- Nova Royalty Corp. (NOVR) has entered a purchase agreement to acquire an existing royalty on the Josemaria Project for $13.7 million
- 50 per cent of the total amount due will need to be paid in cash after Nova has been recorded as the royalty titleholder
- The remaining 50 per cent will be split equally between two other agreed upon milestones
- Nova will draw down an additional $1.5 million under its existing convertible loan facility to fund the advanced $100,000 payment
- Lundin Mining Corporation (LUN) is up 1.31 per cent and is trading at $10.79 per share as of 4:20 p.m. ET
- Nova Royalty Corp. (NOVR) is up 4.78 per cent and is trading at $2.19 per share as of 4:14 p.m. ET
Nova Royalty Corp. (NOVR) is acquiring an existing royalty on the Josemaria Project for $13.7 million.
The agreement is for 100 per cent of the royalty and requires an advanced payment of $100,000.
50 per cent of the total amount due will need to be paid in cash 30 business days following the receipt of notice that Nova has been recorded as the titleholder of the royalty portion with the relevant mining authority.
The remaining 50 per cent owed will be split equally between two other agreed upon milestones.
The project is in Argentina and is owned by Lundin Mining Corporation (LUN). Nova will also be given a right of first refusal (ROFR) in respect to an additional portion of the royalty that will be retained by the sellers after closing the transaction.
The royalty covers a lump-sum payment of $2 million, payable within six months of the completion of the second full year of mine operations, and a 0.5% NPI royalty over Josemaria for a period of 10 years.
Most of the area of the current mineral reserve estimate for Josemaria is covered by the royalty.
In connection with the transaction, Nova will draw down an additional $1.5 million under its existing amended and restated convertible loan facility with Beedie Capital. The company intends to us the funds for the advanced payment for the agreement and for general corporate purposes.
According to Nova, the Josemaria Project’s average annual production is forecasted to be 131,000 tonnes of copper, 224,000 ounces of gold, and 1 million oz of silver at an average total cash cost of US$1.55 per pound of copper equivalent of a 19-year mine life.
Lundin Mining Corporation (LUN) is up 1.31 per cent and is trading at $10.79 per share as of 4:20 p.m. ET.
Nova Royalty Corp. (NOVR) is up 4.78 per cent and is trading at $2.19 per share as of 4:14 p.m. ET.