Categories: Precious Metals
Topics: General Precious Metals

Nomad Royalty (TSX: NSR) CEO Vincent Metcalfe on Nomad's Royalties, Dividend & Aggressive Strategy in 2021

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Nomad Royalty, Mr. Vincent Metcalfe. Vince, how are you? Happy new year.

Vincent Metcalfe: Happy new year. Very good, thank you.

Gerardo Del Real: Let's catch up a bit. You and I spoke about a month or so ago and a lot has happened since then. And I actually think it was about a month and a half ago. The last time you and I spoke, we touched on Robertson and we touched on that transaction and then it seems like immediately afterwards, right, there was some news that's pretty significant to the bottom line. So just to backtrack a little bit and provide an overview, can you explain that acquisition and kind of what's transpired since then? Because it's important.

Vincent Metcalfe: Absolutely. Well, so what happened, I think, after we had our last call, about a week and a half later we closed the transaction. But the most important thing about what happened is the next day, once we closed, we actually got a great piece of news from Barrick. Barrick was conducting its Investor Day presentation, spent a lot of time on the Cortez camp. And a good piece of news that came out of that was the fact that between Barrick and Newmont and Nevada Gold Mines JV, they have now announced that Robertson was going to be in production within the next four or five years, in the sense that it was now included within the five-year plan, and that development should be ongoing within the next few years with first production in 2025.

The great thing about that is that when Barrick puts a deposit in production, it's usually a pretty sizeable deposit. So last we heard about the Robertson asset, that was a 2.7 million ounce resource. They've now been working on it for four years. So there's a strong likelihood that that resource has now exceeded that number. And most importantly is that you've got the two best operators in the world that are going to put it in production. So it will become a very, very significant asset for us with that Tier 1 type quality attached to it with, again, even more exploration upside as well. So I'm very, very happy with that and especially that located in Nevada in the US. And gold and silver is the main things coming out of that, so very happy with the developments post our closing.

Gerardo Del Real: There was quite a bit of down time in the markets between the middle of December and it seems like, frankly, just this week. Right? It's like everybody took almost three or four weeks off. You, however, Vince, were very, very busy. You had some news on the 15th of December that I want to touch on. You joined the UN Global Compact. That's important. And then just yesterday, you had news where you acquired a royalty on the Blackwater Gold Project in Canada, so you completed that acquisition. You've been busy.

Vincent Metcalfe: Oh yeah, we've never stopped. Joining the UN Global Compact is something that's very important for us as something that the three founders are very important, it's something that's very important to us. We want to make sure that we improve the lives of the peoples and the stakeholders and everyone involved in mine development and so on. So that's something that, for us over the next 12 months, you're going to see us put some great programs in place with some of the operators of these assets and really helping them, whether it's upgrading certain things for the host communities and really making a difference and proving that mining is beneficial for those host communities, and also really making sure that as a corporate citizen, we operate with the highest standard that's out there. So that's something that's very important.

Regarding our acquisition that was just announced today, that for us is also something that's important. It's not a big acquisition. It's only $3 million, but we were able to use some cash, some shares and really get some really good upside optionality on a Canadian asset with a great resource. It's 8 million ounces in reserves already. It's operated by Artemis Gold, probably one of the best teams to be putting some mines together. They've had a very, very good run with Atlantic Gold. So it checked a lot of boxes. Great resource, great team, a great jurisdiction in Canada, so we're pretty happy with that one.

Gerardo Del Real: Excellent. Again, for people not familiar with the portfolio and the royalty model, can you explain the benefits of it, how it mitigates risk, how you diversify the jurisdictional exposure and the Nomad approach to maximizing cash flow with low G & A?

Vincent Metcalfe: Yeah. No, absolutely. As an investor, when you look at Nomad, what's great is that you're not investing in one single asset. As we stand here today, we've got 14 different assets. Six of them are already cash flowing. We've got two, which are going to be reaching the cash flow stage this year. So by the end of the year, there'll be eight different sources of cash flow in a multiple of different jurisdictions. So you've got cash flow coming from the US, coming from Mexico, other places in Latin America, other places in Africa. There is going to be Australia by the end of the year. So that's what we offer is diversification.

And most importantly, the great thing about the royalty model is that you're paid right from the production point of view, in the sense that you don't participate in the cost structure. You're paid right from the top line. So when we have royalty, it's basically 99% margin; when we have streams, it's between 65% and 75% margins. Our portfolio as a whole has margins around 80% for 2021. So that's what you get as an investor is in diversification of cash flow, but really focused on gold and silver only, and a strong diversification and lower risk in the sense that you're shielded from cost blow outs and so on.

Gerardo Del Real: Well said. Well said. Walk me through what the rest of the year looks like. I know you're busy. I know you're aggressive. You've made good on your promise to continue to bring in quality assets into the portfolio. I've got to believe there's a lot more where that came from.

Vincent Metcalfe: Yeah. We've never thought we'd be this busy and it just keeps really adding to it. We were busy in the last half of 2020. We've got even more things to look at at the moment. We're very active on a few different fronts. One thing that did happen that was kind of not necessarily a Nomad decision, but Yamana also did its $25 million secondary of our shares, which actually is a big benefit for the future and for 2021, because it actually brought in a lot of new investors in our stocks, both institutional and retail. That was in the order of $25 million, so it's increasing the public float of Nomad. It's increasing the liquidity. And that's something that I think people should keep an eye on because as we increase that liquidity, as we increase our public float, the chances that we get included in some of the industries, like the GDXJ, is something that ends up being a very big benefit because it will basically fuel more passive funds to our stock. And that inherently will fuel higher multiples in the future.

Gerardo Del Real: Nomad has a 52-week high of C$1.89. You're currently trading at $1.06. I think it presents an excellent, excellent speculation, especially if we get the type of gold and silver market that I know we all believe we're in for. So no, look, good timing. And it should be a fun 2021, despite the chaos and the volatility. Anything else to add to that, Vince?

Vincent Metcalfe: Don't forget the dividends. We're paying 1.9% dividend and it's going to grow.

Gerardo Del Real: I love it. I love it. Vince, thank you so much for the update. I appreciate it.

Vincent Metcalfe: Thank you.