Nomad Royalty to use credit facility for expansion

Nomad Royalty Co. Ltd. [NSR-TSX, NSRXF-OTCQX], said Monday it has secured commitments from financial lenders to increase its revolving credit facility to US$125 million, money it will use for future royalty and stream acquisitions.

It has also obtained an option to increase the facility to US$150 million, subject to the satisfaction of certain conditions.

The completion of the increased facility will provide Nomad Royalty with additional financial flexibility as it grows its business through current and future opportunities, the company said in a press release.

Nomad shares advanced on the news rising 3.5% or 31 cents to $9.04. The shares are currently trading in a 52-week range of $18.90 and $7.34.

The increased credit facility will continue to be secured by all of the company’s assets and will have a four-year term, extendable through a mutual agreement between Nomad and its lenders. Closing is scheduled to occur in the third quarter of 2021.

Nomad is an emerging precious metals royalty company which recently announced two separate transactions involving royalty assets in Nevada and Arizona.

The first transaction involved a definitive agreement to acquire Coral Gold  for US$45.8 million, leaving Nomad with a premier, uncapped sliding-scale 1.00% to 2.25% NSR royalty on the Nevada Gold Mines’ Robertson property in Nevada, which forms part of the greater Cortez and Pipeline mining complex.

Nevada Gold Mines, an entity owned 61.5% by Barrick Gold Corp. [ABX-TSX, GOLD-NYSE] and 38.5% by Newmont Goldcorp Corp., [NGT-TSX, NEM-NYSE], is now the world’s single largest gold mining complex. Consisting of eight mines and associated infrastructure, it is capable of producing 3.5 million ounces of gold annually.

The Robertson development project contains an historical inferred mineral resource estimate in excess of 2.7 million ounces in total oxide and sulphide materials (191.7 million tonnes grading 0.0143 ounces per tonne) using a 0.0147 ounce per tonne cut off, and based on a NI 43-101 preliminary economic assessment dated January 15, 2012.

Deal highlights include exploration upside from a key asset property with drilling currently underway, that is located within close proximity of the Cortez mill. The royalty comes with downside protection through minimum non-refundable advance royalty payments totaling US$0.5 million per year for 10 years commencing in 2025. NSR is also acquiring the Coral balance sheet with US$11.5 million in cash.

Nomad Royalty also boosted its portfolio by agreeing to acquire Valkyrie Royalty Inc., a private company that owns an NSR royalty on the Moss gold mine in Arizona for US$7.6 million. Northern Vertex Mining Corp. [NEE-TSXV, NHVCF]. is the operator of the Moss Mine, which is targeting production of 55,000 to 65,000 gold equivalent ounces annually.