Nomad Royalty Company executing plan for strong organic portfolio growth in 2021

A new generation royalty firm Generating strong free cash flow Already has dividend policy What Nomad Nomad Royalty does: Nomad Royalty Company Ltd (TSE:NSR) (OTCQX:NSRXF) called itself a "new generation" royalty firm when its shares began trading on the Toronto Stock Exchange in May last year.  The group purchases rights to a percentage of the gold or silver produced from a mine for its life. The Montreal-based firm began trading in Toronto after a reverse takeover, which saw it acquire the royalty portfolio of Yamana Gold and streaming assets from Orion Resource Partners, via two vend-in deals. Nomad acquired six stream and gold loan assets from the Orion Group for US$268 million and three royalties and a contingent payment on the start of commercial production of one project from the Yamana Group for US$65 million. In total, the company now holds a portfolio of 14 royalty, stream, and gold loan assets, of which seven are on currently producing mines. The company is focused on already producing assets or highly de-risked ones. It aims to have the lowest G&A (general and administrative) costs in the sector. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold and silver streams and royalties. How is it doing: On May 11, 2021 Nomad reported record first quarter revenue and said a record 5,575 gold equivalent ounces (GEOs) were delivered in the three month period and 5,575 GEOs were sold, up from 3,817 ounces in the first quarter of 2020. Nomad Royalty's revenue came in at US$9.7 million for the first quarter, up from US$6.4 million in the same period a year earlier, while adjusted net income was US$1.9 million, down from US$4.1 million a year earlier. The cash operating margin for 1Q came in at US$7.9 million, up from US$5.9 million in 1Q, 2021. The company ended its first quarter with US$25.3 million in cash, compared to US$4.6 million on March 31, 2020. The company noted that at its Moss gold mine royalty in Arizona, Northern Vertex Mining Corp, was now conducting an aggressive exploration program with three drill rigs to expand the resource in a bid to extend the mine life and test district-scale targets. At the Troilus Gold royalty in Quebec, Troilus earlier in 2021 reported positive results on the Southwest zone, including a 200-metre step-out hole, which intersected high-grade gold-bearing mineralization between 50m and 450m from surface, and located outside of the NI 43-101 mineral resource envelope and the open pit proposed in the August 2020 Preliminary Economic Assessment (PEA). In January 2021, the company said it had acquired a 0.21% net smelter return (NSR) royalty on the near 'shovel-ready' Blackwater gold project in British Columbia for around US$3 million in cash and shares. The Blackwater operation continues to head towards production, Nomad said, with financing in place and a definitive feasibility study planned for 2021 and anticipated production earmarked for 2024. The initial capital needed for the first phase — the first five years of a 23-year mine life — was pegged by the pre-feasibility study (PFS) at C$592 million, with average annual gold output of 248,000 ounces at all-in-sustaining-costs (AISC) of US$508 an ounce. Inflection points: More royalty/stream acquisitions Precious metal price moves Pre-feasibility study at Blackwater gold project What the broker says: After Nomad released its first quarter results in early May, analysts at Stifel GMP maintained their 'Buy' rating and C$2 target price on Nomad Royalty. Nomad’s first quarter preliminary revenue and its gold and silver deliveries/sales were broadly in-line with the firm’s expectations. Pre-reported attributable revenue GEOs for the quarter came in at 5,575 ouces - 2,000 ounces higher than the prior quarter, a record for the company.  A key reason behind its rating was the resumption of operations at Nomad’s Blyvoor project. “Following the first shipment from Blyvoor in Q1, a local union blockade had restricted the entrance to the property and temporarily suspended operations,” Stifel wrote. “The dispute has since been resolved, and operations have resumed and are ramping up at Blyvoor. The company expects regular deliveries over the coming quarters and full production ramp up by the end of this year.” “Blyvoor represents 30% of NAV (net asset value). We forecast the Blyvoor gold stream having increasing weight on the company’s growing revenues over the next five years. In 2021, we project Blyvoor to account for approximately 10% of our estimated revenue GEOs.” Additionally, the firm noted that technical studies and engineering programs are underway Nomad’s at Woodlawn project in an effort to improve areas that Stifel said an earlier operational phase showed as needing some adjustments. “We currently assume that the halted ramp-up of the mine resumes in H2 2021,” the firm wrote. “Our estimated GEOs from Woodlawn in 2021 account for only 5% of our revenue expectations” Stifel continued, “As [Nomad] continues to build its core-revenue generating portfolio, investors are offered the opportunity to participate in the growth and re-rate of this emerging royalty company. ... We believe NSR is set to display rising scale and one of the strongest growth rates in attributable revenue GEOs, relative to peers, resulting in strong cash flow generation in the near-term.” “...Nomad, as an emerging small cap company, offers investors the opportunity to participate in the re-rate of the stock. We expect that as NSR builds a track record of performance and continues to grow its core revenue-generating portfolio, it should justify correspondingly higher valuation multiples.” What the boss says: "Our portfolio delivered a strong first quarter of gold and silver production and represents a great start to the year," CEO Vincent Metcalfe said in a statement accompanying its latest results. "Our focus ahead is on maintaining this positive momentum by delivering on our stated goal of delivering value through further deployment of capital in new opportunities across the globe, which coupled with the strong organic growth of our current portfolio will allow Nomad to continue to generate strong free cash flow and support further growth and returns to shareholders." Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com Follow him on Twitter @andrew_kessel