Nomad Royalty Company (TSX: NSR) announced today that it has entered into a gold purchase agreement with Ivanhoe Mines (TSX: IVN) subsidiary Ivanplats, the owner of the platinum-group-metals Platreef project in Limpopo, South Africa. The transaction has a price tag of US$75.0 million.
The transaction price is part of the US$200.0 million gold stream funding co-invested with Orion Mine Finance. The latter also has a separate $100.0 million palladium and platinum stream agreement on the property, making a total stream funding of US$300.0 million.
Per the terms of the agreement, Nomad Royalty and Orion Mine Finance will make the upfront cash payment of US$200.0 million in exchange for 100% of payable gold production until 350,000 ounces have been delivered. From this, 37.5% of the production is attributable to Nomad Royalty.
The first US$50.0 million is expected to be paid at the closing of the transaction while the remaining US$150.0 million is scheduled during H2 2022. Nomad Royalty is expected to pay its share of the funding proportionately.
After hitting the 350,000-ounce production milestone, the payable gold production goes down to 80% until 685,280 ounces have been delivered, with 30% attributable to Nomad Royalty. Afterward, the purchasers are expected to get 5% of the payable gold production.
The gold stream will be based on all recovered gold at the property, subject to 80% fixed gold payability.
The stream purchasers are expected to make ongoing payments of US$100.00 per ounce or the gold price market, whichever is lower, and then 80% of the spot gold price for each ounce after the 685,280-ounce mark.
The US$300.0 million total gold stream funding is expected to finance a large portion of the property’s phase 1 development as it targets its initial production in 2024. Expected throughput at this point would be 0.7 million tonnes per annum, anticipated to ramp up to 5.2 million tonnes per annum by 2030.
In October, the company purchased 5.938% of the gold production of the Greenstone gold project for US$95.0 million.
Nomad Royalty last traded at $9.45 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
