The first transaction involves a definitive agreement to acquire Coral Gold Ltd. [CLH-TSXV; CLHRF-OTCQX] 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.
Coral Gold shares rose 16.8% or 14 cents to 97 cents on volume of 291,850.
Nevada Gold Mines, owned 61.5% by Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] and 38.5% by Newmont Goldcorp Corp. [NGT-TSX, NEM-NYSE], is 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.
Based on the current spot gold price of over US$1,940/oz, the applicable NSR royalty rate is currently 2%. The Robertson development project contains an historical Inferred Resource estimate in excess of 2.7 million ounces of gold.
Deal highlights include exploration upside from a key asset property with drilling currently underway located in 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.
Coral shareholders will receive, for each Coral share held, $0.05 in cash and 0.80 of a unit of Nomad. Each unit will consist of one Nomad share and one-half a warrant. Each full warrant is good to buy one additional Nomad share at $1.71 for two years which is expected to close on November 6, 2020.
Nomad Royalty also entered into a definitive agreement 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-OTC] is the operator of the Moss Mine, which is targeting production of 55,000-65,000 gold equivalent ounces annually.
The royalty consists of a 0.5-3% NSR royalty on all metals and mineral production from specific claims on the property. Nomad will issue 7.4 million shares to the shareholders of the vendor in full satisfaction of the purchase price.