MONTREAL, May 13, 2021 /CNW Telbec/ - Nomad Royalty Company Ltd. ("Nomad" or the "Company") (TSX: NSR) (OTCQX: NSRXF) is pleased to announce that it has entered into an agreement (the "Agreement") with Appian Capital Chile SpA, which is a subsidiary of the Appian Natural Resources Funds advised by Appian Capital Advisory LLP (the "Vendor"), to acquire an effective 0.28% net smelter return royalty (the "Royalty") on the producing Caserones mine located in the Atacama region of Chile (the "Caserones mine") for a cash consideration of US$23 million as well as the issuance of two million common share purchase warrants of the Company.
Transaction Highlights
- Acquisition of a royalty on a major mine operated by Minera Lumina Copper Chile, which is indirectly owned by JX Nippon Mining & Metals Corporation
- Addition of a new revenue stream from Chile, a tier 1 mining jurisdiction, to Nomad's portfolio
- New mine with long reserve life and significant exploration potential, located on a large land package of ~17,000 hectares with potential for future expansions
- Provides Nomad with measured exposure to copper, a key metal in supporting the world's green transition away from fossil fuels and towards electrification
Vincent Metcalfe, Chief Executive Officer of Nomad, commented on the transaction, "The Caserones Royalty provides Nomad with immediate cash flow over a very long mine life from Chile, a tier 1 mining jurisdiction. This transaction highlights Nomad's unique positioning within the royalty space in terms of its financial capacity to acquire high quality royalties and is consistent with Nomad's strategy of building a diversified portfolio of high quality cash flowing royalties and streams."
Joseph de la Plante, Chief Investment Officer of Nomad, further commented, "We are very pleased to announce this transaction with Appian. The acquisition of the Caserones Royalty provides Nomad with exposure to copper at a time when the demand for green and electrification linked commodities, in particular copper, is set to surge to record highs as the global economy transitions to zero emission technologies."
Caserones Royalty
The Royalty consists of an effective 0.28% net smelter return royalty on the tenements comprising the Caserones mine, located on a land package of ~17,000 hectares.
Caserones Mine Highlights
The Caserones mine is owned and operated by Minera Lumina Copper Chile, which is indirectly owned by JX Nippon Mining & Metals Corporation. The mine consists of an open pit mining operation, with a plant to produce copper and molybdenum concentrates from primary sulfides, and a solvent extraction and electro winning plant (SX-EW) to produce copper cathodes with oxide ore processing, mixed and secondary sulfides. The mine is located in the Atacama region of Chile and has over 5 years of operational history with a current estimated mine life of 19 years. The mine is located 15 km west of the international border with Argentina and 162 km southeast of the city of Copiap (the capital of the Atacama region) at an elevation of approximately 4,000m above sea level.
In 2019, the Caserones mine produced 146kt Cu and 2,778t of Mo with expected life of mine average annual payable production of ~148kt Cu Eq. The mine benefits from a significant historical investment of US$4.2bn and well established infrastructure, and is expected to produce significant volumes of copper and molybdenum over the long term.
Transaction Details
As part of the transaction, Nomad will acquire shares representing a 30% ownership interest in Compania Minera Caserones ("CMC"), a private Chilean contractual mining company which holds the payment rights to 32.5% of a 2.88% net smelter return royalty on the Caserones mine. Upon closing, Nomad will become a registered shareholder of CMC and will be party to a shareholders agreement which provides for, among other things, distribution of all royalty payments net of Chilean income taxes ("Share Acquisition").
As consideration for the Share Acquisition, Nomad will pay a cash consideration of US$23 million (the "Cash Consideration") and deliver 2 million common share purchase warrants to the Vendor. Each warrant will entitle the holder thereof to purchase one common share of Purchaser at a price equal to US$1.085 per share for a period of 36 months following the date of the Agreement. Nomad expects to fund the Cash Consideration through its revolving credit facility. The transaction will have an economic effective date of May 1, 2021 which shall provide Nomad with 2/3 of the of the Q2 dividend payment from CMC (expected during Q3).
Subject to certain conditions, including the registration in Nomad's name of the shares of CMC being acquired by Nomad in the shareholders registry of the Custodian of Mines of Mines of Santiago, Chile, the closing of the Share Acquisition is expected in late May 2021.
QUALIFIED PERSON
Vincent Cardin-Tremblay, P. Geo., Vice President, Geology of Nomad Royalty is the "Qualified Person" as defined by NI 43-101 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 14 royalty, and stream, assets, of which 7 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.
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