Nomad Royalty Company Ltd (TSE:NSR) (FRA:IRLB) has posted strong third-quarter results, which saw it increase net income and revenue, and allowed the firm to declare another dividend payment, which will be paid in January next year.
For the three months to end September 2020, the rapidly growing precious metals royalty group posted net income of US$0.5 million, compared to US$0.4 million in the same period in 2019. Revenue came in at a record US$7.6 million, up from US$4.3 million in the same quarter of last year, made up from sales of gold and silver ounces.
Nomad has a portfolio of 12 royalty and stream assets, six of which are on currently producing mines, and it earned from the sale of 3,100 gold ounces in the quarter and 52, 616 silver ounces. The firm purchases rights to a certain percentage of the gold and silver generated from a mine.
“Given our strong free cash flow outlook, during the third quarter we were pleased to announce our inaugural dividend policy,” Vincent Metcalfe, chief executive and chairman, told investors in a statement.
“The strong gold environment will allow us to continue to generate strong free cash flow while reinvesting in new opportunities that will support further growth and returns to shareholders.”
The firm announced a dividend of C$0.005 per Nomad share, which will be paid on January 15, 2021, to shareholders of record as of December 31, 2020.
In August this year, the firm had outlined its inaugural dividend policy, declaring a first quarterly payment of C$0.005 per share, which was payable on October 15 this year. The company has adopted an annual dividend policy of C$0.02 per share, to be paid quarterly.
For the third quarter, the cash operating margin was US$6.5 million versus US$4.2 million in 3Q, 2019. As at end September, the firm held cash of US$15 million.
Other highlights of the quarter included the closing, on July 31, of the acquisition of a 1% net smelter return (NSR) royalty on the Troilus gold project in Québec and, on September 28, it closed the acquisition of Valkyrie Royalty Inc, a private royalty company that owned an NSR royalty on the Moss gold mine in Arizona, USA for a total share consideration of around US$8.9 million.
Turning to an update on its assets, Nomad noted that in the last six months, gold production at the Moss mine has consistently increased month-over-month.
In addition, in October, Troilus Gold has filed a preliminary economic assessment (PEA) on its Troilus gold project, which supports a combined open pit and underground mining operation with low initial capital costs and high rate of return for a 35,000 tonne per day operation over a 22-year mine life.
Gold output is projected at 220,000 ounces average per year for the first five years and 246,000 ounces average per year for the first 14 years.
Elsewhere, at Nomad’s Gualcamayo gold royalty in Colombia, operator Mineros S.A. has said it is investing US$8 million annually in near-mine exploration and infill drilling to increase mine life. Only 20% of the 20,000-hectare land package has been explored.
Shares zipped up 1.50% to C$1.35 in Toronto
—Updates for share price—
Contact the author at [email protected]
Published at Tue, 10 Nov 2020 16:00:00 +0000-Nomad Royalty underlines portfolio strength as it posts increased income and revenue in third quarter