Acquisition Highlights
- Acquisition of a premier, uncapped sliding-scale 1.00% to 2.25% net smelter return ("NSR") royalty on
Nevada Gold Mines' Robertson property located inNevada, USA (the "Robertson Property"), which forms part of the greater Cortez & Pipeline mining complex. Based on the current gold spot price of overUS$1,940 per ounce, the applicable NSR royalty rate is currently 2.00%; - Premier gold mining operator in the world on the tier 1 Cortez & Pipeline mine complex;
- The Robertson development project contains an historical Inferred mineral resource estimate (MRE) in excess of 2.7 million ounces Au in total oxide and sulphide materials (191.7 Mt grading 0.0143 oz/t Au), using a 0.0147 oz Au/ton cut off, based on the NI 43-101 Preliminary Economic Assessment dated
January 15, 2012 as prepared for Coral byBeacon Hill Consultants (1988) Ltd. in conjunction with Knight Piésold Ltd.,SRK Consulting (U.S.), Inc. andKaehne Consulting Ltd. (the "Technical Report"), a copy of which is available on Coral's profile on SEDAR at www.sedar.com; - Exploration upside from a key asset property with drilling currently underway, that is located within close proximity of the Cortez mill;
- Strong balance sheet that currently has in excess of
C$11.5 million in cash; and - Downside protection through minimum non-refundable advance royalty payments totalling
$0.5 million per year for 10 years commencing in 2025.
The above-mentioned resources estimate on the Robertson Property is historical in nature. Nomad and Coral are of the view that the resources disclosed in the Technical Report are relevant and reliable, but should not be relied on as a current resources estimate. No qualified person of Nomad or Coral has done sufficient work to classify the above-mentioned estimate as current mineral resources.
"When we created Nomad, we set the objective to become a catalyst for sector consolidation. Today's announcement marks the first step of our consolidation strategy and follows our desire to become the best global acquisition-driven precious metals royalty company in the sector. This acquisition will further diversify our global portfolio as we keep executing on our aggressive growth plan" said
"This acquisition is very strategic for Nomad as it allows us to access a royalty on a top tier mining complex, operated by one of the largest gold operator in the world and located in
Transaction Details
Pursuant to the Transaction, Coral shareholders will be entitled to receive, for each Coral share held, consideration consisting of
Each Unit will consist of one Nomad common share and one-half of a common share purchase warrant (a "Warrant"). Each full Warrant will entitle the holder thereof to purchase one additional Nomad common share at a price of
Each stock option to acquire common shares of Coral will be subject to accelerated vesting in accordance with Coral's stock option plan, and the option holders are expected to enter into option exercise and termination agreement with Coral prior to closing of the Transaction, pursuant to which the optionholders will be required to exercise their stock options prior to closing of the Transaction or, if they fail to do so, any and all outstanding and unexercised stock options of Coral shall expire and be terminated as of the effective date of the Transaction.
Overview of Coral
Average Gold Price During the Quarter (US$/oz) | Applicable NSR Royalty Rate |
Up to and including | 1.00% |
1.25% | |
1.50% | |
1.75% | |
2.00% | |
Over | 2.25% |
In addition, in the event that the Robertson Property is not placed into production by
Coral also holds a portfolio of strategically-located exploration projects near
Coral's Initiatives to Enhance Shareholder Value
In 2016, Coral's management team, in consultation with Coral's Board of Directors and its financial and legal advisors, began considering and implementing various strategic and financial initiatives to create shareholder value. Coral's share price increased from a low of
On
Coral's CEO
Benefits to Coral Shareholders
- Significant premium to the current share price and continued upside through ownership of Nomad common shares and warrants;
- Attractive mix of consideration including cash, Nomad common shares and Nomad warrants;
- Immediate exposure to substantial free cash flow from Nomad's diversified portfolio of royalties, streams and gold loans;
- Enhanced scale with better access to capital and greater balance sheet flexibility; and
- Robust re-rate potential as Nomad pursues its growth trajectory towards intermediate royalty company status.
Approvals and Timing
The Transaction, which is expected to close on or about
The Transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (
In addition to Coral shareholders' and court approval, the Transaction is subject to regulatory approval, including approval by the TSX for the listing of the shares to be issued by Nomad and the common shares issuable upon exercise of the Warrants, if any, and other closing conditions customary for transactions of this kind. The Arrangement Agreement includes customary deal protection provisions in favour of Nomad, including non-solicitation covenants and a right to match superior proposals, and a termination fee in favour of Nomad equal to 4.5% of the market capitalization of Coral on the date of any termination of the Arrangement Agreement by Coral.
Financial and
Coral's financial advisor is
No Offer or Solicitation
This announcement is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell Coral shares or an offer to sell or a solicitation of an offer to buy Nomad shares.
None of the securities to be issued pursuant to the Arrangement Agreement have been or will be registered under the United States Securities Act of 1933, as amended (the "
Qualified Person
The technical content of this news release has been reviewed and approved by
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Forward-Looking Statements
Certain statements contained in this press release may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that Nomad and Coral expect to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, the satisfaction of all conditions precedent for the closing of Transaction; the timing for the completion of the Transaction; the anticipated timing for holding the Special Meeting; the receipt of court, shareholder and regulatory approvals required for the Transaction; the potential impact of the Transaction on the combined entity's future operations; the exploration update and development of the Robertson Property; Nomad's ability to become a catalyst for sector consolidation and the best global acquisition-driven precious metals royalty company in the sector; Nomad's diversified global portfolio and potential growth and benefits to Coral shareholders. Although Nomad and Coral believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include, the impossibility to satisfy the conditions precedent for the closing of the Transaction, the impossibility to acquire royalties, streams and to fund precious metal streams, gold prices, Nomad's royalty and stream interests, mineral resource estimates, access to skilled consultants, results of mining operations, exploration and development activities for properties with respect to which Nomad holds a royalty or stream, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment, timeliness of government or court approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations, market prices, continued availability of capital and financing and general economic, market or business conditions. These risks, uncertainties and other factors include, but are not limited to, those described under "COVID-19" and "Risks and Uncertainties" in Nomad's Management Discussion and Analysis for the three and six month periods ended
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