TSXV: NOVR
OTCQB: NOVRF
VANCOUVER, BC, Aug. 10,
2022 /CNW/ - Nova Royalty Corp. ("Nova"
or the "Company") has reported its financial results for the
quarter ended June 30, 2022. Nova's
financial statements and management's discussion and analysis for
the three and six months ended June 30,
2022 are available on Nova's website at www.novaroyalty.com
and on SEDAR at www.sedar.com.
Q2 2022 highlights:
- Quarterly Revenue: The Company recognized royalty
revenue of $0.5 million, primarily
related to the Aranzazu Royalty.
- Secured Right to Acquire Josemaria Royalty: In
May 2022, Nova entered into a
purchase agreement with arms' length private parties (the
"Sellers") pursuant to which Nova has secured the right to
acquire a portion of an existing royalty on the Josemaria
copper-gold-silver project in San Juan, Argentina, owned by Lundin Mining Corporation
("Lundin Mining"). Nova was also granted a Right of First
Refusal in respect to an additional portion of the Josemaria
Royalty.
Subsequent to quarter end:
- Added Guy Elliott to Board of
Directors: In July 2022, Nova
added Guy Elliott to the Company's
Board of Directors as Audit Committee Chair. Mr. Elliott brings a
wealth of valuable experience in financial reporting, internal
controls, financing and related securities filings and compliance
in Canada and the United States.
Alex Tsukernik, President &
CEO of Nova, commented, "During the second quarter of 2022 we
further solidified our foundational portfolio of royalties on the
next generation of major copper projects being actively advanced by
industry-leading operators. In May
2022, we acquired the rights to a royalty on Lundin Mining's
Josemaria copper-gold-silver project, which is one of the most
advanced large-scale copper development projects in the
Americas."
Mr. Tsukernik continued, "Looking at the Nova portfolio, we are
pleased by the continued forward progress of our royalty assets
during the quarter. In addition to continued strength at the
producing Aranzazu mine, many of our key royalty assets – including
Taca Taca, Copper World, Josemaria, and Vizcachitas – were actively
advanced along their respective paths to production. Nova's
concentration of royalties on this group of the most advanced major
copper assets in the Americas positions it very well for the
future."
Mr. Tsukernik concluded, "We enter the second half of the fiscal
year on solid financial footing, and well-positioned to capitalize
on further opportunities in the copper royalty space. We look
forward to updating the market at the appropriate time."
Financial Summary
Nova recognized $0.5 million in
revenue during the second quarter of 2022, compared to $Nil in the
comparative quarter a year ago. The increase in revenue was due to
the Aranzazu Royalty. For Q2 2022, the Company recorded a net loss
of $2.0 million ($0.02 per share), compared to a net loss of
$1.4 million ($0.02) per share in the prior year period. The
loss was largely attributable to higher general and administrative
("G&A") expenses relating to ongoing royalty acquisition
initiatives and personnel recruitment costs, share-based payments,
and interest expenses, which was partially offset by higher revenue
(net of depletion). Excluding share-based payments, G&A during
the period was approximately $1.0 million, compared to
$0.7 million in the comparative
period.
Asset update
Taca Taca
First Quantum continued pre-development and feasibility
activities at Taca Taca during Q2 2022. During the second quarter
of 2021, First Quantum submitted two environmental permits
regarding key infrastructure at Taca Taca. The primary
Environmental and Social Impact Assessment ("ESIA") for Taca
Taca was submitted to the Secretariat of Mining of Salta Province in 2019 and approval of the ESIA
is anticipated in late 2022. First Quantum expects to continue
permitting work at Taca Taca throughout 2022, in addition to
engaging with government regarding key aspects of an administrative
and fiscal regime for investment into Argentina(1).
As of June 30, 2022, First Quantum
last reported proven & probable mineral reserves at Taca Taca
of 1,758.5 million tonnes at 0.44% Copper, 0.09 g/t gold, and
0.012% molybdenum(2).
Aranzazu
Aura Minerals disclosed that Aranzazu sold 11.7 Mlbs copper
equivalent ("CuEq") at cash costs of US$1.61/lb CuEq during Q2 2022. Sales and
production at Aranzazu were in line with Aura's expectations. CuEq
sales were 17% higher than in Q2 2021, but 17% below Q1 2022. Lower
quarterly sales in Q2 2022 were primarily a result of lower grades,
consistent with the Aranzazu mine plan and sequencing aimed to
develop the mine to access higher grade areas for production later
in 2022(3).
Aura Minerals also revised its production guidance for Aranzazu,
moving from 108,000 – 120,000 gold equivalent ounces to 115,000 –
120,000 gold equivalent ounces. On a gold equivalent basis, Aura
reported Q1 2022 production of 30,393 oz and Q2 2022 production of
26,352 oz(3).
As of June 30, 2022, Aura last
reported proven and probable mineral reserves at Aranzazu of 6.4
million tonnes at 1.38% copper, 0.97 g/t gold and 18.82 g/t
silver(4).
Copper World Complex
Hudbay released the results of the Copper World Complex
preliminary economic assessment ("PEA") during Q2 2022,
which includes the recently discovered Copper World deposits along
with the Rosemont deposit. The PEA
contemplates a two-phase mine plan that has an after-tax net
present value (10%) of US$1,296
million and generates an 18% internal rate of return at
$3.50 per pound copper. Hudbay also
reported a significant increase in copper contained in all mineral
resource categories, as compared to the mineral resources included
in the 2017 feasibility study published by Hudbay for the
Rosemont project.
Hudbay reported that phase I reflects a stand-alone operation on
private land and patented mining claims over a 16-year mine life
with average annual copper production of approximately 86,000
tonnes from mined resources at cash costs and sustaining cash costs
of US$1.15 and US$1.44 per pound of copper, respectively. Phase
II expands mining activities onto federal land and extends the mine
life to 44 years with average annual copper production of
approximately 101,000 tonnes from mined resources at cash costs and
sustaining cash costs of US$1.11 and
US$1.42 per pound of copper,
respectively(5).
Subsequent to quarter end, in July
2022 Hudbay announced that it received approval from the
Arizona State Mine Inspector for its amended Mined Land Reclamation
Plan for the Copper World Complex. Hudbay expects to submit
applications for the other key State and local permits for Phase I
of the Copper World Complex in the second half of 2022.
Hudbay also announced that it would be advancing a
pre-feasibility study ("PFS") for Phase I of the Copper
World Complex, which will focus on converting the remaining
inferred mineral resources to measured and indicated and evaluating
many of the project optimization and upside
opportunities(5).
Josemaria
In April 2022, Lundin Mining
acquired Josemaria through its acquisition of Josemaria Resources.
On April 11, 2022, the mining
authority of San Juan, Argentina
approved the Environmental Social Impact Assessment for Josemaria.
Lundin Mining reported that it is currently advancing commercial
agreements and additional sectoral permits with national and
provincial authorities in Argentina, which it expects to complete in
2022 ahead of a construction decision.
Lundin Mining also reported that it is completing basic
engineering, which is approximately 23% complete, and study work
for an updated technical report, which will include updated cost
estimates and evaluation of potential scope changes compared to
plans envisaged in a feasibility study completed by Josemaria
Resources in November 2020.
Lundin Mining has stated that it expects to publish an updated
technical report in Q4 2022 and intends to spend up to $300 million to advance development of Josemaria.
As part of the technical report update, Lundin Mining reported that
it plans to complete a new Mineral Resource and Mineral Reserve
estimate, which will incorporate approximately 31,200 metres of
drilling that have been completed at Josemaria since the 2020
feasibility study(6).
As of June 30, 2022, Lundin Mining
last reported proven and probable mineral reserves at Josemaria of
1,012 million tonnes at 0.30% copper, 0.22 g/t gold, and 0.94 g/t
silver(7).
Vizcachitas
In March 2022, Los Andes Copper
("LAC") announced a plan to temporarily suspend drilling at
Vizcachitas in response to a Second Environmental Court decree
granting a preliminary injunction on LAC's drilling
activities(8). In July
2022, the Second Environmental Court revised the preliminary
injunction issued in March, allowing drilling activities to
continue at Vizcachitas. LAC previously announced that, prior to
the Second Environmental Court injunction in March 2022, sufficient drilling had been
completed in order to provide an updated resource estimation and
complete a PFS in Q4 2022(9). The Second Environmental
Court's revised decision in June 2022
will allow LAC to pursue its original plan of further delineating
extensions of the mineralized body at Vizcachitas concurrently with
activities related to the PFS. LAC announced that it continues to
target completion of a PFS in Q4 2022(10).
Second quarter 2022 conference call and webcast:
Nova will hold a conference call and webcast with management for
investors and analysts on August 11,
2022 at 12:00 pm ET. Analysts
and investors are invited to participate using the following
dial-in numbers or webcast link:
Participant Number (Local): 416-764-8609
Participant Number (Toll-Free): 888-390-0605
Conference ID: 03117806
Audience URL: https://app.webinar.net/W64Yj3XLgqa
A replay of the conference call will be available until
11:59 pm (ET) August 25, 2022, and can be accessed using the
following dial-in numbers.
Encore (Local): 416-764-8677
Encore (Toll-Free): 1-888-390-0541
Encore ID: 117806#
About Nova
Nova Royalty Corp. is a copper-focused royalty company. Nova has
assembled a portfolio of royalties on a significant proportion of
the next generation of major copper projects located in 1st-tier
jurisdictions, providing investors exposure to some of the most
critical resource assets for the clean energy transition. These
projects are being advanced by the world's premier mining
companies, which include First Quantum, Lundin, Hudbay,
Anglo American and Glencore, among
others. The Company is headquartered in Vancouver, British Columbia and is listed on
the TSX Venture Exchange under the trading symbol "NOVR" and on the
US OTCQB under the trading symbol "NOVRF".
ON BEHALF OF NOVA ROYALTY CORP.,
(signed) "Alex Tsukernik"
President and Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Notes
|
(1)
|
Refer to First Quantum
Minerals 2021 Annual Report, Capital Markets Day Presentation dated
January 2022, and Capital Markets Day Call Transcript, dated
Tuesday, January 18, 2022.
|
(2)
|
Refer to First Quantum
Minerals' NI 43-101 Technical Report Titled "Taca Taca Project,
Salta, Argentina" prepared by David Gray (QP) BSc(Geology),
MAusIMM, FAIG), Group Mine and Resource Geologist, FQM (Australia)
Ltd, filed November 30, 2020.
|
(3)
|
Refer to Aura Minerals'
Management's Discussion and Analysis for the three and six months
ended June 30, 2022.
|
(4)
|
Refer to Aura Minerals'
NI 43-101 Technical Report Titled "Feasibility Study of the
Re-Opening of the Aranzazu Mine, Zacatecas, Mexico" prepared by F.
Ghazanfari, P.Geo. (Farshid Ghazanfari Consulting), filed January
31, 2018.
|
(5)
|
Refer to Hudbay's
Management's Discussion and Analysis for the three and six months
ended June 30, 2022.
|
(6)
|
Refer to Lundin
Mining's Management's Discussion and Analysis for the three and six
months ended June 30, 2022.
|
(7)
|
Refer to Lundin
Mining's NI 43-101 Technical Report Titled "Josemaria Technical
Report" prepared by Mr. Robert McCarthy, P.Eng, filed September 28,
2020.
|
(8)
|
Refer to the press
release titled "Los Andes Copper Announces Plan to Temporarily
Suspend Drilling" published by Los Andes Copper Ltd. on March 21,
2022.
|
(9)
|
Refer to the press
release titled "Los Andes Copper Corporate Update" published by Los
Andes Copper Ltd. on March 29, 2022.
|
(10)
|
Refer to the press
release titled "Los Andes Copper Announces Decision by the
Environmental Court Reinstating Drilling Permit" published by Los
Andes Copper Ltd. on July 21, 2022.
|
Technical and Third-Party
Information
Nova has limited, if any, access to the
properties on which Nova holds a royalty, stream or other interest.
Nova is dependent on (i) the operators of the mines or properties
and their qualified persons to provide technical or other
information to Nova, or (ii) publicly available information to
prepare disclosure pertaining to properties and operations on the
mines or properties on which Nova holds a royalty, stream or other
interest, and generally has limited or no ability to independently
verify such information. Although Nova does not have any
knowledge that such information may not be accurate, there can be
no assurance that such third-party information is complete or
accurate. Some information publicly reported by operators may
relate to a larger property than the area covered by Nova's
royalty, stream or other interests. Nova's royalty, stream or
other interests can cover less than 100% and sometimes only a
portion of the publicly reported mineral reserves, resources and
production of a property.
Unless otherwise indicated, the technical and
scientific disclosure contained or referenced in this press
re-lease, including any references to mineral resources or
mineral reserves, was prepared in accordance with Canadian
National Instrument 43-101 ("NI 43-101"), which differs
significantly from the requirements of the U.S. Securities and
Exchange Commission (the "SEC") applicable to U.S.
domestic issuers. Accordingly, the scientific and technical
information contained or referenced in this press release may
not be comparable to similar information made public by U.S.
companies subject to the reporting and disclosure requirements
of the SEC.
"Inferred mineral resources" have a great
amount of uncertainty as to their existence and great uncertainty
as to their economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral resource will
ever be upgraded to a higher category. Historical results or
feasibility models presented herein are not guarantees or
expectations of future performance.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains "forward-looking
information" and "forward-looking statements" within the meaning of
applicable securities legislation. The forward-looking statements
herein are made as of the date of this press release only, and the
Company does not assume any obligation to update or revise them to
reflect new information, estimates or opinions, future events or
results or otherwise, except as required by applicable law. Often,
but not always, forward-looking statements can be identified by the
use of words such as "plans", "expects", "is expected", "budgets",
"scheduled", "estimates", "forecasts", "predicts", "projects",
"intends", "targets", "aims", "anticipates" or "believes" or
variations (including negative variations) of such words and
phrases or may be identified by statements to the effect that
certain actions "may", "could", "should", "would", "might" or
"will" be taken, occur or be achieved. Forward-looking statements
and information include, but are not limited to, the existence of
future business opportunities; the continuation of permitting work
at Taca Taca throughout 2022; the development of the Aranzazu mine
to access higher grade areas for productions later in 2022; Hudbay
advancing a pre-feasibility study for Phase I of the Copper World
Complex; Lundin Mining publishing an updated technical report on
Josemaria, future gold, silver, and copper prices; other potential
developments relating to, or achievements by the counterparties for
Nova's stream and royalty agreements, and with respect to mines or
other properties Nova has, or may acquire, a stream or royalty
interest; estimates of future productions, costs and other
financial or economic measures; and future expectations regarding
royalties and streams of Nova.
Such forward-looking statements and
information are subject to various known and unknown risks and
uncertainties, many of which are beyond the ability of Nova to
control or predict, that may cause Nova's actual results,
performance or achievements to be materially different from those
expressed or implied thereby, and are developed based on
assumptions about such risks, uncertainties and other factors set
out herein, including, but not limited to, risks associated with
the impact of general business and economic conditions; the absence
of control over mining operations from which Nova will purchase
precious metals or from which it will receive stream or royalty
payments and risks related to those mining operations, including
risks related to international operations, government and
environmental regulation, delays in mine development, construction
and operations, actual results of mining and current exploration
activities, conclusions of economic evaluations and changes in
project parameters as plans are refined; problems related to the
ability to market precious metals or other metals; industry
conditions, including commodity price fluctuations, interest and
exchange rate fluctuations; interpretation by government entities
of tax laws or the implementation of new tax laws; regulatory,
political or economic developments in any of the countries where
properties in which Nova holds a royalty, stream or other interest
are located or through which they are held; risks related to the
operators of the properties in which Nova holds a royalty or stream
or other interest, including changes in the ownership and control
of such operators; risks related to global pandemics, including the
novel coronavirus (COVID19) global health pandemic, and the spread
of other viruses or pathogens; influence of macroeconomic
developments; business opportunities that become available to, or
are pursued by Nova; reduced access to debt and equity capital;
litigation; title, permit or license disputes related to interests
on any of the properties in which Nova holds a royalty, stream or
other interest; the volatility of the stock market; competition;
future sales or issuances of debt or equity securities; use of
proceeds; dividend policy and future payment of dividends;
liquidity; market for securities; enforcement of civil judgments;
and the risk factors set out under the heading "Risk Factors" in
the Company's annual information form dated April 29, 2022 and other filings available for
review on the Company's profile at www.sedar.com.
Such forward-looking information represents management's best
judgment based on information currently available. Except as
required by applicable securities laws, the Company undertakes no
obligation to update these forward-looking statements in the event
that management's beliefs, estimates or opinions, or other factors,
should change. No forward-looking statement can be guaranteed and
actual future results may vary materially. Accordingly, readers are
advised not to place undue reliance on forward-looking statements
or information.
SOURCE Nova Royalty Corp.