General Precious Metals
Nomad Royalty (TSX: NSR)(OTC: NSRXF) CEO Vincent Metcalfe on Becoming a Multi-Billion Dollar Royalty Company
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, it's been a bit. It's great to have you on, how are you?
Vincent Metcalfe: Very good, Gerardo. It's very good to be back on the program.
Gerardo Del Real: I joked off air a little bit that the stock obviously has done what a lot of the stocks have done the past 12 months during this consolidation in the gold price, which is either relatively flat or down, there's very few that are actually trading much higher than they were 12 months ago. However, it sure in the heck has not been for lack of activity or execution. And I wanted you to come on because I wanted to go over the multiple catalysts here recently and boxes that you've checked. You added a royalty on the Caserones Mine in Chile. You applied and were approved to commence trading on the NYSE, I want to get into that. And you declared your third quarter 2021 dividend here recently at the end of July. So again, you're executing beautifully, which is what the better teams in this space do during a downmarket, right?
Vincent Metcalfe: Yep. That's the plan. I mean, we've had our plan in front of us for the past 12, 18 months as we created the company, and we're checking the boxes. As you point out, I guess the macro backdrops since the beginning of 2021 for the gold stocks hasn't been great, but it's when we get these downtimes that we do our best work. So, it's the time to be doing deals, it's the time to be checking the boxes. And as you pointed out, we've now transacted six times since last year, so six new additions to the portfolio. The last two additions coming from the Caserones Mine in Chile, which, at the end of the day, we've invested $50 million into that royalty. And it's a royalty that's going to be generating probably between $8-9 million U.S. for the years to come.
So it's a great addition to the portfolio. It's going to be adding that stability of cash flows and operating mines. It's got 17 years of mine life in front of it, just on the reserves, and it's a large operator. Fully integrated in Japan with the smelters there. So, we couldn't ask for a better, I would say, a better addition to the portfolio. And you pointed to the dividend, we've now paid four dividends since the beginning of last year, since we implemented the policy.
And one thing to remember for your listeners is, we based our dividend policy off of four producing assets. We're now at eight. So, this year we've had four new assets come online or that we acquired. So it's giving us even more flexibility to maybe even look at increasing that dividend down the road.
Gerardo Del Real: And just for people that may be newer to the company, I've been on the record and I ran a promotion for the company with the company, independent of the company, just to be absolutely clear. This is something on my own, which I did for a newsletter that I write, a paid newsletter. But I speculated that Nomad has the potential to be 1,000% winner in the coming bull market, the bull market that I see developing. And a large consideration in making a statement like that and putting myself out there is because of the team and the experience and the success in the past in building out a company that knows how to increase revenue cashflow on a year on year basis. You now have, I believe, what? 15 royalties, and eight which are producing or coming online, is that accurate? 15 royalty and stream assets?
Vincent Metcalfe: Yeah, exactly. So we've got 15 assets, and that's very important also to understand, because you can see some of our peers sometimes, "We've got 100 royalties, we've got 100 streams." You know what? If you have 100 royalties on nothing, and nothing's cashflowing, it's tough to get that value creation. One of the main things, we don't have 100 different royalties at the moment, we've got 15. But when you look at where these royalties are located, they're on the operators footprint.
So what that means is, every time an operator is advancing production, increasing throughput, drilling, we get the full benefit of that. So, we see our royalty is getting enhanced on a daily basis. So having those royalties, this is not closeology. It's not, "We own a royalty on the extension of a deposit." No, we own the royalty on the deposit. So that's very, very important, and that's the way we're building. And yes, cashflow is growing. As I mentioned, we've gone from four cashflowing royalties, to now eight cashflowing assets. And that's the way you diversify, you limit volatility, and you enhance the value of your portfolio.
Gerardo Del Real: Walk me through what you have in mind here the next several quarters, and how we can get closer to that 1,000% gain. And again, full disclosure, right? I participated very, very, very early on in a financing with the company, and so as well as that's gone, I think it's early, early days. Let's talk about that NYSE listing a bit, and just what the next several quarters look like and how you plan on increasing that visibility there.
Vincent Metcalfe: Yeah, the NYSE is going to play a lot into rerating the company's valuation to where it should be. We're a new company, so we've got a bit less following both institutionally and from the retail system. So, getting the full NYSE listing is critical, and it's going to be a major catalyst going down the road. So when you look at, say, the eight peers that are closest to Nomad, we are the only one that didn't have an NYSE listing or an AMEX listing.
And what we've seen from our peers over the last two, three years that have been... It's a dramatic impact on liquidity. And what happens with that is that increase in liquidity is over one quarter, two quarters, three quarters, you end up getting included in indices. And when you get included in indices, what happens there is, you get access to the GDXJ, the GDX, and all the various ETFs that follow the royalty sector.
And if there's one thing that we've seen over the last few years is, the growing interest from investors for the royalties sector. And what that means is when you look at, say the eight or nine best peers to Nomad, so starting from with Franco, down to a Metalla or Gold Royalty, all of them have between, I'm going to say 30-40% of passive investing. We're the only one right now that doesn't have that big ETF component. So when that comes in the next few quarters, it should bring a very big influx of new investors to the stock, and obviously a rerating right?
So, that's something to look forward to. And that was obviously one of the main things why we looked at listing on the NYSE. It's a major consideration. It's not something to take lightly because there's more reporting, the listing fees are a bit higher as well. But the main thing is that you have access to such a big, broad investor base. And now, as crazy as it sounds, we’ll be eligible to the Robinhood apps and all these other apps, which prior to that, we didn't have access to these types of investors. So it's just going to bring a lot more liquidity, a lot more investors that will be eligible to buy our stock, and I think that's going to really fuel the valuation higher in the next two quarters.
Gerardo Del Real: I know the answer to this question, but I'll ask it anyway. Are you still on the hunt for active streams and royalties?
Vincent Metcalfe: For sure. I mean, that's what I said in the intro is, as hard as the macro backdrop has been for gold, for us, now is the best time to be hunting, and the best time to be looking at new assets. Because if we're buying assets this year, and we still believe the market's going to turn around and it's going to be a very good gold and silver market in years to come, those assets are going to be priced way higher. So now's the time to be deploying. Now's the time to be making partnerships with new companies and making sure that we get the proper assets under our belts. And then after that, who knows. We could look to M&A, we could merge, buy, sell. The important thing for us is really to deliver that shareholder value. And hopefully, as you pointed out, that 10X.
Gerardo Del Real: Well, I'm looking forward to it. Obviously that requires a bull market. I think Q4 is going to be absolutely phenomenal for the gold price and for the companies that have used this consolidation to add value and to be active in very accretive ways. And again, congrats to you and the team. I'm looking forward to catching up with you at the Beaver Creek Precious Metals Summit here, on September the 8th, and it should be a fun couple of days. It's nice to be back out and about. Anything else to add to that, Vincent?
Vincent Metcalfe: No. I'm really looking forward to seeing you, seeing investors, and going back to some type of normalcy in the next few months, hopefully.
Gerardo Del Real: Excellent. Excellent. Great work. Thanks again, Vincent.
Vincent Metcalfe: Thank you.