TSXV: NOVR
OTCQB: NOVRF
(All dollar amounts are in United States Dollars unless otherwise
indicated)
VANCOUVER, BC, May 23, 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 arm's length private parties (the
"Sellers") pursuant to which Nova will acquire an additional
0.12% net smelter return ("NSR") royalty (the "Additional
Royalty"), on the Copper World Complex ("Copper World')
located in Arizona, USA, owned by
Hudbay Minerals Inc. ("Hudbay") (TSX: HBM) (NYSE: HBM), (the
"Transaction"). Nova's consolidated royalty position will be
a 0.285% NSR on Copper World upon closing. Nova retains a right of
first refusal in respect of an additional 0.390% NSR held by the
Sellers, upon completion of the Transaction.
Hashim Ahmed, Nova's Interim CEO,
commented, "We are pleased to increase our NSR royalty once
again on Hudbay's Copper World project. Copper World is a
large-scale, premier copper development asset located in one of
the United States' most strategic
copper districts. We are encouraged by the progress that Hudbay has
made as it continues to steadily advance Copper World toward a
construction decision. Gaining additional royalty exposure to a
long-lived asset such as Copper World further strengthens Nova's
portfolio of high-quality copper and nickel
royalties."
Copper World Highlights
(1)(2)
- World Class Deposit – Nova increases its exposure to a
Tier-1 copper project with Phase I expected average annual copper
production of approximately 86,000 tonnes with first-quartile cash
costs and sustaining cash costs positioning of $1.15 and $1.44 per
pound of copper, respectively.
- Significant Mine
Life – Phase I standalone operation on private land
and patented mining claims over a 16-year mine life with expanded
Phase II mine life of 44 years on federal lands.
- Top Jurisdiction – Copper World is expected to be
one of the next major copper operations in the United States, delivering the copper
needed to meet domestic electrification and decarbonization supply
chain needs.
- Major Operator – Hudbay (C$1.7 billion market capitalization) is an
established mining company with a proven ability to discover,
finance, build and operate low-cost, long-life, cash-generating
assets.
- Near-Term Production – Hudbay expects potential
project sanction decision in 2024, with three-year build
timeline.
Transaction Details
The Additional Royalty has the same characteristics as the
0.165% 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 $5,600,000 and will be paid as follows:
- $1,360,000 in cash, payable upon
closing of the Transaction;
- $680,000 in common shares of Nova
(the "Consideration Shares"), payable upon closing of the
Transaction;
- $600,000 in cash, payable 12
months after closing of the Transaction; and
- $2,960,000 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 date of signing of the
Definitive Agreement.
Transaction Financing
Nova also announces that it intends to finance the initial cash
payment of the Transaction through 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 releases dated February 10, 2021 and March 13, 2023. The Company currently
has C$15.5 million undrawn on the Beedie Capital Facility
for making additional investments subject to the closing
conditions.
The transactions disclosed in this news release are subject to
the acceptance of the TSXV.
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
Phone: (647) 970-4113
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.
Notes:
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(1)
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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.
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(2)
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Refer to Hudbay
Minerals' Presentation titled "Copper World Complex 2022 PEA
Presentation". Dated June 16, 2022.
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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 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 and the drawdown on the Beedie Capital
Facility. 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 March 23, 2023 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.