NEWS - Nomad Royalty earns $20.11-million (U.S.) in 2020 Nomad Royalty earns $20.11-million (U.S.) in 2020
2021-02-18 08:21 ET - News Release
Mr. Vincent Metcalfe reports
NOMAD ROYALTY COMPANY REPORTS 2020 ANNUAL AND Q4 RESULTS
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."
(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(1) ("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(1) of $1.3 million for Q4 2020 ($3.2 million for Q4 2019) and $9.7 million for the year 2020 ($11.7 million for 2019).
Gross profit of $1.7 million for Q4 2020 ($0.05 million for Q4 2019) and $4.5 million for the year 2020 ($0.1 million for 2019).
Cash operating margin(1) 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 RTO Transaction, the cash operating margin(1) attributable to Nomad amounts to $27.2 million for the year 2020.
Cash operating margin(1) of 86% for Q4 2020 (96% for Q4 2019) and 90% for the year 2020 (96% for 2019).
$22.5 million of cash as at December 31, 2020.
Completed the acquisition of Coral Gold Resources Ltd. ("Coral"), owner of a sliding-scale 1% to 2.25% NSR royalty on Nevada Gold Mines' Robertson property located in Nevada, U.S.A., for cash consideration of $1.9 million and the issuance of 39,994,252 units of Nomad, each such unit being comprised of one common share and one-half of a common share purchase warrant of the Company.
Completed the acquisition of a 0.21% NSR royalty on the Blackwater Gold Project located in British Columbia, Canada for total $1.8 million cash consideration and the issuance of 1,583,710 common shares of the Company. Cash consideration of $0.9 million was paid and 791,854 common shares were issued in 2020.
Completed a secondary offering by Yamana Gold Inc. of 22,750,000 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 ten 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.
(1)Refer to the non-IFRS measures section of this press release.
Q4 2020: By Category Ounces earnedOunces soldRevenues ($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(1) 3,587 3,587 6,784
GEOs earned(1)GEOs sold(1)Revenues ($000)Cash costs(1) ($000)Cash operating 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 Streams841 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 earnedOunces soldRevenues ($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(1) 13,973 14,870 26,766
GEOs earned(1)GEOs sold(1)Revenues ($000)Cash costs(1) ($000)Cash operating 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 Streams1,823 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 (1)Refer to the non-IFRS measures section of this press release.
For the fourth quarter and for the year ended December 31, 2020, revenue was sourced 100% 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% in revenue from other commodities. Geographically, revenue was sourced 58% (68% for the year 2020) from the Americas, 42% (28% for the year 2020) from Africa and 0% (4% 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 #5 sub-vertical shaft in September 2020, Blyvoor Gold received its final license which will allow them 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 they have 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 September 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 December 16, 2020, Equinox Gold Corp. ("Equinox") 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%. The strong performance was driven by higher production rates that averaged 694 tonnes per day processed. On January 19, 2021, Premier published a preliminary feasibility study on South Arturo which outlined an 8-year mine life and was based on a mineral resource estimate as at December 1, 2020 which included Nomad attributable reserves of 1.9 million ounces of silver (3.8Mt at 15.23g/t), measured and indicated resources of 4.0 million ounces of silver (20.0Mt at 6.19g/t) and an inferred mineral resource of 1.8 million ounces of silver (10.1Mt at 5.47g/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 August 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 advisor 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 twelve-month extension of the senior facility waivers, including from the Company under the Woodlawn Silver Stream Agreement, until August 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 January 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 re-start, along with environmental management of the site. During the fourth quarter of 2020, optimization studies and key work programs targeting value-add opportunities at Woodlawn were progressed or completed. Following the appointment of an advisor 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 February 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 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% of the 20,000-hectare land package has been explored.
Moss Gold Royalty: Northern Vertex is conducting an aggressive exploration program with 3 drill rigs onsite to expand the resource with the aim at extending the mine life and testing district scale targets. Recent results intersected high grade at the Ruth Vein target, widespread mineralization within the Gold Bridge and West Extension targets located 1.5km west of the pit, and similar Moss pit mineralization at the West target. 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 meters. In addition to the multi-phased 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 February 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 ore body 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 November 20, 2020, Barrick Gold Corporation ("Barrick") announced during their 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 50m and 450m from surface, and located outside of the NI 43-101 mineral resource envelope and the open pit proposed in the August 2020 PEA. For winter 2021, Troilus is implementing a 7,000 metres 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 Pre-Feasibility Study. A Pre-Feasibility Study is expected to be published later in 2021 and an Environmental Impact Study targeted for early 2022.
Share Capital:
On December 31, 2020 there were 565,429,124 common shares of Nomad outstanding. As at February 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 CAD $/US$ exchange rate as at February 16, 2021, 14,084,507 common shares would be issuable should the conversion option be exercised on such date.
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 14 royalty, stream, and gold loan assets, of which 6 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.
Consolidated statements of income and comprehensive income (unaudited) (tabular amounts expressed in thousands of United States dollars, except per share amounts) Three months ended Year ended December 31, 2020December 31, 2019December 31, 2020 Dec. 31, 2019 $ $ $ $ Revenue 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 interests2,429 645 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 Weighted average number of common shares outstanding Basic (in thousands) 543,298 327,718 446,616 327,718 Diluted (in thousands) 560,885 327,718 450,753 327,718
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