Nomad Royalty Company Ltd (TSE:NSR) (OTCQX:NSRXF), a new Canadian royalty and streaming company, reported its inaugural second-quarter results on Friday highlighted by US$6 million in revenue from a growing portfolio of assets.
The Montreal-based company holds a hold a portfolio of 10 royalty, streaming and gold loan assets, five of which are on producing mines.
In May, Nomad executed a reverse takeover that was made up of a vend-in transaction from Orion Mine Finance and Yamana Gold Inc, which each own around 77% and 13% of Nomad’s outstanding shares respectively. Nomad acquired five assets in Africa, Australia and the US as well as a gold loan as part of a US$268 million transaction with Orion and a handful of royalties on Yamana assets in Brazil and Argentina.
READ: The gold sector catches fire around the world, as US$2,000 breached, share prices soar and cash rolls in
Under the vend-in agreements, Nomad had a right to all cash flow generated from the assets included in the vend-in agreements effective January 1, 2020. As a result, Nomad’s 2Q results include results for OMF Fund III (Mg) Ltd (which holds the Bonikro gold stream) starting only from May 27, 2020 onwards.
Orion paid US$8.6 million to Nomad at the closing of the reverse takeover transaction, however, US$5.5 million is reflected directly as income while US$3.1 million is reflected in the statement of cash flows, investing activities as cash acquired and relates to the cash operating margin generated for the revenues from the Bonikro gold stream from January 1 to May 27, 2020.
During its second quarter, Nomad’s portfolio delivered 3,179 ounces of gold, or 4,136 ounces attributable to Nomad including revenues from the Bonikro gold stream that began in January. Silver ounces earned came in at 56,254 for the quarter.
Nomad posted a net income of US$2.3 million and a cash operating margin of US$5.8 million or 96% for the quarter ended June 30, 2020.
"Nomad's inaugural quarterly results were very impressive, and the diversified portfolio showed its strength in minimizing volatility seeing minimal production curtailment, while maintaining exposure to rising commodity prices and generating strong cash flow," CEO Vincent Metcalfe told shareholders in a statement accompanying the results.
Chief investment officer Joseph de la Plante added: “We are experiencing increasing levels of activity, we are extremely excited to keep growing the Nomad portfolio and further diversifying through future acquisitions and investment opportunities.”
The royalty firm recently added to its portfolio a 1% royalty on the nearly 5 million gold equivalent ounce Troilus gold project in Québec operated by Troilus Gold Corporation and snagged a US$50 million revolving credit facility to fund future acquisitions.
Nomad ended the quarter with US$12.2 million in cash.
Contact Angela at firstname.lastname@example.org
Follow her on Twitter @AHarmantas