As the world continues its transition away from many carbon-based forms of energy, so too does the urgency arise for sustainable sources for critical components that go into green technology. Copper and nickel, the irreplaceable building blocks enabling the energy transition, are expected to be in short supply. Investing in a company with direct exposure to these building blocks not only means investing in more sustainable resources but also the future of greener energy.
This transition has grown significantly over the last several years. Mandates from governments, corporations, financial institutions and portfolio companies worldwide have not been shy to demonstrate their desire for a greener world. The rise of Tesla Inc. (NASDAQ:TSLA) is another growth story highlighting the push for greener technology. The company brought in US$8.77 billion in earnings in Q3 alone, which represents a small fraction of the entire electric vehicle market. As critical deposits/components like copper and nickel are forecasted to be leaders in this move, so will the royalty and the mining companies that supply it.
Nova Royalty Corp. (TSXV:NOVR,OTCQB:NOVRF) is a royalty company focused on copper and nickel as the foundational building blocks in clean energy substitution from fossil fuels. As a first-mover in this renewable energy space, Nova is on course to becoming a leading royalty company in the transition to the future of sustainable energy. With a diversified portfolio of strategically important and scarce royalty assets operating out of mining-friendly and highly prospective jurisdictions, this company is one to consider.
Nova has been acquiring royalties on copper and nickel in some of the world's most strategic and prolific jurisdictions. In focusing on the highest quality assets and partnering with the world's top miners, the company has made significant strides towards building a foundational portfolio of royalties in key world-class deposits, which are much more scarce than those in gold and silver but also typically feature much higher mine lives. The average copper mine among the world's top 60 has an expected mine life of 77 years based on today's expected depletion dates, and these dates are often pushed back even further.
As a royalty company, Nova has substantially reduced overall risk with a global portfolio of top notch assets. Additionally, a royalty model offers direct exposure and optionality to commodity price appreciation and production increases, while protecting investors from direct operating and exploration costs typically associated with a traditional mining business.
Nova Royalty has acquired royalties in proven projects that have major mining companies leading development and exploration. These operators and their accompanying assets include First Quantum's (TSX:FM) Taca Taca, Teck Resources (TSX:TECK.A,NYSE:TECK) and Newmont's (TSX:NGT) NuevaUnion, Antofagasta's (LSE:ANTO) Twin Metals, Waterton Global's Dumont and Rio Tinto's (ASX:RIO) Janice Lake. With several other exploration assets, Nova Royalty is well prepared for adding new cash flow generating royalties to its roster.
The company raised C$5.85 million in February 2020 at 50 cents per unit for its acquisition of a 2 percent royalty on Teck/Newmont's NuevaUnion project. It subsequently did a direct listing of its shares on the TSX Venture exchange on October 1, 2020, under the ticker NOVR. In conjunction with the listing, Nova secured a US$15 million financing facility from well-known institutional investor Beedie Capital. The company subsequently completed royalty acquisitions on Janice Lake, Taca Taca and Twin Metals and also an equity raise of C$14.4 million at C$1.45 per share in November, 2020. Its shares closed at C$5.66 on the TSX Venture on January 22, 2021, capitalizing Nova on a fully diluted basis at C$440 million.
In January 2021, the company announced that its common shares commenced trading on the OTCQB under the ticker NOVRF. This move provides additional liquidity and increased visibility within the US investment community.
The Nova Royalty management team has years of combined expertise in mining, marketing management and royalty investment. With dedicated prospectors, Nova's team continues to access and acquire top-tier royalty assets from industry leaders all around the world.
Nova Royalty's Company Highlights
- Nova Royalty is a royalty company focused on leveraging the transition to green energy with a direct investment in valuable copper and nickel assets, the building blocks for the energy transition.
- The company has a global investment portfolio with projects spanning strategic jurisdictions in Chile, Argentina, Canada and the US. The region that hosts the Dumont mining project in Quebec has the world's largest emerging reserves of nickel.
- As a royalty company, Nova is exposed purely to revenues and is protected from any direct operating, carrying, exploration, or development costs. It offers optionality on copper/nickel price appreciation and production increase without additional costs.
- Strategic operators in Nova's portfolio include First Quantum, Teck, Newmont, Waterton Global, Antofagasta, Rio Tinto and Transition Metals (TSXV:XTM). The company also has several other exploration royalties.
- Nova Royalty completed a royalty purchase agreement with Sociedad Minera Auromín Limitada to acquire the rights to be granted a 1.0 percent net proceeds royalty on the West Wall copper-gold-molybdenum project for US$4.2 million in cash.
- The company entered into a royalty purchase agreement with Macocozac, S.A. de C.V. to acquire an existing 1.0 percent net smelter return royalty on the Aranzazu copper-gold-silver mine in Zacatecas, Mexico for $9.0 million comprised of $8.0 million in cash and $1.0 million in common shares of Nova.
Nova Royalty's Key Projects
Taca Taca Copper-Gold-Molybdenum Project
This key development project is owned by First Quantum Minerals, one of the world's leading copper producers. This major copper company has helped energize its Taca Taca mining property in Salta province, Argentina and recently said that it is First Quantum's next development priority. The proven and probable reserves currently measure 1.758 billion tonnes at 0.44 percent copper, 0.012 percent molybdenum and 0.09 g/t gold. As exploration continues, there is significant promise for the property for discovering more high-grade base metals.
In November 2020, First Quantum reported a maiden reserve for the property of 7.7 million tonnes of copper. The update also guided to a production decision in 2023-2024 and an initial expect mine life of 32 years with maximum annual production of 275,000 tonnes of copper.
Nova currently holds 0.24 percent NSR on Taca Taca over the entire mining plan of the property and recently announced an acquisition of an additional 0.18 percent NSR.
NuevaUnion Copper-Gold Project
The NuevaUnion copper-gold development project in Chile focuses on the highly prospective copper and gold La Fortuna deposit. In a 50/50 joint venture between operators Teck Resources and Newmont, exploration and development are currently underway of proven and probable reserves. These reserves are calculated at approximately 682 million tonnes at 0.51 percent copper and 0.47g/t gold.
In February 2020, Teck and Newmont announced a US$152 million planned drilling program that would focus on deep extensions of the deposit. The Teck Annual Information Form revealed reserve increases from 557 million tonnes at 0.53 percent copper and 0.48 g/t gold to 682 million tonnes at 0.51 percent copper and 0.47 g/t gold in the same month. This extension is an exciting step for the company and showcases the rapid growth in potential discoveries and yield.
Nova has a 2.0 percent NSR covering all copper royalty revenue from the project's Cantarito block, which comprises approximately 20 percent of the La Fortuna project. Given the deposit's current size and aggressive growth, it is a natural property to bring into production during the upcoming copper cycle. Both Teck and Newmont have the project highly ranked in their development pipelines.
Dumont Nickel-Cobalt Project
Operating out of the Abitibi mining camp in Quebec, Canada, this is a fully permitted, construction-ready project, which hosts the world's second largest nickel reserve at 2.8 million tonnes. In a feasibility study released in mid-2019, findings highlighted the project's large scale, low cost and potentially long life. Nickel production in concentrate rose from 33,000 per annum in Phase One (first five years) to 50,000 tonnes per annum in Phase Two (25 years).
Nova currently holds a 2.0 percent NSR on approximately 21 percent of the deposit.
Twin Metals Copper-Nickel-Platinum Group Metals Project
The Twin Metals nickel and copper project is currently developing base metal and platinum deposits on a highly prospective property located in Minnesota, US. This historically mined jurisdiction's iron ore and taconite mining have been vital to the US economy since the 1800s. The Duluth Complex, where Twin Metals is located, hosts 95% of all US nickel reserves and 34 percent of all copper reserves. In collaboration with operator Antofagasta, the project is currently developing property resources measuring at 1.293 billion tonnes at 0.57 percent copper and 0.18 percent nickel.
Nova currently holds a 2.4 percent NSR on contained copper and nickel metal on a portion of the project that is approximately 18 percent of the highly prospective resource. This royalty is payable at one third of the gross value of copper and nickel.
This project is part of a statewide effort to achieve and operate ethical best practices in the name of sustainability. In September 2020, Twin Metals Minnesota and Minnesota Conservative Energy Forum announced a Clean Energy Partnership that would look into more environmentally friendly mining practices that could prolong the industry's success for years to come.
Janice Lake Copper-Silver Project
The Janice Lake property is 55 kilometers southeast of Key Lake, Saskatchewan, and encompasses a 52 kilometer long district of the Wollaston Copperbelt. With over 20 known occurrences of copper on the property and a safe jurisdiction, the Janice Lake project is strategically positioned for systematic exploration and potentially significant yield.
Nova owns a 1.0 percent NSR on the Rio Tinto (ASX:RIO) owned property with buyback currently set at 0.375 percent for C$750,000. In September 2020, Rio Tinto announced the completion of its summer programming, which included drilling, substantial mapping and the construction of an 80 person camp. The company plans on conducting a diamond drilling program in 2021.
Other Exploration Royalties
- Nub East (British Columbia): 1.00 percent NSR
- Copper King (British Columbia): 1.00 percent NSR
- Pinnacle (British Columbia): 1.00 percent NSR
- Homathko (British Columbia): 1.00 percent NSR
- Dundonald (Ontario): 1.25 percent NSR
- Saturday Night (Ontario): 1.00 percent NSR
- West Matachewan (Ontario): 1.00 percent NSR
- Maude Lake (Ontario): 1.00 percent NSR
- Elephant Head (Ontario): 1.00 percent NSR
- Bancroft (Ontario): 1.00 percent NSR
Alex Tsukernik - President & CEO, Director
Alex Tsukernik co-founded Nova Royalty in 2018. He has over 15 years of experience in metals and mining finance as an executive, investor and corporate adviser. Before Nova Royalty, he spent more than seven years as an independent principal of his own merchant banking/advisory firm, Syntella Partners, at which he focused on creating value-added investment opportunities in the mining space. Before becoming an independent principal, Tsukernik co-founded the Metals and Mining investment banking group at Rodman & Renshaw. He was Director and Head of Metals and Mining and involved with over US$2 billion of completed mergers, acquisitions and capital raising transactions. Tsukernik holds a B.A. in Math and Economics from Cornell University and an MBA from Columbia Business School. He is also a CFA Charterholder.
Brett Heath - Non-Executive Chairman
Brett Heath has a comprehensive career in the structured finance, corporate finance and investment management industry. He is the Founder, President & CEO of Metalla Royalty & Streaming (NYSE: MTA). He was previously the Chairman and CEO of High Stream Corporation before Metalla acquired it in August 2016. High Stream was a specialty streaming and royalty consulting company where Heath worked with First Mining Finance and several other private equity funds, advising and brokering metal streaming transactions. Before that, he was the President of a private streaming company at which he deployed $11 million in four producing streaming transactions in three separate jurisdictions. Heath has held a position as the founding principal of KSIR Capital Management, a hedge fund focused on small and micro-cap mining companies. He also advised several mining companies with KSIR Capital, the corporate finance division of KSIR.
Parviz Farsangi - Chief Technical Advisor
Parviz Farsangi has over 30 years of mining industry experience. He was formerly Executive Vice President and Chief Operating Officer of Vale Inco from 2007 to 2009 and was with Falconbridge Limited from 1987 to 2007 in roles that included General Manager, Sudbury Mines. More recently, he held the positions of President, CEO and Director of Scorpio Mining Corporation.
Farsangi holds a B.Eng. in Mining Engineering from Laurentian University, an M.Eng. in Rock Mechanics and a Ph.D. in Mining Engineering from McGill University, and an Executive MBA from Queen's University. He has served on several mining association boards and is also a director of several TSX listed companies.
Bill Tsang - Chief Financial Officer
Bill Tsang is a Chartered Professional Accountant with a Bachelor of Commerce from the University of British Columbia, with over 10 years of financial accounting and auditing experience in the mineral exploration and mining industry. He has worked in public practice providing professional services and advice to publicly traded companies on the NYSE, TSXV and OTC markets on various public reporting services. Tsang has served as the CFO of several companies listed on the TSXV and OTC markets.
Brian Ferrey - Vice President of Corporate Development & Strategy
Brian Ferrey has been involved with the Company in an advisory capacity since 2018. He brings a broad network and significant experience across capital markets and mining finance and has been involved with over $2 billion in mining royalty and streaming transactions.
Prior to joining Nova, Brian was a Director, in CIBC Capital Markets Investment Banking group in Vancouver , where he specialized in the metals and mining sector. Prior to this, he held positions at Denham Capital Management, where he focused on mining investments in North and South America and at UBS Securities Canada, where he worked concurrently in the Equity Capital Markets and Global Mining Investment Banking groups. Brian holds an Honours Business Administration degree from the Ivey Business School at Western University , where he graduated as an Ivey Scholar.
Greg DiTomaso - Vice President, Investor Relations
Mr. DiTomaso has over 14 years of investor relations and strategic communications experience, predominantly in the mining and energy sectors.
Over the course of his career, Mr. DiTomaso has advised and supported the senior management teams of over 30 publicly-traded companies on their investor relations, transaction communications, and strategic communications efforts. Prior to joining Nova Royalty , Mr. DiTomaso was Senior Director, Capital Markets at NATIONAL Public Relations, and served as Director, Investor Relations for TSX-listed precious metals producer Mandalay Resources Corp. Mr. DiTomaso holds an Honours BA and MA from the University of Toronto , and an MBA from the University of Toronto's Rotman School of Management.
Denis Silva - Non-Executive Director
Denis Silva is a corporate and securities partner at law firm Gowling WLG in Vancouver. He has 11 years of experience in corporate, securities, mining and regulatory legal experience. He has acted for various companies listed on Canadian and US exchanges, focusing on mining. Silva holds a BA from the University of British Columbia, an MPA from Queen's University and an LLB from the University of Windsor.
Andrew Greville - Non-Executive Director
Since 2014, Mr. Greville has been the principal of his own consulting firm, West End Mining & Consulting. From 2005 to 2013, Mr. Greville held multiple roles at Xstrata Copper, including Executive General Manager, Business Development & Strategy, where he was responsible for all M&A activity and coordination of strategic planning. From 2000 to 2005, he was Vice President of Ores & Concentrates for Pechiney World Trade (now Rio Tinto Limited). From 1996 to 1999, he was Vice President, Commercial for BHP Copper North America with commercial responsibility for BHP's North American operations.
E.B. Tucker - Non-Executive Director
E.B Tucker is director of Midas Capital Partners, a capital markets consultancy. He previously held positions including senior analyst and editor of several widely followed financial newsletters. Before launching his own Strategic Investor, he wrote The Casey Report on behalf of Doug Casey, The Bill Bonner Letter and Stansberry's Investment Advisory. He is the author of Why Gold? Why Now? which details the wealth-creating power of mineral royalties. Tucker was a founding partner of KSIR Capital Management, an asset management firm focused on precious metal equities, and KSIR Capital, a corporate finance advisory firm focused on the precious metal industry. Tucker holds a B.Sc. in Business Administration with an area of study in Finance from the College of Charleston in Charleston, South Carolina.
Johanna Fipke - Independent Director
Ms. Fipke is currently a partner at Fasken Martineau DuMoulin LLP, one of Canada's leading law firms, and a core member of their Global Mining Group. Johanna has been recognized for her mining expertise by Lexpert, Who's Who Legal, the Best Lawyers in Canada and the Legal 500. Ms. Fipke is also a founding and current director of Women in Mining British Columbia. She holds a Bachelor of Law, Bachelor of Commerce and Bachelor of Arts, each with distinction, from the University of Alberta. In 2018, Johanna was chosen as one of the top 100 Global Inspirational Women in Mining.
Adrian Day Asset Management
A native of London, after graduating with honors from the London School of Economics, Mr. Day spent many years as a financial investment writer, where he gained a large following for his expertise in searching out unusual investment opportunities around the world. He has also authored two books on the subject of global investing: International Investment Opportunities: How and Where to Invest Overseas Successfully and Investing Without Borders.
His latest book, widely praised by readers, is Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks (Wiley, 2010).
Mr. Day is a recognized authority in both global and resource investing. He is frequently interviewed by the press, domestically and abroad.
Beedie Capital is the family office investment arm of Beedie, the largest private industrial owner, developer, and property manager in Western Canada
Stephens Investment Management
Stephens Investment Management is a boutique investment firm that manages a family of financial products. The underlying core to their strategy is based on conducting fundamental research on growing companies and sectors. They are long-term investors, with a focus on value-priced growth companies.
Other names (Doug Casey, Peter Schiff)
Management/directors/advisors own ~20%
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