Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Newly formed royalty and streaming company Nomad Royalty has entered into a royalty purchase agreement with a private vendor to acquire a 1% net smelter return (NSR) royalty on a portion of Troilus Gold’s Troilus Gold project for total consideration of approximately $7.5 million.
The royalty includes a 1% NSR on all metals and minerals produced from 81 mineral claims and one mining lease at the advanced-exploration stage Troilus gold project, which lies within the province’s Frotet-Evans greenstone belt in Quebec. Based on Nomad’s latest presentation, the area of the royalty includes the existing Troilus deposit as well as the Southwest, Z87 South and Allonge zones to the southwest and northeast, respectively.
The Troilus project features a past-producing gold and copper mine, which churned out over 2 million oz. of gold and almost 70,000 tonnes of copper between 1996 and 2010
In exchange for the royalty, Nomad will pay $1.9 million in cash and issue 5.8 million units to the vendor – each unit includes one share of the company and half of a callable warrant. Closing is expected on or before Aug. 4.
“We are very pleased to announce the acquisition of a royalty on a brownfield deposit that continues to demonstrate significant potential for resource expansion,” Joseph de la Plante, the company’s chief investment officer, said in a release.
“Furthermore, the addition of the Troilus royalty now adds Quebec, Canada, one of the world’s premier mining jurisdictions, to Nomad’s portfolio and further diversifies our growing list of jurisdictions where we own precious metal royalties and streams.”
The Troilus project features a past-producing gold and copper mine, which churned out over 2 million oz. of gold and almost 70,000 tonnes of copper between 1996 and 2010.
Last November, Troilus published an updated resource for the project, with total indicated resources of 159.1 million tonnes grading 0.78 g/t gold and 0.09% copper for a total of 4.7 gold-equivalent oz. Inferred resources add 52.7 million tonnes at 0.9 g/t gold and 0.08% copper for 1.8 million gold-equivalent oz. Cut-off grades range between 0.92 g/t gold-equivalent and 1.04 g/t gold equivalent.
Nomad’s existing royalties and streams include silver streams on Premier Gold Mines’ Mercedes and South Arturo mines, a 1% NSR on Equinox Gold’s RDM gold mine in Brazil as well as 2% NSRs on the mineralization at Lundin Mining’s Suruca gold deposit within the Chapada complex in Brazil.
Midday Monday, Troilus’ stock was up 2.8% on the TSE. The company has a C$166 million market capitalization.
(This article first appeared in the Canadian Mining Journal)
