in kind)                10,422        10,422          $18,718         
Cash received (gold)           1,053         1,053            1,811          
                              11,475        11,475           20,529         
Silver (in kind)             217,401       301,384            6,237          
Total GEOs                    13,973        14,870           26,766         


                                               YEAR 2020

                                             GEOs     GEOs   Revenues     costs (1)     Cash operating
                                           earned     sold      ($000)   ($000s)      margin (1) ($000)

Premier gold prepay loan                    6,700    6,700     11,689         -                $11,689
Bonikro gold stream -- cash settled           322      322        425         -                    425   
Bonikro gold stream -- in-kind delivery     3,722    3,722      7,029     1,489                  5,541 
Mercedes and South Arturo silver streams    1,823    2,720      5,083       975                  4,107 
Woodlawn silver stream                        675      675      1,154       226                    928   
RDM gold royalty                              620      620      1,178         -                  1,178 
Moss gold royalty                             111      111        208         -                    208   
Total                                      13,973   14,870     26,766     2,690                 24,076

For the fourth quarter and for the year ended Dec. 31, 2020, 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 58 per cent (68 per cent for the year 2020) from the Americas, 42 per cent (28 per cent for the year 2020) from Africa and 0 per cent (4 per cent for the year 2020) from Australia.

Asset update

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 it to access the deeper mining levels. Blyvoor Gold is now fully permitted and expects to complete the plant construction and to commence processing operations in the first quarter of 2021. Mining operations have commenced on the upper levels and ore is currently hauled to surface. Blyvoor Gold continues to ramp up mining operations in the mine. Blasting activities are now fully operational and taking place daily. The process plant construction is complete and ore processing has commenced. A technical report in connection with the Blyvoor Gold mine mineral resource is expected to be completed in the first quarter of 2021.

Bonikro gold stream

Allied Gold has informed the company that it has been producing from the Akissi-So, Chapelle and Chapelle West extension pits.

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, thus ensuring the mine's ability to reliably deliver free cash flow. This optimized plan has consolidated production to one mine portal from five and reduced the mining rate to a target of 1,200 tonnes per day from 2,000 tonnes. Premier Gold 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.

On Dec. 16, 2020, Equinox Gold Corp. announced the friendly acquisition of Premier Gold. Equinox will become the operator of the Mercedes mine and has indicated that there is expansion potential to increase production to 80,000 to 90,000 ounces of gold annually. Equinox operates seven mines globally, is very well capitalized and is led by a reputable management team with the ability to drive further productivity increases at the mine site.

South Arturo silver stream

Nevada Gold Mines had another exceptional year with production exceeding budget by over 30 per cent. The strong performance was driven by higher production rates that averaged 694 tonnes per day processed. On Jan. 19, 2021, Premier published a preliminary feasibility study on South Arturo which outlined an eight-year mine life and was based on a mineral resource estimate as at Dec. 1, 2020, which included Nomad attributable reserves of 1.9 million ounces of silver (3.8 million t at 15.23 g/t), measured and indicated resources of 4.0 million ounces of silver (20.0 million t at 6.19 g/t), and an inferred mineral resource of 1.8 million ounces of silver (10.1 million t at 5.47 g/t). In 2020, drill programs were completed at El Nino, with initial results suggesting the potential to expand underground resources and extend the mine life. A new mineral resource estimate will be completed in 2021 following receipt of all 2020 drilling results.

Woodlawn silver stream

The operations at the Woodlawn mine were suspended and the project has been put into care and maintenance (C&M) as of March 24, 2020, in response to a number of factors, including the COVID-19 pandemic, its impact on global demand for commodities, the price of zinc and the extraordinary travel restrictions imposed by the Australian federal and state governments. As a result of the suspension of the operations at the Woodlawn mine, Heron Resources sought, and received, waivers from its senior creditors, including from the company, of certain covenants in respect of its principal credit agreement. 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 with such strategic 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.

On Jan. 28, 2021, Heron Resources announced that the Woodlawn mine site remains on C&M, with current activities focused on preserving mining and processing infrastructure for future restart, along with environmental management of the site. During the fourth quarter of 2020, optimization studies and key work programs targeting value-added opportunities at Woodlawn were progressed or completed. Following the appointment of an adviser to explore strategic options for Woodlawn including refinancing, joint ventures and partial or complete divestment, a full data room was established to support interested parties currently reviewing the project under confidentiality agreement. Under the current timetable for the strategic process, initial indicative non-binding proposals are expected to be received during the first quarter of 2021.

Blackwater gold royalty

On Feb. 10, 2021, Artemis Gold submitted applications to the government of British Columbia to undertake an early works construction program in respect of its Blackwater gold project in British Columbia, Canada. The construction program is designed to focus on clearing of key infrastructure areas including haul roads, the Stage 1 tailing storage facility and camp areas. In addition, construction of the mine access road and plant-site bulk earthworks will be fast-tracked to facilitate early mobilization of the engineering, procurement and construction contractor to site upon receipt of major works permits. The permitting process in respect of the construction program is expected to take several months with approvals anticipated in late Q2 2021.

Gualcamayo gold royalty

Mineros SA 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.

Moss gold royalty

Northern Vertex is conducting an aggressive exploration program with three drill rigs on site to expand the resource with the aim at extending the mine life and testing district-scale targets. Recent results intersected high grades at the Ruth vein target, widespread mineralization within the Gold Bridge and West Extension targets located 1.5 kilometres west of the pit, and similar Moss pit mineralization at the West target. The phase II drilling program was initiated in November, 2020, and will extend to February, 2021. Phase II will focus on the high-grade Ruth vein target, resource infill at Gold Bridge, and target new discoveries within extensive stockwork gold and silver mineralization both on strike and at depth at the Moss mine. The combined phase I and II drilling programs will total 32,000 metres. In addition to the multiphased exploration program, Northern Vertex continued to successfully implement a number of new initiatives to further optimize operations and reduce costs at the Moss mine.

RDM gold royalty

On Feb. 9, 2021, Equinox announced an investment of $35-million in growth capital relating entirely to capitalized stripping for a pushback of the open pit, providing lower strip access to the orebody in future years. As per Equinox disclosure, the RDM gold mine production for 2021 is estimated at 55,000 to 60,000 ounces of gold with cash costs of $1,000 to $1,050 per ounce and all-in sustaining costs (AISC) of $1,175 to $1,225 per ounce. AISC at the RDM gold mine in 2021 includes $10-million of sustaining capital of which $6-million relates to increasing capacity of the tailings storage facility, with $2-million for equipment and $2-million for buildings and infrastructure.

Robertson gold royalty

On Nov. 20, 2020, Barrick Gold Corp. announced during its investor day presentation that the Robertson property was now included within the five-year plan at Cortez, with first production expected in 2025. As per current guidance, Cortez is forecasted to produce 750,000 to 850,000 ounces annually from 2021 to 2025. Additionally, on the exploration front, Barrick will be conducting drilling programs at the Robertson property and initiate earlier stage generative exploration work on the Pipeline-Robertson corridor.

Troilus gold royalty

In early 2021, Troilus reported positive results on the Southwest zone, including a 200-metre step-out hole which intersected high-grade gold-bearing mineralization between 50 m and 450 m from surface, and located outside of the National Instrument 43-101 mineral resource envelope and the open pit proposed in the August, 2020, PEA. For winter 2021, Troilus is implementing a 7,000-metre-per-month drilling program with the objective of expanding the mineral resource estimate at the Southwest zone, definition drilling in the Z87 and J zone, and geotechnical drilling in support of the prefeasibility study. A prefeasibility study is expected to be published later in 2021 and an environmental impact study targeted for early 2022.

Share capital

On Dec. 31, 2020, there were 565,429,124 common shares of Nomad outstanding. As at Feb. 16, 2021, the company had 566,231,380 common shares, 10,120,600 share options and 2,884,616 common share purchase warrants outstanding. The company also had 1,312,900 restricted share units and 673,800 deferred share units outstanding. Pursuant to the deferred payment payable to the Yamana Group and based on the Canadian/U.S.-dollar exchange rate as at Feb. 16, 2021, 14,084,507 common shares would be issuable should the conversion option be exercised on such date.

About Nomad Royalty Company Ltd.

Nomad Royalty 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 14 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.

                      (in thousands of United States dollars, except per-share amounts)
                                                             Three months ended                    Year ended
                                                                        Dec. 31,                      Dec. 31,
                                                            2020           2019           2020           2019
Gold and silver sales                                     $6,180         $4,613        $24,955        $17,377
Other revenue                                                604              -          1,811              -
Total revenue                                              6,784          4,613         26,766         17,377
Cost of sales
Purchased cost of gold and silver                          2,632          3,920         14,364         14,670
Depletion of royalty, stream and other interests           2,429            645          7,869          2,591
Total costs of sales                                       5,061          4,565         22,233         17,261
Gross profit                                               1,723             48          4,533            116
Other operating expenses (income)
General and administrative expenses                        1,101            610          2,708          2,448
Share-based compensation                                     580              -          2,742              -
Change in fair value of gold prepay loan                    (487)        (2,023)        (5,454)        (4,290)
Listing expenses                                               -              -         23,492              -
Total other operating expenses (income)                    1,194         (1,413)        23,488         (1,842)
Operating income (loss)                                      529          1,461        (18,955)          1,958
Other expenses
Change in fair value of conversion option                  6,366              -         (1,693)              -
Finance costs                                               (395)             -           (787)              -
Foreign exchange gain (loss)                                  27              -            (27)              -
Total other expenses                                       5,998              -         (2,507)              -
Income (loss) before income taxes                          6,527          1,461        (21,462)          1,958
Income tax recovery                                        4,737              -         41,573               -
Net income and comprehensive income                       11,264          1,461         20,111           1,958
Earnings per share (basic)                                  0.02           0.00           0.05            0.01
Earnings per share (diluted)                                0.01           0.00           0.04            0.01

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