Nomad Royalty Company Reports 2020 Annual and Q4 Results

TSX: NSR
OTCQX: NSRXF

(unaudited and in U.S. dollars unless otherwise noted)

MONTREAL , Feb. 18, 2021 /CNW Telbec/ - Vincent Metcalfe , CEO and Chair of the Board of Directors of Nomad stated "Nomad had a strong fourth quarter with revenue of $6.8 million as the portfolio continued to demonstrate its strength and reliability. As for the year 2020, Nomad was successful in launching and establishing a strong platform, while executing on the business plan of becoming a significant player in the sector. For 2021, Nomad expects organic portfolio growth which will allow it to continue to generate strong free cash flow while reinvesting in new opportunities that will support further growth and returns to shareholders."

Fourth quarter highlights and annual results:

• Gold ounces earned of 2,746 for Q4 2020 (2,450 for Q4 2019) and 11,475 for the year 2020 (9,800 for 2019).
  
  
• Silver ounces earned of 64,568 for Q4 2020 (138,209 for Q4 2019) and 217,401 for the year 2020 (292,861 for 2019).
  
  
• Gold equivalent ounces ⁽¹⁾ ("GEOs") sold of 3,587 for Q4 2020 (3,084 for Q4 2019) and 14,870 for the year 2020 (12,233 for 2019).
  
  
• Revenues of $6.8 million for Q4 2020 ( $4.6 million for Q4 2019) and $26.8 million for the year 2020 ( $17.4 million for 2019).
  
  
• Net income of $11.3 million for Q4 2020 ( $1.5 million for Q4 2019) and $20.1 million for the year 2020 ( $2.0 million for 2019).
  
  
• Adjusted net income ⁽¹⁾ of $1.3 million for Q4 2020 ( $3.2 million for Q4 2019) and $9.7 million for the year 2020 ( $11.7 million for 2019).
  
  
• Gross profit of $1.7 million for Q4 2020 ( $0.05 million for Q4 2019) and $4.5 million for the year 2020 ( $0.1 million for 2019).
  
  
• Cash operating margin ⁽¹⁾ of $5.9 million for Q4 2020 ( $4.4 million for Q4 2019) and $24.1 million for the year 2020 ( $16.7 million for 2019). Including cash received at the closing of the RTO Transaction, the cash operating margin ⁽¹⁾ attributable to Nomad amounts to $27.2 million for the year 2020.
  
  
• Cash operating margin ⁽¹⁾ of 86% for Q4 2020 (96% for Q4 2019) and 90% for the year 2020 (96% for 2019).
  
  
• $22.5 million of cash as at December 31, 2020 .
  
  
• Completed the acquisition of Coral Gold Resources Ltd. ("Coral"), owner of a sliding-scale 1% to 2.25% NSR royalty on Nevada Gold Mines' Robertson property located in Nevada, U.S.A. , for cash consideration of $1.9 million and the issuance of 39,994,252 units of Nomad, each such unit being comprised of one common share and one-half of a common share purchase warrant of the Company.
  
  
• Completed the acquisition of a 0.21% NSR royalty on the Blackwater Gold Project located in British Columbia, Canada for total $1.8 million cash consideration and the issuance of 1,583,710 common shares of the Company. Cash consideration of $0.9 million was paid and 791,854 common shares were issued in 2020.
  
  
• Completed a secondary offering by Yamana Gold Inc. of 22,750,000 common shares of Nomad.
  
  
• Declared a second quarterly dividend of $2.2 million .
  
  
• Joined the United Nations Global Compact committed to voluntarily aligning its operations and strategy with the ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. Nomad's short-term focus will be on four Sustainable Development Goals: Quality Education, Gender Equality, Clean Water and Sanitation and Climate Action.

Q4 2020:

Year 2020:

For the fourth quarter and for the year ended December 31, 2020 , 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 58% (68% for the year 2020) from the Americas, 42% (28% for the year 2020) from Africa and 0% (4% for the year 2020) from Australia .

Asset Update:

• Blyvoor Gold Stream: Blyvoor Gold informed the Company that in response to COVID-19, strict health and safety measures were implemented. Following the visit of the Department of Minerals Resources and Energy relating to the inspection of the #5 sub-vertical shaft in September 2020 , Blyvoor Gold received its final license which will allow them to access the deeper mining levels. Blyvoor Gold is now fully permitted and expects to complete the plant construction and to commence processing operations in the first quarter of 2021. Mining operations have commenced on the upper levels and ore is currently hauled to surface. Blyvoor Gold continues to ramp up mining operations in the mine. Blasting activities are now fully operational and taking place daily. The process plant construction is complete and ore processing has commenced. A technical report in connection with the Blyvoor Gold Mine mineral resource is expected to be completed in the first quarter of 2021.
  
  
• Bonikro Gold Stream: Allied Gold has informed the Company that they have been producing from the Akissi-So, Chapelle and Chapelle West extension pits.
  
  
• Mercedes Silver Stream : Following the pandemic-related suspension of the Mercedes Mine operations, Premier Gold announced that ore production and processing resumed in July 2020 with 12,183 ounces of gold and 49,985 ounces of silver produced for the three months ended September 30, 2020 . A new simplified operating plan with a more focused mining and development strategy has enhanced productivity, reduced costs, thus ensuring the mine's ability to reliably deliver free cash flow. This optimized plan has consolidated production to one mine portal from five and reduced the mining rate to a target of 1,200 tonnes per day from 2,000 tonnes. Premier Gold now operates the processing plant on a campaign basis in alignment with the plan and crew rotations. The success of future exploration and delineation drill programs is expected to allow the production rate to eventually return to the plant's nameplate capacity.
  
  On December 16, 2020 , Equinox Gold Corp. ("Equinox") announced the friendly acquisition of Premier Gold. Equinox will become the operator of the Mercedes mine and has indicated that there is expansion potential to increase production to 80,000 to 90,000 ounces of gold annually. Equinox operates seven mines globally, is very well capitalized and is led by a reputable management team with the ability to drive further productivity increases at the mine site.
  
  
• South Arturo Silver Stream : Nevada Gold Mines had another exceptional year with production exceeding budget by over 30%. The strong performance was driven by higher production rates that averaged 694 tonnes per day processed. On January 19, 2021 , Premier published a preliminary feasibility study on South Arturo which outlined an 8-year mine life and was based on a mineral resource estimate as at December 1, 2020 which included Nomad attributable reserves of 1.9 million ounces of silver (3.8Mt at 15.23g/t), measured and indicated resources of 4.0 million ounces of silver (20.0Mt at 6.19g/t) and an inferred mineral resource of 1.8 million ounces of silver (10.1Mt at 5.47g/t). In 2020, drill programs were completed at El Nino, with initial results suggesting the potential to expand underground resources and extend the mine life. A new mineral resource estimate will be completed in 2021 following receipt of all 2020 drilling results.
  
  
• Woodlawn Silver Stream: The operations at the Woodlawn mine were suspended and the project has been put into care and maintenance ("C&M") as of March 24, 2020 , in response to a number of factors, including the COVID-19 pandemic, its impact on global demand for commodities, the price of zinc and the extraordinary travel restrictions imposed by the Australian federal and state governments. As a result of the suspension of the operations at the Woodlawn Mine, Heron Resources sought, and received, waivers from its senior creditors, including from the Company, of certain covenants in respect of its principal credit agreement. On August 14, 2020 , Heron Resources announced the commencement of a strategic process in relation to its Woodlawn Mine and the appointment of Azure Capital as financial advisor to that with such strategic process. Azure Capital will have a broad mandate to explore various options for the Woodlawn Mine including refinancing, joint ventures, and partial or complete divestment. In support of this process, Heron Resources has received a further twelve-month extension of the senior facility waivers, including from the Company under the Woodlawn Silver Stream Agreement, until August 13, 2021 . The Woodlawn Mine will remain on care and maintenance until such time as the strategic process terminates or as otherwise agreed between Heron Resources and its stakeholders, including the Company.
  
  On January 28, 2021 , Heron Resources announced that the Woodlawn Mine site remains on C&M, with current activities focused on preserving mining and processing infrastructure for future re-start, along with environmental management of the site. During the fourth quarter of 2020, optimization studies and key work programs targeting value-add opportunities at Woodlawn were progressed or completed. Following the appointment of an advisor to explore strategic options for Woodlawn including refinancing, joint ventures, and partial or complete divestment, a full data room was established to support interested parties currently reviewing the project under confidentiality agreement. Under the current timetable for the strategic process, initial indicative non-binding proposals are expected to be received during the first quarter of 2021.
  
  
• Blackwater Gold Royalty: On February 10, 2021 , Artemis Gold submitted applications to the Government of British Columbia to undertake an early works construction program in respect of its Blackwater Gold Project in British Columbia, Canada . The construction program is designed to focus on clearing of key infrastructure areas including haul roads, the stage 1 tailing storage facility and camp areas. In addition, construction of the mine access road and plant-site bulk earthworks will be fast-tracked to facilitate early mobilization of the Engineering, Procurement and Construction contractor to site upon receipt of major works permits. The permitting process in respect of the construction program is expected to take several months with approvals anticipated in late Q2 2021.
  
  
• Gualcamayo Gold Royalty: Mineros S.A. has informed the Company that it is investing $8 million annually in near-mine exploration and infill drilling to increase mine life. Only 20% of the 20,000-hectare land package has been explored.
  
  
• Moss Gold Royalty: Northern Vertex is conducting an aggressive exploration program with 3 drill rigs onsite to expand the resource with the aim at extending the mine life and testing district scale targets. Recent results intersected high grade at the Ruth Vein target, widespread mineralization within the Gold Bridge and West Extension targets located 1.5km west of the pit, and similar Moss pit mineralization at the West target. Phase II drilling program was initiated in November 2020 and will extend to February 2021 , Phase II will focus on the high-grade Ruth Vein target, resource infill at Gold Bridge and target new discoveries within extensive stockwork gold and silver mineralization both on strike and at depth at the Moss Mine. The combined Phase I and II drilling programs will total 32,000 meters. In addition to the multi-phased exploration program, Northern Vertex continued to successfully implement a number of new initiatives to further optimize operations and reduce costs at the Moss Mine.
  
  
• RDM Gold Royalty: On February 9, 2021 , Equinox announced an investment of $35 million in growth capital relating entirely to capitalized stripping for a pushback of the open-pit, providing lower strip access to the ore body in future years. As per Equinox disclosure, the RDM Gold mine production for 2021 is estimated at 55,000 to 60,000 ounces of gold with cash costs of $1,000 to $1,050 per ounce and all-in sustaining costs ("AISC") of $1,175 to $1,225 per ounce. AISC at the RDM Gold mine in 2021 includes $10 million of sustaining capital of which $6 million relates to increasing capacity of the tailings storage facility, with $2 million for equipment and $2 million for buildings and infrastructure.
  
  
• Robertson Gold Royalty: On November 20, 2020 , Barrick Gold Corporation ("Barrick") announced during their investor day presentation that the Robertson property was now included within the five-year plan at Cortez, with first production expected in 2025. As per current guidance, Cortez is forecasted to produce 750,000 to 850,000 ounces annually from 2021 to 2025. Additionally, on the exploration front, Barrick will be conducting drilling programs at the Robertson property and initiate earlier stage generative exploration work on the Pipeline-Robertson corridor.
  
  
• Troilus Gold Royalty: In early 2021, Troilus reported positive results on the Southwest zone, including a 200-metre step-out hole which intersected high-grade gold-bearing mineralization between 50m and 450m from surface, and located outside of the NI 43-101 mineral resource envelope and the open pit proposed in the August 2020 PEA. For winter 2021, Troilus is implementing a 7,000 metres per month drilling program with the objective of expanding the mineral resource estimate at the Southwest Zone, definition drilling in the Z87 and J Zone and geotechnical drilling in support of the Pre-Feasibility Study. A Pre-Feasibility Study is expected to be published later in 2021 and an Environmental Impact Study targeted for early 2022.

Share Capital:

On December 31, 2020 there were 565,429,124 common shares of Nomad outstanding. As at February 16, 2021 , the Company had 566,231,380 common shares, 10,120,600 share options and 2,884,616 common share purchase warrants outstanding. The Company also had 1,312,900 restricted share units and 673,800 deferred share units outstanding. Pursuant to the deferred payment payable to the Yamana Group and based on the CAD $/US$ exchange rate as at February 16, 2021 , 14,084,507 common shares would be issuable should the conversion option be exercised on such date.

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, adjusted net income, cash operating margin, 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

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.

The following table provides a reconciliation of adjusted net income and adjusted net income per share (basic and diluted) (in thousands of dollars, except for amounts per share).

Cash operating margin and cash operating margin per ounce

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.

The following table provides a reconciliation of cash operating margin and cash operating margin per ounce (in thousands of dollars, except for amounts per share or per ounce).

Average cash cost and average cash cost per ounce

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 following table provides a reconciliation of average cash cost and average cash cost per ounce (in thousands of dollars, except for amounts per share or per ounce).

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.

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, 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.
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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)

Nomad Royalty Company Ltd.
Consolidated statements of cash flows (unaudited)
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SOURCE Nomad Royalty Company Ltd.

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