Nomad said the transaction adds a new revenue stream from Chile while providing the company with measured exposure to copper, a key metal powering the world’s transition to a clean energy economy.
“The Caserones Royalty provides Nomad with immediate cash flow over a very long mine life from Chile, a tier 1 mining jurisdiction,” Nomad Royalty CEO Vincent Metcalfe said in a statement.
“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,” Metcalfe added.
In consideration for the transaction, Nomad Royalty will pay Appian Capital Chile SpA US$23 million in cash plus two million common share purchase warrants, with each warrant entitling the holder to buy one Nomad common share at a price equal to US$1.085 per share for a period of 36 months following the date of the agreement.
As part of the transaction, Nomad will acquire a 30% ownership interest in Compania Minera Caserones (CMC), a private Chilean contractual mining company that holds the payment rights to 32.5% of a 2.88% net smelter return royalty on the Caserones mine. Thus, the deal will provide Nomad with two-thirds of the 2Q dividend payment from CMC, which is expected during the third quarter of this year.
The Caserones mine is owned and operated by Minera Lumina Copper Chile, which is indirectly owned by JX Nippon Mining & Metals Corporation. In 2019, Caserones produced 146,000 tonnes of copper and 2,778 tonnes of molybdenum.
Nomad Royalty 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. The company owns a portfolio of 14 royalty, and stream, assets, of which seven 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.
Contact Sean at [email protected]
Story by ProactiveInvestors
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