Hecla Mining

Nomad Royalty Enters Into Agreement to Acquire a Cash Flowing Royalty on the Moss Gold Mine in Arizona

MONTREAL, Aug. 24, 2020 /CNW/ - Nomad Royalty Company Ltd. ("Nomad" or the "Company") (TSX: NSR) (OTCQX: NSRXF) is pleased to announce that it has entered into a definitive agreement to acquire all of the outstanding shares of Valkyrie Royalty Inc., a private royalty company ("Valkyrie" or the "Vendor") that owns a net smelter return royalty (the "Royalty") on the Moss Gold mine ("Moss Mine" or the "Property") located in Arizona, USA (the "Transaction") for total consideration of approximately $7.6 million (the "Purchase Price"). All amounts in this news release are expressed in United States dollars unless otherwise indicated.

Vincent Metcalfe, Chief Executive Officer of Nomad, commented on the transaction, "The Moss mine is generating strong gold & silver cash flows, holds considerable exploration upside on a district-scale and is located in a stable jurisdiction. In adding this royalty, Nomad further diversifies its portfolio and again strengthens' its global presence by adding Arizona to its list of jurisdictions".

Joseph de la Plante, Chief Investment Officer of Nomad, commented on the transaction, "We are very pleased to welcome many new shareholders of Nomad who will benefit from enhanced liquidity, better access to capital and a robust pipeline of transactions as we continue to grow our business".

Northern Vertex Mining Corp. ("Northern Vertex") is the operator of the Moss Mine, which is targeting production of 55,000 to 65,000 gold equivalent ounces per year. Northern Vertex is currently conducting a 60,000ft drilling program and is aiming to increase the mine life past 10 years.

The acquisition of the Royalty provides Nomad with:

  • A royalty on a producing gold mine in a premium jurisdiction;
  • Immediate cash flow from a low-cost, conventional open pit & heap leach gold mine with considerable production growth potential;
  • Excellent resource expansion potential through strong district-scale exploration; and
  • Increased gold and silver exposure

The Royalty consists of a 0.5-3% net smelter return royalty ("NSR") on all metals and minerals produced from specific claims within the Property as follows:

  • a 1.0% NSR on certain patented lode claims with no other royalty within the Property.
  • a 0.5% overriding NSR on all production within the Property derived from certain patented load claims with other royalty interests.
  • a 3% NSR on any and all production derived from 63 unpatented lode claims within the Property and on public lands within 1 mile of Property's outside perimeter of the present claim boundary.

The Moss mine is located in Arizona, United States, and has been producing since 2018.  The Moss Mine is an open pit gold-silver operation, with a favorable strip ratio of approximately 1.85:1 (waste to ore) and minimal haul distances to the crushing plant.  The ore is processed through crushing, agglomeration and heap leaching followed by processing at the on-site Merrill Crowe metal recovery plant and refinery to produce gold and silver doré bars.  According to the Feasibility Study published in 2015, throughput at the Moss Mine was expected to be 5,000 tonnes per day (tpd), however since commissioning throughput has been significantly higher due to exceptional performance of the crushing plant and operational team, which established a one-day throughput record of 13,000 tonnes. Exploration upside potential at Moss is excellent as the deposit continues to remain open for resource expansion along strike (at both ends) and at depth. On August 6th, 2020, Northern Vertex reported record monthly production of 4,218 gold ounces and 37,171 silver ounces produced, a fourth consecutive monthly production increase for the Moss Mine.

In accordance with the terms of the Definitive Agreement, Nomad will issue 7,400,000 common shares to the shareholders of the Vendor in full satisfaction of the Purchase Price. Red Cloud Securities Inc. is acting as financial advisor to Valkyrie with respect to the transaction.

The Transaction is scheduled to close in September 2020 and is subject to certain conditions including, but not limited to, approval of the shareholders of the Vendor and the approval of the Toronto Stock Exchange. Shareholders owning approximately 51% of the outstanding shares of the Vendor have entered into voting and support agreements in support of the Transaction.

QUALIFIED PERSON

The technical content of this news release has been reviewed and approved by Gustavo Durieux, P. Geo., M. A. Sc., as the Qualified Person.

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 11 royalty, stream, and gold loan assets, of which 5 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.

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 Transaction. 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 Transaction, 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.

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