Canada NewsWire
MONTREAL, Nov. 9, 2020
TSX:NSR
OTCQX:NSRXF
(in U.S. dollars unless otherwise noted)
MONTREAL, Nov. 9, 2020 /CNW Telbec/ - Vincent Metcalfe, CEO 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% 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."
Third Quarter Highlights:
(1) | Refer to the non-IFRS measures section of this press release. |
Declaration of dividends:
Nomad is also pleased to announce the second quarterly dividend of CAD $0.005 per common share, payable on January 15, 2021 to Nomad's shareholders of record as of the close of business on December 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 December 31, 2020. The dividend has been designated by Nomad as an "eligible dividend" under the Income Tax Act (Canada).
Q3 2020:
By Category | Ounces earned | Ounces sold | Revenues ($000) |
Gold (in kind) | 2,691 | 2,856 | 5,448 |
Cash received (gold) | 409 | 409 | 780 |
3,100 | 3,265 | 6,228 | |
Silver (in kind) | 52,616 | 52,616 | 1,340 |
Total GEOs (1) | 3,769 | 3,933 | 7,568 |
Q3 2020:
GEOs | GEOs | Revenues | Cash costs(1) | Cash | |
Premier Gold Prepay Loan | 900 | 900 | 1,698 | — | 1,698 |
Bonikro Gold Stream | 1,791 | 1,955 | 3,750 | 783 | 2,967 |
Mercedes and South Arturo Silver | 583 | 583 | 1,153 | 239 | 914 |
Woodlawn Silver Stream | 86 | 86 | 187 | 33 | 154 |
RDM Gold Royalty | 409 | 409 | 780 | — | 780 |
Total | 3,769 | 3,933 | 7,568 | 1,055 | 6,513 |
(1) | Refer to the non-IFRS measures section of this press release. |
For the third quarter 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 48% from the Americas, 50% from Africa and 2% from Australia.
Corporate Update:
Asset Update:
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 our partners publish annual sustainability reports outlining their sustainability and environment, social and governance ("ESG") related targets and progress.
On October 19, 2020, Troilus Gold announced that it is the recipient of the "Excellence in Sustainable Development" award presented annually by the Québec Mineral Exploration Association (AEMQ), for the advancement of its 100%-owned Troilus Gold Project, located northeast of Chibougamau, Québec, within the Frôtet-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 Québec 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 August 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, incentivising 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 September 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.
Share Capital:
On September 30, 2020 there were 524,526,327 common shares of Nomad outstanding.
Non-IFRS Measures:
Nomad has included certain performance measures in this press release that do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") including gold equivalent ounces, gold ounces and gold equivalent ounces earned and sold attributable to Nomad, adjusted net income, cash operating margin, cash operating margin attributable to Nomad, cash costs, cash costs per gold ounce sold and cash costs per silver ounce sold.
In addition to the non-IFRS performance measures described below, the Company's royalty and stream revenues are converted to gold equivalent ounces ("GEOs") by dividing the gold royalty and stream revenues for a specific period by the average realized gold price per ounce for the same respective period. Silver earned from royalty and stream agreements are 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.
Adjusted net income and adjusted net income per share are calculated by removing the effects of the non- cash cost of sales related to the gold prepay loan, the listing expenses and the income tax recovery resulting from the RTO Transaction, the non-cash change in fair value of the conversion option for the Deferred Payment to the Yamana Group and the non-cash change in fair value of gold prepay loan. The
Company believes that, in addition to measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company's performance.
Cash operating margin is calculated by subtracting the average cash cost of gold and silver on a per ounce basis from the average realized selling price of gold and silver on a per ounce basis. The Company presents cash operating margin as management and certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies who present results on a similar basis as well as to evaluate the Company's ability to generate cash flow.
Average cash cost of gold and silver on a per ounce basis is calculated by dividing the total cost of sales, less depletion and non-cash costs of sales related to the gold prepay loan, by the ounces sold. In addition to measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company's performance and ability to generate cash flow in comparison with other streaming and royalty companies in the precious metals mining industry who present similar measures of performance.
The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate these non-IFRS measures differently.
Refer to the Non-IFRS and Other Measures section the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2020.
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 12 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.
Nomad Royalty Company Ltd.
500-1275 ave. des Canadiens-de-Montréal
Montréal (Québec) H3B 0G4
nomadroyalty.com
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that Nomad expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, the satisfaction of all conditions precedent for the closing of the Royalty Purchase. Although Nomad believes the expectations expressed in such forward- looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include, the impossibility to satisfy the conditions precedent for closing the Royalty Purchase, the impossibility to acquire royalties, streams and to fund precious metal streams, gold prices, Nomad's royalty and stream interests, access to skilled consultants, results of mining operations, exploration and development activities for properties with respect to which Nomad holds a royalty or stream, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment, timeliness of government or court approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations, market prices, continued availability of capital and financing and general economic, market or business conditions. Nomad cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the forward looking statements contained herein should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Nomad believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. Nomad undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.
Nomad Royalty Company Ltd. | ||
September 30, 2020 | December 31, 2019 | |
$ | $ | |
Assets | ||
Current assets | ||
Cash | 15,028 | — |
Amounts receivable | 712 | 140 |
Gold prepay loan | 7,024 | 6,842 |
Other assets | 1,298 | 300 |
Total current assets | 24,062 | 7,282 |
Non-current assets Gold prepay loan | 9,583 | — |
Royalty and stream interests | 174,006 | 68,973 |
Deferred income taxes | 37,220 | — |
Total non-current assets | 220,809 | 68,973 |
Total assets | 244,871 | 76,255 |
Liabilities | ||
Current liabilities | ||
Accounts payable and accrued liabilities | 3,578 | 375 |
Total current liabilities | 3,578 | 375 |
Non-current liabilities | ||
Deferred payment liability – host contract | 8,889 | — |
Deferred payment liability – conversion option | 9,379 | — |
Total non-current liabilities | 18,268 | — |
Total liabilities | 21,846 | 375 |
Equity | ||
Common shares | 215,968 | — |
Net parent investment | — | 75,880 |
Warrants | 209 | — |
Contributed surplus | 2,452 | — |
Retained earnings | 4,396 | — |
Total equity | 223,025 | 75,880 |
Total liabilities and equity | 244,871 | 76,255 |
Nomad Royalty Company Ltd. | ||||
Consolidated statements of income and comprehensive income (unaudited) | ||||
(tabular amounts expressed in thousands of United States dollars, except per share amounts) | ||||
Three months ended | Nine months ended | |||
September | September | September | September | |
30, 2020 | 30, 2019 | 30, 2020 | 30, 2019 | |
$ | $ | $ | $ | |
Revenue | ||||
Gold and silver sales | 6,788 | 4,276 | 18,775 | 12,765 |
Other revenue | 780 | — | 1,207 | — |
Total revenue | 7,568 | 4,276 | 19,982 | 12,765 |
Cost of sales | ||||
Purchased cost of gold and silver | 2,753 | 3,762 | 11,732 | 10,750 |
Depletion of royalty and stream interests | 2,962 | 454 | 5,440 | 1,946 |
Total costs of sales | 5,715 | 4,216 | 17,172 | 12,696 |
Gross profit | 1,853 | 60 | 2,810 | 69 |
Other operating expenses | ||||
General and administrative expenses | 345 | 615 | 1,607 | 1,839 |
Share-based compensation | 818 | — | 2,162 | — |
Listing expenses | — | — | 23,492 | — |
Total other operating expenses | 1,163 | 615 | 27,261 | 1,839 |
Operating income (loss) | 690 | (555) | (24,451) | (1,770) |
Other income (expenses) | ||||
Change in fair value of conversion option | (3,075) | — | (8,059) | — |
Change in fair value of gold prepay loan | 1,392 | 928 | 4,967 | 2,267 |
Finance costs | (308) | — | (392) | — |
Foreign exchange gain (loss) | 102 | — | (54) | — |
Total other income (expenses) | (1,889) | 928 | (3,538) | 2,267 |
Income (loss) before income taxes | (1,199) | 373 | (27,989) | 497 |
Income tax recovery | 1,725 | — | 36,836 | — |
Net income and comprehensive income | 526 | 373 | 8,847 | 497 |
Earning per share (basic and diluted) | 0.00 | 0.00 | 0.02 | 0.00 |
Weighted average number of common shares outstanding | ||||
Basic and diluted | 515,409,164 | 327,717,520 | 422,076,161 | 327,717,520 |
Nomad Royalty Company Ltd. | ||||
Consolidated statements of cash flows (unaudited) | ||||
(tabular amounts expressed in thousands of United States dollars) | ||||
Three months ended | Nine months ended | |||
September | September | September | September | |
30, 2020 | 30, 2019 | 30, 2020 | 30, 2019 | |
$ | $ | $ | $ | |
Operating activities | ||||
Net income for the period | 526 | 373 | 8,847 | 497 |
Adjustments for: | ||||
Cost of sales related to gold prepay loan | 1,698 | 3,639 | 9,972 | 10,265 |
Depletion of royalty and stream interests | 2,962 | 454 | 5,440 | 1,946 |
Share-based compensation | 818 | — | 2,162 | — |
Listing expense | — | — | 22,390 | — |
Change in fair value of conversion option | 3,075 | (928) | 8,059 | (2,267) |
Change in fair value of gold prepay loan | (1,392) | — | (4,967) | — |
Deferred income tax recovery | (1,915) | — | (37,026) | — |
Finance costs | 188 | — | 244 | — |
Interest received | 259 | 186 | 871 | 691 |
Changes in other assets and liabilities | (976) | (2,227) | (372) | (3,782) |
Cash provided by operating activities | 5,243 | 1,497 | 15,620 | 7,350 |
Investing activities | ||||
Cash acquired | — | — | 3,149 | — |
Acquisition of gold prepay loan | — | — | (15,500) | (10,000) |
Acquisition of royalty and stream interests | (1,940) | (18,500) | (11,940) | (37,000) |
Cash used in investing activities | (1,940) | (18,500) | (24,291) | (47,000) |
Financing activities | ||||
Proceeds on issuance of common shares | — | — | 9,652 | — |
Share issue expenses | (100) | — | (714) | — |
Financing fees | (414) | — | (414) | — |
Net parent investment | — | 17,003 | 15,175 | 39,650 |
Net cash provided by (used in) financing activities | (514) | 17,003 | 23,699 | 39,650 |
Net increase in cash | 2,789 | — | 15,028 | — |
Cash at beginning of period | 12,239 | — | — | — |
Cash at end of period | 15,028 | — | 15,028 | — |
SOURCE Nomad Royalty Company Ltd.
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