Mr. Vincent Metcalfe reports
NOMAD ANNOUNCES Q1 2021 RECORD DELIVERIES, FIRST DELIVERY FROM BLYVOOR GOLD STREAM AND PROVIDES ASSET UPDATES
Nomad Royalty Company Ltd. has provided its preliminary gold and silver deliveries and sales from its royalty, stream and gold loan interests for the first quarter of 2021 (in U.S. dollars unless otherwise noted).
FOR THE THREE MONTHS ENDED MARCH 31, 2021
Gold -- Premier Gold prepay loan 900
Gold -- stream interests 3,954
Gold -- royalty interests (1) (received in cash) 175
Silver -- stream interests 37,338
Gold equivalent ounces (1) (2) 5,575
The company realized preliminary revenues (3) of $9.7-million for the three-month period ended March 31, 2021, resulting in preliminary cash operating margin (3) (4) of $7.9-million.
(1) Preliminary gold ounces from royalty interests consist of gold equivalent ounces of cash-settled amounts for the RDM and Moss net smelter return royalties.
(2) The company's royalty and stream revenues are converted to gold equivalent ounces by dividing the gold royalty and stream revenues for a specific period by the average realized gold price per ounce for the gold stream revenues and by dividing the gold royalty revenues by the average gold price for the gold royalty revenues, for the respective period. Silver earned from royalty and stream agreements is 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.
(3) The financial information disclosed in this press release is preliminary, subject to final quarter-end closing adjustments and may change materially.
(4) Cash operating margin is calculated by subtracting the cash cost of gold and silver sold from revenues. The company presents cash operating margin as management and certain investors use this information to evaluate the company's performance in comparison with other streaming and royalty companies that present results on a similar basis as well as to evaluate the company's ability to generate cash flow.
Asset updates and recent developments
First delivery from Blyvoor gold stream: The company has received its first gold delivery from the Blyvoor gold mine, located in Carletonville, South Africa. Following the first gold shipment at the Blyvoor gold mine, mining activities were temporarily suspended as the result of an unlawful blockade at the mine entrance by members of a local union. On April 8, 2021, the high court ruled in favour of Blyvoor Gold Capital Pty. Ltd. and determined the blockade to be unlawful. As of April 12, 2021, Blyvoor has recommenced operations and production ramp-up activities are continuing again.
Pending full restart, the Blyvoor gold mine will be fully operational and additional deliveries will be expected at regular intervals as the mine ramps up to full production capacity. Activities on site will be focused on opening new panels on deeper levels, augmenting monthly ore throughput and optimizing the current operation, with commercial production anticipated by the end of 2021, at which time Nomad will be providing guidance to investors in respect to deliveries under its gold stream. Safety remains a top priority for all stakeholders and, as such, the Blyvoor gold mine has implemented robust safety standards and strict working procedures. A technical report in connection with the Blyvoor gold mine mineral resource is expected to be completed in the second quarter of 2021.
Nomad owns a 10-per-cent gold stream on the Blyvoor gold mine on the first 160,000 ounces of gold production within a calendar year, and 5 per cent on any additional gold production within the same calendar year. Following the delivery of 300,000 ounces of gold to Nomad under the agreement, the stream percentage shall be 0.5 per cent on the first 100,000 oz of production within a calendar year until gold production reaches 10.32 million ounces at the Blyvoor gold mine. Nomad will make continuing payments of $572 for each ounce of gold delivered under the stream agreement.
Robertson to contribute meaningfully to Cortez: On March 18, 2021, following a strategic review by executive teams from Barrick Gold Corp. and Nevada Gold Mines (NGM), enormous geological prospectivity of the NGM properties was confirmed and Barrick Gold outlined its key development projects. Barrick Gold mentioned that agile management and exploration and orebody knowledge were implanted at NGM and were already delivering results. The area between Pipeline and Robertson in the Cortez complex was mentioned as an area with exciting opportunities for major new discoveries. On Feb. 18, 2021, Barrick Gold disclosed that fieldwork and district-scale modelling validated conceptual models. Sectional interpretation is continuing between Carlin-type Pipeline and Crossroads deposits as well as intrusive-related mineralization at Robertson, and Lower Plate carbonates are potentially shallower to the north. Significant to Nomad, Barrick Gold reported that Robertson was to start contributing meaningfully to Cortez's production profile in 2025.
Blackwater continues to advance toward production: Artemis Gold Inc. continued to execute on its work program and reached several development milestones in the last weeks. On March 29, 2021, it executed a binding memorandum of understanding with Ausenco Engineering Canada Inc. providing for a guaranteed maximum price (GMP) for a fixed-price engineering, procurement and construction (EPC) contract to construct a 5.5-million-tonne-per-annum processing facility and associated infrastructure for the Blackwater gold project in central British Columbia. On April 9, 2021, Artemis Gold executed a credit-approved mandate letter and term sheet from Macquarie Bank Ltd. and National Bank of Canada to arrange a $360-million (Canadian) project loan facility (PLF) to finance a significant component of the estimated construction costs of the Blackwater gold project. Subject to final credit approval and final due diligence, Macquarie and National Bank would agree to each underwrite 50 per cent of the PLF. In support of its definitive feasibility study (DFS) and in preparation for the commencement of construction for the Blackwater gold project, Artemis Gold has been conducting the following activities: ore grade control drilling to refine the detailed grade schedule and mine plan for the first year of production; metallurgical test work; geotechnical drilling as part of site preparation work; and a British Columbia hydro study. The work program in the first six months of 2021 is on track to culminate with the completion of the DFS on the Blackwater gold project by mid-2021.
New Mercedes gold and silver stream with Equinox Gold Corp.: On April 7, 2021, Equinox Gold completed the acquisition of Premier Gold Mines Ltd., with the Mercedes mine now transitioning into the portfolio of a large, diversified gold producer with plans to increase throughput in the future at the mine. Concurrently to the completion of the acquisition, Nomad announced that the Mercedes stream agreement was amended and restated and now provides for, in addition to silver deliveries, fixed quarterly gold deliveries of 1,000 ounces of refined gold from the Mercedes mine (subject to upward and downward adjustments in certain circumstances), plus an additional 6.5 per cent of such adjusted amount payable in refined gold. Fixed quarterly gold deliveries shall terminate once an aggregate of 9,000 ounces of gold have been delivered (not including any refined gold received pursuant to the additional 6.5 per cent of the adjusted amount). If the quarterly average gold price is greater than $1,650 per ounce in any quarter, then the aggregate gold quantity deliverable in the next quarter is reduced by 100 ounces of refined gold, and if the quarterly average gold price is less than $1,350 per ounce, then the aggregate gold quantity deliverable is increased by 100 ounces of refined gold). Concurrently, the gold prepay loan agreement held by the company was terminated.
New South Arturo silver stream with I-80 Gold Corp.: On April 7, 2021, the company and i-80 Gold have entered into a new South Arturo stream agreement that provides for deliveries from i-80 Gold to the company of 100 per cent of the ounces of refined silver in attributable production from the existing mineralized areas at South Arturo and 50 per cent of ounces of refined silver in attributable production from the exploration stream area.
Moss royalty to benefit from large-scale exploration program: The Moss mine is currently the largest pure gold and silver mine in Arizona, with large-scale exploration potential. Northern Vertex has indicated that during the first half of 2021, the exploration plan includes infill drilling, property-wide exploration and drill target definition for resource expansion. For the second half of 2021, the exploration focus will be on resource expansion drilling, regional geophysics and a priority regional target drilling campaign.
Troilus expands mineralized footprint at Southwest: The Troilus gold project continues to return great exploration results on the Southwest zone. During the months of March and April, 2021, several drill hole results were released. The Southwest zone is a rapidly expanding gold zone located approximately 2.5 kilometres southwest of the main mineral corridor (Z87 and J zone) within the Troilus gold project. The Southwest zone demonstrates a continuing trend of higher-grade gold intercepts within a much broader disseminated mineralized zone, consistent with the main Z87 zone. Parallel zones of mineralization continue to be discovered as drilling is extended at depth. In the coming months, infill drilling will be conducted in the Southwest zone, which will be required for all the newly identified zones of mineralization to be included in an updated mineral resource estimate and prefeasibility study, currently targeted for completion in the second half of 2021.
Vincent Cardin-Tremblay, PGeo, vice-president, geology, of Nomad Royalty is the qualified person as defined in National Instrument 43-101, who has reviewed and approved the technical content of this news release.
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 and stream 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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