TSXV: NOVR
OTCQB: NOVRF
VANCOUVER, BC, May 18, 2023
/CNW/ - Nova Royalty Corp. ("Nova" or the
"Company") has reported its financial results for the first
quarter ended March 31, 2023. Nova's
financial statements and management's discussion and analysis for
the three months ended March 31, 2023
are available on Nova's website at www.novaroyalty.com and on SEDAR
at www.sedar.com.
Q1 2023 and Subsequent
Highlights:
- Quarterly revenue: Nova recognized revenue of
$591,851 from its royalty interests,
primarily related to Aranzazu. This was the second highest
quarterly revenue on record for Nova.
- Increased Copper World royalty: In April 2023, Nova increased its exposure to Hudbay
Minerals' Copper World project, a Tier-1 development asset located
in Arizona. Nova now owns a 0.165%
NSR royalty on Copper World and retains a right of first refusal in
respect to an additional 0.510%.
- Progress of portfolio assets: Several key development
assets on which Nova holds royalties made meaningful progress
toward construction decisions. First Quantum, Lundin and Hudbay
continued to progress engineering and permitting at Taca Taca,
Josemaria, and Copper World, respectively. In February 2023, Los Andes Copper announced the
results of a pre-feasibility study ("PFS") and maiden
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.
- Senior management changes: On May
16, 2023, the Company announced the departure of
Alex Tsukernik as CEO and President,
and appointed Hashim Ahmed as
Interim CEO and Bill Tsang as
Interim CFO.
- Director changes: On May 17,
2023, the Company announced that Douglas Silver, Johanna
Fipke and Andrew Greville
resigned from the Board of Directors.
- Retained PI Financial as financial advisor: On
May 17, 2023, the Company announced
that it had engaged PI Financial as its financial advisor to
commence a process to explore, review and evaluate all options that
may be available to the Company to maximize shareholder value.
Hashim Ahmed, interim CEO of Nova
commented, "Nova generated significant momentum in the first
quarter of 2023. We saw excellent operational performance at
Aranzazu and are encouraged by the steady progress on the core
assets underlying our royalty interests as the operators continue
to advance them toward construction decisions. We remain focused on
building a generational copper and nickel royalty portfolio and
continue to advance a full pipeline of exciting acquisition
opportunities."
Asset update
Aranzazu
Aura Minerals Inc. ("Aura") disclosed
that Aranzazu produced 12.3 million copper equivalent
("CuEq") pounds ("lbs") during Q1 2023. CuEq production was
3% lower than in Q1 2022 and 10% lower than in Q4 2022 as a result
of mining slightly lower grade gold and copper areas, in accordance
with Aranzazu mine planning(1).
Nova recognized $0.6 million in
revenue during Q1 2023, compared to $0.7
million in Q1 2022 and $0.5
million in Q4 2022, attributable to the Aranzazu
royalty.
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 a 20,000 metre drill program is planned for 2023 to focus on
the geological potential of new mineralized zones, such as
Cabrestante, El Cobre, and Limestone Bridge(1).
Aura last reported proven and probable mineral reserves at
Aranzazu as of December 31, 2022 of
9.6 million tonnes at 1.23% copper, 0.81 g/t gold and 17.61 g/t
silver(2).
Taca Taca
First Quantum Minerals Ltd. ("First Quantum") continued
to conduct pre-development and feasibility activities at Taca Taca
during Q1 2023. 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. 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. First Quantum expects an additional
environmental permit related to the proposed bypass and access road
construction for Taca Taca to be approved in 2023. Additionally,
First Quantum reported that water supply studies and pump tests to
support the application for a concession for borefield water supply
advanced steadily in 2022 and are expected to be completed in 2023.
First Quantum expects to file water permit applications
progressively in 2023(3).
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 (formerly Copper World and Rosemont)
Hudbay Minerals Inc. ("Hudbay") previously 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(5).
Hudbay reported that it expects to receive these two remaining
state permits in 2023(6).
Hudbay reported that, in March
2023, it received confirmation from the Army Corps of
Engineers ("ACOE") that its previous surrender of the
Section 404 Clean Water Act permit for the former Rosemont project (the "404 Permit") was
formally accepted and revoked, as requested. The ACOE also
reaffirmed the validity of the March
2021 approved jurisdictional determinations, whereby the
ACOE determined there are no waters of the U.S. in the area
submitted for analysis, which is consistent with Hudbay's internal
studies that also contemplate the full Copper World Complex area.
Hudbay reported that it surrendered the 404 Permit to the ACOE in
April 2022, as there is no evidence
of jurisdictional waters of the U.S. on the former Rosemont project site. In May 2022, Judge Soto from the U.S. District Court
for the District of Arizona issued
a favourable ruling that affirmed Hudbay's surrender of the 404
Permit was effective and that the new Copper World Complex project
is not connected to the previous federal permitting
process(6).
Hudbay also reported that, in May
2023, the Arizona Corporation Commission approved an
amendment to the Certificate of Environmental Compatibility
("CEC") authorizing the electric transmission line to site.
The CEC was granted for the former Rosemont project in 2012 and the amendment
removed the requirements for federal permits so that the CEC can be
used to construct the transmission line for the Copper World
Complex(6).
Hudbay reported that it is continuing to advance clearing and
grading work to prepare for the development of the Copper World
Complex. PFS activities for Phase I are well-advanced and Hudbay
reported that it expects to release a PFS in
mid-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).
In April 2023, Nova acquired an
additional 0.03% NSR on the Copper World Complex (the
"Additional Copper World Royalty"). The Additional Copper
World Royalty has the same characteristics as the existing royalty
on the Copper World Complex acquired by Nova in 2022 and covers all
metals, including copper, molybdenum, silver, and gold extracted
from the majority of mining claims covering the Copper World
Complex. Nova now holds a 0.165% NSR royalty on the Copper World
Complex and retains a right of first refusal in respect to an
additional 0.510% NSR royalty on the Copper World Complex.
Hudbay last reported measured and indicated resources at the
Copper World Complex of 1,173 million tonnes at 0.41% copper and
inferred resources at the Copper World Complex of 262 million
tonnes at 0.37% copper. In the preliminary economic assessment
published by Hudbay for the Copper World Complex in June 2022, Hudbay reported that, as compared to
the mineral resources included in a 2017 feasibility study
published by Hudbay for the former Rosemont project, contained copper in measured
and indicated resources at the Copper World Complex increased by
17% and contained copper in inferred resources increased by
328%(7).
Josemaria
As of March 31, 2023, Lundin
Mining Corporation ("Lundin Mining") reported that it is
updating the capital cost estimate and project execution schedule
for Josemaria. Plant engineering was at 39% completion as of
March 31, 2023, including procurement
of long-lead equipment. Early works continue onsite, including
Phase 1 camp construction and internal access road construction,
which were 94% and 84% complete as of March
31, 2023, respectively. A geotechnical drilling campaign
began in March 2023. Lundin Mining
also reported that work continues in water, drilling, permitting
and supply testing, and a program to initiate studies for water
& permit requirements, including water balance and
hydrogeological modelling, is to be incorporated into the bi-annual
environmental impact assessment update submission planned for the
second quarter of 2024. Lundin Mining reported that agreements with
provincial governments regarding access roads, power supply, and
infrastructure funding continue to progress, while progress also
continued on a project union agreement for
construction(8).
Lundin Mining reported that infill drilling and assaying
completed at Josemaria in 2021 and 2022 will be incorporated into
future Mineral Resource and Mineral Reserve estimates published by
Lundin Mining(8).
Additionally, Lundin Mining reported that it intends to spend
approximately US$400 million on
capital expenditures at Josemaria in 2023 in support of advancing
the project prior to a potential construction
decision(9).
Lundin Mining last reported proven and probable reserves at
Josemaria of 1,012 million tonnes at 0.30% copper, 0.22 g/t gold,
and 0.94 g/t silver(10).
Vizcachitas
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%(11).
LAC last reported 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(11).
About Nova
Nova Royalty Corp. is a copper and nickel 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) "Hashim Ahmed"
Interim 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 months ended
March 31, 2023.
|
(2)
|
Refer to Aura Minerals'
Annual Information Form for the year ended December 31,
2022.
|
(3)
|
Refer to First Quantum
Minerals Management's Discussion and Analysis for the first quarter
ended March 31, 2023.
|
(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 three months ended
March 31, 2023.
|
(7)
|
Refer to Hudbay's NI
43-101 Technical Report entitled "Preliminary Economic Assessment
Copper World Complex, Pima County, Arizona USA" prepared by Olivier
Tavchandjian P.Geo, Vice-President, Exploration and Technical
Services, Hudbay. Effective as of May 1, 2022 and filed July 14,
2022.
|
(8)
|
Refer to Lundin
Mining's Management's Discussion and Analysis for the quarter ended
March 31, 2023.
|
(9)
|
Refer to Lundin
Mining's press release titled "Lundin Mining Announces 2022
Production Results & Provides 2023 Guidance" on January 12,
2023.
|
(10)
|
Refer to Lundin
Mining's NI 43-101 Technical Report titled "NI 43-101 Technical
Report, Feasibility Study for the Josemaria Copper-Gold Project,
San Juan Province, Argentina" prepared under the supervision of
Andy Thomas, P.Eng. of SRK Consulting (Canada) Inc., dated November
5, 2020 with an effective date of September 28, 2020.
|
(11)
|
Refer to Los Andes
Copper's NI 43-101 Technical Report Titled "Vizcachitas Project
Pre-Feasibility Study, Valparaiso Region, Chile" prepared by
Severino Modena, (QP) BSc, Mining Engineer, (MAusIMM, Member of
Chilean Mining Commission), General Manager Sudamerica, Tetra Tech,
filed April 1, 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 planned drill program at Aranzazu for
2023; ESIA approval for Taca Taca and the expected timing thereof;
approval of an additional environmental permit for Taca Taca and
the timing thereof; completion of water supply studies and pump
tests by First Quantum to support the application for a concession
for borefield water supply and expected timing thereof; the filing
of water permit applications by First Quantum and the 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 and the timing thereof,
conducting a bulk sampling program and minority joint venture
partner process and the expected timing thereof; the continued work
at Josemaria; the incorporation into the bi-annual EIA update
submission of a program to initiate studies for water and permit
requirements and the timing thereof; the progress of agreements
with provincial governments and of a project union agreement for
construction; the incorporation of infill drilling and assaying
completed in Josemaria in 2021 and 2022 into future Mineral
Resource and Mineral Reserve Estimates; 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 March 23, 2023 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.