General Precious Metals
Nomad Royalty (TSX: NSR)(OTC: NSRXF) CEO Vincent Metcalfe on Milestone Gold Stream Deal with Orion Mine Finance on the Greenstone Gold Project in Ontario
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Nomad Royalty, Mr. Vincent Metcalfe. Vincent, how are you today?
Vincent Metcalfe: Very good. Thank you.
Gerardo Del Real: Congratulations. You've been busy, it's been a bit since we caught up. Amongst the many releases, positive releases I should add, a milestone one on the 29th of October, you announced a $95,000,000 gold stream with Orion Mine Finance on the Greenstone Gold Project in Ontario.
And along with that, a life of mine, ESG commitment, which is unique to this deal. And, so I want to let you provide some context and then I have a few follow up questions, but congratulations. I know this is something you've been working on for quite some time. Well done.
Vincent Metcalfe: Yes. Thank you very much. No, absolutely. It's been a very long process. I mean, all these stream agreements take time to complete, but we are obviously very happy to have been able to complete this one. As you mentioned, it's on the Greenstone Gold Project, which is located in Ontario in Canada. It's one of the biggest gold reserves in Canada. It's a big open pit. You could basically call it, Malartic 2.0, or Detour 2.0 in terms of size. So this will become a very significant asset for our partners, Orion and Equinox, which are, are bringing the project to construction, but as you pointed out, it's something that we talked about in terms of structuring a new stream. It was always a very, a top priority for Nomad. And it's something that the market wanted to see from us. We've talked about our expertise and I think this transaction definitely highlights that expertise. And it's the first of many for us as, as our pipeline is, is quite full. And we should see some more news in the near and midterm.
Gerardo Del Real: Let's talk about the ESG component and then I want to get into some of the actual cash costs and what it'll cost Nomad to secure its percentage of the stream. Can you tell me a bit about the emphasis on the ESG aspect of it?
Vincent Metcalfe: So this is from where, what we could see and from our experience is the first, I would say, structure of this sort in the royalty and streaming space. And what we did is we decided to essentially do a life of mine financial commitment from Nomad to make cash payments to the operator. So in this case, it's GGM and Greenstone Gold Mines. And what we're going to do is for every ounce that we receive from the mine, we're going to pay $30 to GGM. And what they're going to do with that $30 is along with it's going to be basically structured between us and them, but what we're going to do is we're going to take that $30 and we're going to reinvest it directly in corporate sustainability programs. So, future environment or community based programs.
And what's great is they all the stakeholders, whether, it's, schools, First Nations, the community, everybody's going to benefit from that. And these community based these environmental programs are really just going to augment… people are going to realize the benefit of mining directly. And, and that's something that we always wanted to be part of. It's one I thing to finance a mine. It's another one to support it through these types of programs. And that's something that was always a very a top priority for Nomad when we created the company. And we're very happy to have that framework now solidified through the stream we announced on Friday.
Gerardo Del Real: And just to be clear on the terms, as I understand them, Nomad will be entitled to delivery of 5.938% of gold production on Orion's 40% until you reach 120,333 ounces. And then it slides to 3.958% of production. Is that accurate?
Vincent Metcalfe: Yeah. So basically we have that full 5.93% for roughly it's basically the first 14 years of the mine plan and that coordinates basically with the mine reserve of 5.5 million. So that's really on what we based our analysis and that's what's great is we based it on the reserve, but there's a tremendous amount of M & I and inferred resources, which are, are all gravy on top of it.
Gerardo Del Real: Excellent. And then the way that I understand it, you're paying 20% of the spot gold price for each ounce of refined gold that's delivered under the gold stream. Right?
Vincent Metcalfe: Correct.
Gerardo Del Real: Wonderful. No, look, congratulations. It's structured very well. It's one of those deals where you can see the upside for everybody. And I don't think it's a coincidence that the market is embracing it and reacting to it the way that it is. I understand you're in New York right now, as we speak meeting with several funds, right?
Vincent Metcalfe: Yeah, we couldn't have asked for a better reception. As I mentioned earlier, this is something that the market wanted to see. And now that we've executed on it, it's the first of many deals to come down the pipeline. And that really puts Nomad into a very different section of the sector. We came to market basically a year and a half ago.
And then we saw a lot of other royalty and junior co’s kind of follow suit, but this is the kind of deal that puts us into a very different league. So we've got the senior companies in the mid-caps and we're right in the middle of that now. And because there's not a lot of companies our size that are able to do these types of deals and it really highlights the difference of Nomad versus some of our peers. And again we, most importantly also is that this is a $95 million deal, but we have more capacity to keep building. Not a lot of companies have our cash flow profile and have the possibility of, of adding assets like this. So, we're, we're one of, probably four or five companies that would've been able to execute on this. And we're very, very happy to have done it and at a good price for the shareholders as well.
Gerardo Del Real: Well, I know you just announced your preliminary Q3, 2021 deliveries and the numbers there were excellent. This obviously is near term production for Nomad. Exciting exciting news. Vincent, thank you so much. Anything else that you'd like to add to that?
Vincent Metcalfe: Just keep following the news, because there's a lot more coming.
Gerardo Del Real: I like it. I'll let you get back to it. Thanks again.
Vincent Metcalfe: Thank you very much.