- Royalty company focused on clean energy metals
- Invests in high-quality assets with long life
- High-quality base metal mines have track record of resource growth and extended mine life
What Nova Royalty does:
Nova Royalty Corp (CVE:NOVR) aims to build a leading royalty company focused on copper and nickel - commodities, which it says, are key to global society's transition to clean energy from fossil fuels.
Copper is used in wind and solar energy and in electric vehicles (EVs). According to reports, the building of a low-carbon energy system capable of supplying the world’s electricity needs in 2050 will require an additional amount of copper equivalent to between two and ten years of current global output.
In super-alloys, nickel is used in turbines, vital for power generation, aerospace and military applications. Nickel is also a vital component for electric car batteries. Annual nickel demand from electric vehicles is expected to grow by a multiple of 20 by 2030.
Vancouver-based Nova Royalty was founded in 2018 and now has a portfolio of royalties on some of the world’s leading copper and nickel development projects, which are being advanced by major miners, including Teck (NYSE:TECK), Newmont (NYSE:NEM), First Quantum Minerals (TSE:FM) and Rio Tinto (LON:RIO).
Its business model is typical of a royalty company. It acquires, mostly from third parties rather than the miners themselves, royalties on producing or exploration assets. This gives the firm exposure to copper/nickel price and optionality on production, while it is protected from direct operating, carrying, exploration or development costs.
The company currently has a portfolio of 15 royalties, including a 2% net smelter royalty (NSR) on NuevaUnión, a Teck/Newmont Joint Venture, one of the world’s largest undeveloped copper projects, which it purchased in February this year.
How is it doing:
On October 1 this year, Nova Royalty began trading on the TSX Venture Exchange, having secured a C$15 million financing facility from major Canadian institutional investor Beedie Capital.
The same month, it acquired a 0.24% net smelter royalty (NSR) on Taca Taca, one of the world’s largest copper development projects, owned by First Quantum Minerals (TSE:FM), for around US$12.75 million.
On November 30, the company announced it had closed an upsized offering raising around C$14.4 million gross, including an over-allotment by the agents, to fund future growth and acquisitions.
The offer had earlier been upsized to C$12.5 million, from C$10 million, at C$1.45 per share with an over-allotment option to the agents to purchase a further 15%.
On November 23, it announced completion of the previously announced royalty acquisition from a subsidiary of Boart Longyear Limited (ASX:BLY) - an existing 2.4% net smelter return royalty on a portion of the Twin Metals copper-nickel-platinum group metals project located in Minnesota being advanced by copper giant Antofagasta PLC (LON:ANTO).
- More royalty deals/ acquisitions
- Nickel and copper price moves
What the boss says:
Nova Royalty CEO Alex Tsukernik spoke to Proactive's Steve Darling on October 1, when the firm debuted on the Toronto Venture Exchange, and explained that the quality of copper and nickel projects the firm could get its hands on was much higher than gold assets, due to the sheer number of others looking at assets like gold.
He explained that the company's acquisition focus was on large projects, not yet producing, being developed by big companies.
"When you have a great project, run by serious people, it's a matter of time before it gets there and so we feel much more comfortable betting on those sort of projects than, say, smaller mines that are closer to production," he said, but added that as Nova expands its portfolio, the group is also planning to looking at assets, close to, or already with cashflow.
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