Analysts at Canaccord and Stifel GMP are upbeat on royalty and streaming group Nomad Royalty (TSX:NSR) Company Ltd after the company reported strong preliminary first-quarter results.
In the three months to end-March, Nomad reported attributable revenue of around US$12.7 million from 6,604 attributable gold-equivalent ounces (GEOs) sold. The firm's preliminary cash operating margin for the period came in at US$11 million.
Stifel noted that the firm's revenue GEOs had come in in sequentially higher quarter-on-quarter (QoQ) and represented 26% of full year guidance at the midpoint.
Nomad is on-track to achieve 2022 attributable gold equivalent ounce guidance of between 23,000 ounces and 27,000 ounces, analysts highlighted.
In the first quarter statement, Nomad also provided an update on its asset portfolio, noting that mining rates had improved "considerably" at the Blyvoor gold mine in South Africa, saying in March, that it had averaged a daily ore mining rate in excess of 500 tonnes per day (tpd) for the first time for record production of around 2,000 ounces.
"Q1 preliminary results are positioning Nomad on-track to achieve 2022 attributable gold equivalent ounces guidance. From the Blyvoor update is evidence that ramp-up is progressing and production increasing. In our view, Q1 results and the Blyvoor update are visibly de-risking the near-term cash flow growth," said Stifel, which rates Nomad shares a 'Buy'.
READ: Nomad Royalty Company reports preliminary revenue attributable to company of US$12.7 million in first quarter
Meanwhile, over at broker Canaccord, analysts said that Nomad's 2022 guidance indicated 50% growth in GEOs, with 60,000 ounces expected by 2025, which is a more than tripling of GEOs.
"Management notes this guidance assumes the start of operations at Greenstone and Platreef in 2024 and the start of mining of the Robertson deposit (part of Nevada Gold Mine’s Cortez complex) in 2025," they said.
"We assume similar start dates for each of these operations, but currently estimate production of 53.2koz in 2025, which represents >300% growth from 2021 production," said the Canaccord analysts.
"With potential contributions from Gualcamayo DCP, Suruca, Troilus, and Mercedes expansion, we see potential to achieve 60koz by 2025."
Canaccord repeats a 'Buy' stance on the company, and targets C$15.50 a share.
Shares in Nomad are currently changing hands at C$9.62.
Contact the author at giles@proactiveinvestors.com