TSXV: NOVR
OTCQB: NOVRF
VANCOUVER, BC, March 23,
2023 /CNW/ - Nova Royalty Corp. ("Nova"
or the "Company") has reported its financial results for the
fourth quarter and year ended December 31,
2022. Nova's financial statements and management's
discussion and analysis for the three months and year ended
December 31, 2022 are available on
Nova's website at www.novaroyalty.com and on SEDAR at
www.sedar.com.
Full year 2022 and early 2023 highlights:
- Revenue: for the year ended December 31, 2022, Nova recognized revenue of
$2.0 million from its royalty
interests, primarily related to Aranzazu reaching record production
in multiple quarters.
- Acquired exposure to two advanced, Tier-1 copper
projects: In 2022, Nova acquired a royalty on Hudbay Minerals'
Copper World Complex and secured the right to acquire a net profit
interest royalty on Lundin Mining's Josemaria project. Nova
subsequently increased its royalty interest in Copper World in
March 2023.
- Achieved critical mass among advanced, Tier-1 copper
assets: Nova now has exposure to 5 of the top 10 open pit
copper development projects in the Americas by mineral reserves;
three of those projects: Taca Taca (First Quantum), Lundin Mining
(Josemaria), and Copper World (Hudbay Minerals) are expecting
construction decisions by their operators in 2024-2025.
- Continued progress of portfolio assets: Key development
assets on which Nova holds royalties showed strong advancement
toward construction decisions in 2022 with First Quantum, Lundin
and Hudbay making significant engineering and permitting progress
at Taca Taca, Josemaria, and Copper World, respectively. In
February 2023, Los Andes Copper
announced the results of a maiden pre-feasibility study
("PFS") and mineral reserve for the Vizcachitas project,
showing an initial mine life of 26 years, average annual production
of 183,017 tonnes of copper for the first 8 years, an IRR of 24%,
and a post-tax NPV of $2.8
billion.
- Bolstered Board and Management: Announced the addition
of Douglas Silver to Nova's Board of
Directors and the appointment of Hashim
Ahmed as Nova's CFO in February
2023; Mr. Ahmed's transition into the CFO role is expected
to be effective at the start of the second quarter of 2023.
Alex Tsukernik, President &
CEO of Nova, commented, "Nova is off to an excellent start in 2023.
We have a full pipeline of acquisition opportunities, our core
assets are showing strong progress toward production, and we have
enhanced our team for the next stage of the Company's growth. I
look forward to updating the market on our progress."
Asset update
Aranzazu
Aura Minerals Inc. ("Aura") disclosed
that Aranzazu sold 13.8 million lbs copper equivalent
("CuEq") at cash costs of US$1.47/lb CuEq during Q4 2022. CuEq sales were
14% higher than in Q4 2021 and 9% higher than in Q3 2022. For
the year ended December 31, 2022,
Aura reported that Aranzazu sold 52.3 million lbs CuEq at cash
costs of US$1.51/lb CuEq. CuEq sales
were 16% higher than for the year ended December 31, 2021, reflecting a full year of
operations at expanded throughput capacity(1).
Nova recognized $0.5 million in
revenue during the fourth quarter of 2022, compared to $0.5 million in the comparative quarter in 2021,
attributable to the Aranzazu royalty. For the full year ended
December 31, 2022, Nova recognized
$2.0 million in revenue, compared to
$0.7 million in 2021, with the
increase primarily related to an increase in revenue from a full
year of the Aranzazu NSR.
Aura reported that it expects to produce between 101,000 –
116,000 gold equivalent ounces ("GEO") at Aranzazu during
2023. Aranzazu produced 111,531 GEO during the year ended
December 31, 2022. Additionally, Aura
reported that it is advancing several promising targets near
existing mine workings to expand the life of mine at Aranzazu,
including at the Glory Hole Zone, El Cobre, Limestone Bridge and
Cabrestante. Aura expects to continue infill drilling and
additional geological work at these target areas in
2023(1).
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(2).
Taca Taca
First Quantum Minerals Ltd. ("First Quantum") continued
to conduct pre-development and feasibility activities at Taca Taca
during Q4 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 2023. Water supply studies
and pump tests to support the application for a water permit
advanced steadily in 2022 and are expected to be completed in early
2023. In November 2022, the Salta
Production Minister signed Resolution 191/2022, approving the
environmental pre-feasibility for the Taca Taca 345 kilovolt power
line development. The power line development still requires
detailed construction permits, but the main environmental aspects
of its development have been approved(3).
As of December 31, 2022, First
Quantum last reported proven and 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(4).
Copper World Complex
Hudbay Minerals Inc. ("Hudbay") reported that, on
September 21, 2022, an application
for an Aquifer Protection Permit was submitted to the Arizona
Department of Environmental Quality ("ADEQ"), and on
October 21, 2022, an application for
an Air Quality Permit was submitted to the ADEQ. Hudbay reported
that it expects to receive these two remaining state permits in
2023. Copper World requires state and local permits for Phase I.
Hudbay reported that the other key state permit, the Mined Land
Reclamation Plan, was received in 2022(5). In
January 2023, Hudbay received an
approved right-of-way from the State Land Department that will
allow for infrastructure such as roads, pipelines, and powerlines
to connect between properties in Hudbay's private land package at
Copper World(6).
Hudbay reported that it is continuing to advance pre-feasibility
activities for Phase I of the Copper World Complex, which is
expected to include conversion of inferred mineral resources to
measured and indicated, optimization of the layout and sequencing
of the processing facilities, and the evaluation of other upside
opportunities. Pre-feasibility level engineering for the main
processing facility, as well as geotechnical and hydrogeological
site investigation activities were completed by December 31, 2022. Metallurgical test work
continued into 2023, the results of which are being analyzed as
part of Hudbay's concentrate leaching tradeoff evaluations. Hudbay
expects to release a pre-feasibility study ("PFS") in the
second quarter of 2023(6).
Upon receipt of state permits, Hudbay reported that it expects
to conduct a bulk sampling program to continue to de-risk the
Copper World Complex by testing grade continuity, variable cut-off
effectiveness, and metallurgical strategies. Hudbay also reported
that, following receipt of the state permits, Hudbay intends to
initiate a minority joint venture partner process, which will allow
the potential joint venture partner to participate in definitive
feasibility study activities in 2024(6).
Josemaria
Lundin Mining Corporation ("Lundin Mining") reported that
the Josemaria project team is working with national and provincial
authorities in Argentina to
progress the project through the next stages of development and
associated approvals. Lundin Mining also reported that it is
advancing work towards a baseline capital cost estimate and project
execution schedule. Plant engineering, including procurement of
long-lead equipment, is ongoing, and was 38% complete as of
December 31, 2022. Early works
continue onsite, including the preparation of platforms for the
camp, commissioning of additional fuel storage, and expansion of
the existing camp. Pre-construction early works including internal
access roads and the completion of phase 1 of a new camp were also
advanced during 2022. Lundin Mining reported that it submitted the
environmental impact assessment for a new power line, while
permitting works and agreements regarding power supply, concentrate
logistics, infrastructure funding and a project construction union
agreement continue to progress(7).
Lundin Mining reported that it spent US$237.4 million at Josemaria during 2022 and
intends to spend approximately US$400
million at Josemaria during 2023. Additionally, Lundin
Mining reported that approximately 30,600 meters of drilling has
been completed at Josemaria since a 2020 Mineral Resource and
Mineral Reserve Estimate was published by Josemaria Resources, the
results of which will be incorporated into a new estimate to be
published by Lundin Mining(7).
As of December 31, 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(8).
Vizcachitas
On September 29, 2022, Los Andes
Copper ("LAC") announced that it continued to advance the
PFS for the Vizcachitas project. Initial resource modelling for
mine plan optimization work on general engineering, infrastructure
planning, plant design, and environmental considerations are all
ongoing. LAC reported that it expects to resume drilling in Q4
2022, with the objective of expanding resources at Vizcachitas
beyond those currently being considered in the
PFS(9).
On February 23, 2023, LAC
announced the results of a positive PFS and a maiden reserve
estimate at Vizcachitas. The PFS contemplates conventional open pit
mining, crushing, grinding and flotation to produce a copper-silver
concentrate and molybdenum concentrate product. Over an initial
26-year mine life, average annual production is forecast to be
152,883 tonnes of copper at C1 cash costs of US$1.25/lb Cu, with average annual production of
183,017 tonnes of copper at C1 cash costs of US$0.93/lb Cu over the first 8 years. The PFS
contemplates an after tax US$2.8
billion NPV8% and IRR of 24%(10).
On February 23, 2023, LAC also
announced an initial proven and probable mineral reserves for
Vizcachitas of 1,220 million tonnes at 0.36% copper, 136 ppm
molybdenum and 1.1 g/t silver. LAC also reported measured &
indicated resources at Vizcachitas of 1,541 million tonnes at 0.38%
copper, 155 ppm molybdenum, and 1.1 g/t silver(10).
Financial summary
For Q4 2022, the Company recorded a net loss of $1.9 million or $0.02 per share, compared to a net loss of
$5.2 million or $0.06 per share for Q4 2021. The reduced net loss
relative to the fourth quarter of 2021 was largely attributable to
a lower general and administrative ("G&A") expense,
lower share-based payments expense, and a $2.7 million impairment on the Twin Metals
royalty, which was incurred in Q4 2021.
For the year ended December 31,
2022, the Company recorded a net loss of $7.9 million or $0.09 per share, compared to a net loss of
$9.4 million or $0.12 per share for the year ended December 31, 2021. The reduced net loss relative
to the year ended December 31, 2021
was largely attributable to higher royalty revenue recognized from
the Aranzazu NSR that offset higher depletion and G&A expenses,
and due to the Twin Metals royalty impairment recorded in 2021. Net
cash used in operating activities for the year ended December 31, 2022 was $2.1
million.
Fourth quarter and full year 2022 conference call and
webcast:
Nova will hold a conference call and webcast with management for
investors and analysts on March 24,
2023 at 11:00 am 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: 24673979
Audience URL: https://app.webinar.net/WdgZo2GE5MO
A replay of the conference call will be available until
11:59 pm (ET) April 7, 2023, and can be accessed using the
following dial-in numbers.
Encore (Local): 416-764-8677
Encore (Toll-Free): 1-888-390-0541
Encore ID: 673979#
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 Mining, 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 Aura Minerals'
Management's Discussion and Analysis for the three and twelve
months ended December 31, 2022.
|
(2)
|
Refer to Aura Minerals'
Annual Information Form for the year ended December 31,
2021.
|
(3)
|
Refer to First Quantum
Minerals Management's Discussion and Analysis for the fourth
quarter and year ended December 31, 2022.
|
(4)
|
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, amended and restated March 30,
2021.
|
(5)
|
Refer to Hudbay's
Management's Discussion and Analysis for the three and nine months
ended September 30, 2022.
|
(6)
|
Refer to Hudbay's
Management's Discussion and Analysis for the year ended December
31, 2022.
|
(7)
|
Refer to Lundin
Mining's Management's Discussion and Analysis for the year ended
December 31, 2022.
|
(8)
|
Refer to Lundin
Mining's press release titled "Lundin Mining to Acquire Josemaria
Resources, Meaningfully Increasing Copper and Gold Growth Profile"
published by Lundin Mining on December 20, 2021.
|
(9)
|
Refer to the press
release titled "Los Andes Copper Project Update" published by Los
Andes Copper Ltd. on September 29, 2022.
|
(10)
|
Refer to the press
release titled "Los Andes Copper Announces Positive PFS for
Vizcachitas with a US$2.77 Billion Post-Tax NPV and 24% IRR".
Published by Los Andes Copper Ltd. on February 23, 2023.
|
Technical and Third-Party Information
Nova has limited, if any, access to the properties on which
Nova holds a royalty, stream or other interest. The Company may
from time to time receive operating information from the owners and
operators of the mining properties, which it is not permitted to
disclose to the public. Nova is dependent on (i) the operators of
the mining properties and their qualified persons to provide
information to Nova, or (ii) publicly available information to
prepare disclosure pertaining to properties and operations on the
properties on which Nova holds royalty or other interests, 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
reported public information in respect of a mining property may
relate to a larger property area than the area covered by Nova's
royalty or other interest. Nova's royalty or other interests may
cover less than 100% of a specific mining property and sometimes
may only apply to a portion of the publicly reported mineral
reserves, mineral resources and or production from a mining
property.
Unless otherwise indicated, the technical and scientific
disclosure contained or referenced in this press release,
including any references to mineral resources or mineral
reserves, was prepared in accordance with Canadian National
Instrument 43-101 Standards of Disclosure for Mineral Projects
("NI 43-101"). Canadian standards for public disclosure
of scientific and technical information concerning mineral projects
differ significantly from the requirements of the U.S. Securities
and Exchange Commission under subpart 1300 of Regulation S-K (the
"SEC Modernization Rules"). Nova is not currently subject to
the SEC Modernization Rules. 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. Modernization Rules.
"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.
Qualified Person
Technical information contained in this press release originates in
the public disclosure set out above and has been reviewed and
approved by Christian Rios, AIPG
Certified Professional Geologist, Advisor to Nova and a Qualified
Person as defined in NI 43-101.
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, statements with
respect to future events or future performance of Nova; the
existence of future business opportunities; the expected production
at Aranzazu in 2023; the advancement of several promising targets
near existing mine workings to expand the life of mine at Aranzazu;
continuation of infill drilling and additional geological work at
target areas in 2023; ESIA approval for Taca Taca and the expected
timing thereof; completion of water supply studies and pump tests
by First Quantum and expected timing thereof; obtaining of
construction permits for the power development line at Taca Taca;
obtaining state and local permits for Copper World and expected
timing thereof; the continued advancement of pre-feasibility
activities for Phase I of the Copper World Complex and timing
thereof; the release of a pre-feasibility study for Phase I of the
Copper World, conducting a bulk sampling program, minority joint
venture partner process expected timing thereof; Lundin Mining's
activities and the total expected spend for Josemaria; LAC's plan
to resume drilling and expected timing thereof; the expected
production at Vizcachitas; 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; disclosure regarding any payments to be paid to Nova by
property owners or operators of mining projects pursuant to net
smelter returns and other royalty agreements; 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 (COVID-19) 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.