Nomad Royalty (TSX:NSR) Company Ltd has boosted its royalty on the producing Caserones copper mine in Chile for US$27.25 million in cash.
The Montreal-based company said it had entered into an agreement with private vendors to acquire an effective 0.351% net smelter return (NSR) royalty on the operation, which is located in the prolific Atacama region.
The acquisition is in addition to the effective 0.28% NSR royalty on Caserones that Nomad purchased in May 2021.
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Following completion of the transaction, Nomad will hold an effective 0.63% NSR on the Caserones mine, having invested a total of US$50.25 million, the company said in a statement.
As per the term sheet, Nomad will be entitled to the second quarter dividend payment from Compania Minera Caserones (CMC), a private Chilean contractual mining company that holds the payment rights to 32.5% of a 2.88% NSR royalty on the Caserones mine. The company said it expected the dividend during the third quarter.
Nomad said it will acquire shares representing a 37.5% ownership interest in CMC. Upon closing, Nomad will become a registered shareholder of CMC and will be party to a shareholder agreement, which provides for the distribution of all royalty payments net of Chilean income taxes, among other provisions.
Following the completion of the transaction, Nomad will hold 67.5% of the shares of CMC.
The transaction is Nomad’s sixth acquisition since June 2020 and increases its exposure to a large-scale producing mine, the company told investors.
It also provides Nomad with more free cash flow and greater exposure to an operating mine that lies in close proximity to a trio of large copper discoveries in the region.
Nomad owns a portfolio of 15 royalty and stream assets, of which eight are on currently producing mines.
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