TSXV: NOVR
OTCQB: NOVRF
(All dollar amounts are in United States Dollars unless otherwise
indicated)
VANCOUVER, BC, March 13,
2023 /CNW/ - Nova Royalty Corp.
("Nova" or the "Company") (TSXV: NOVR) (OTCQB: NOVRF)
is pleased to announce that it has entered into an agreement (the
"Agreement") with an arm's length private party (the
"Seller") pursuant to which Nova will acquire an additional
0.03% net smelter return ("NSR") royalty (the "Additional
Royalty"), on the Copper World Complex project ("Copper
World') located in Arizona,
USA, owned by Hudbay Minerals Inc. ("Hudbay") (TSX:
HBM) (NYSE: HBM), (the "Transaction"). Nova will now hold a
0.165% NSR royalty on Copper World and Nova's right of first
refusal in respect to an additional 0.540%, as detailed in its news
release dated January 10, 2022, will
reduce to 0.510% NSR upon completion of the Transaction.
Alex Tsukernik, Nova's President
and CEO, commented, "We are pleased to have increased our
royalty position on the Copper World Complex. Copper World
represents one of the largest and most strategic copper districts
in the United States, and is being
steadily advanced by Hudbay Minerals toward a construction
decision."
Transaction Highlights
- Increases Nova's royalty interest ahead of near-term
development milestones at Copper World, with Hudbay continuing to
de-risk Copper World ahead of a potential construction decision
- Repeat transaction with royalty owner, with significant upfront
share component, further strengthens long-term relationship
- Continued support by Beedie Capital, Nova's largest
shareholder
Transaction Details
The Additional Royalty has the same characteristics as the
0.135% royalty on Copper World already owned by Nova and covers all
metals, including copper, molybdenum, silver, and gold extracted
from the majority of mining claims covering Copper World. The
aggregate purchase price for the Transaction is $1,400,000 and will be paid as follows:
- $340,000 in cash, payable upon
closing of the Transaction
- $170,000 in common shares of Nova
(the "Consideration Shares"), payable upon closing
- $150,000 in cash, payable 12
months after closing of the Transaction; and
- $740,000 in cash, payable at the
later of: (i) 12 months following the announcement of the
commencement of production from the Royalty Area; and (ii) the
receipt by Nova of the first three payments under the Royalty
The number of Consideration Shares to be issued in connection
with the Transaction will be based on the 20-day volume weighted
average trading price on the TSX Venture Exchange ("TSXV")
of Nova's common shares prior to the announcement date of the
Transaction.
Nova retains a right of first refusal to acquire an additional
0.510% NSR on Copper World.
Beedie Financing
Nova also announces that it will draw down (the
"Drawdown") an additional C$1.5
million under its existing amended and restated convertible
loan facility with Beedie Capital (the "Beedie Capital
Facility"), the terms of which are disclosed in the Company's
news release dated February 10, 2021.
The proceeds from the Drawdown will be used to fund royalty
acquisitions and for general corporate purposes. The Drawdown will
increase the total amount drawn under the Beedie Capital Facility
to C$9.5 million, with an additional
C$15.5 million remaining available to
the Company.
The Drawdown is convertible by Beedie Capital into 840,241
common shares of the Company at a conversion price of C$1.7852 per common share which is based on a 20%
premium above the 30-day volume-weighted average price of the
common shares of Nova on the TSXV calculated up to and including
March 9, 2023, in accordance with the
terms of the Beedie Capital Facility (the "Conversion
Shares").
Beedie currently owns approximately 10.0 million common shares
of Nova, having increased its position in the Company by
approximately 1.0 million common shares since December 31, 2022.
In addition, Nova has entered into an amendment to the Beedie
Capital Facility to accrue the interest for the period from
October 1, 2022 to September 30, 2023 to principal at an interest
rate of 8.5% for that period. Under the amended agreement, Nova
will begin to pay cash interest on its outstanding principal for
the period commencing on October 1,
2023 (the "Beedie Amendment") at which point the
interest rate will revert to 8.0% as per the original Beedie
Capital Facility.
The transactions disclosed in this news release are subject to
the acceptance of the TSXV.
About Nova
Nova is a royalty company focused on providing investors with
exposure to the key building blocks of clean energy – copper and
nickel. 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 TSXV under the trading symbol "NOVR" and on the US
OTCQB under the ticker "NOVRF".
On Behalf of Nova Royalty Corp.,
(signed) "Alex Tsukernik"
President and Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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 information
in this press release includes, but is not limited to, exploration
and expansion potential, production, recoveries and other
anticipated or possible future developments on the Copper World
project, current commodity prices, the payment frequency of the
Additional Royalty, current and potential future estimates of
mineral reserves and resources; future commercial production from
the Copper World project or other designated areas; and the
attainment of any required regulatory approval to the acquisitions
of the Additional Royalty, the Drawdown, and the Beedie Amendment.
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, the
risk factors set out under the heading "Risk Factors" in the
Company's annual information form dated April 29, 2022 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.