In a Feb. 18 research note, Haywood Securities analyst Kerry Smith reported that Nomad Royalty Company Ltd. (NSR:TSX; NSRXF:OTCQX) "delivered a good quarter" and mining operations at one of its stream assets, Blyvoor, is ramping up.
Smith reviewed Nomad's preliminary financials for Q4/20 and full year 2020 (FY20), highlighting that nearly all metrics met Haywood's expectations.
Deliveries and sales of gold equivalent ounces (GEOs) were better than expected in Q4/20 and FY20. In Q4/20, they were 3,857 GEOs versus Haywood's estimate of 3,563 GEOs. In FY20 deliveries totaled 16,607 GEOs compared to Haywood's estimate of 16,583 GEOS, and sales came to 17,504 GEOs compared to an estimated 17,480 GEOs.
Costs in Q4/20 were in line. They amounted to US$0.93 million against Haywood's expected US$0.92 million. Cash flow per share was as expected, at US$0.01.
The one outlier was adjusted net income, a slight miss. Haywood forecast it at US$1.5 million, and it was US$1.3 million.
At year-end 2020, Nomad had US$22.5 million in cash, more than Haywood's estimate of US$20.1 million.
Smith noted that Haywood expects GEOs for Nomad to grow in 2021 to 25,100 from 16,607, after production starts this quarter at the fully permitted Blyvoor project in South Africa. In any given calendar year, Nomad has a 10% gold stream on the first 160,000 ounces of production at Blyvoor and a 5% gold stream on any additional ounces produced there. Also, according to the streaming agreement, Nomad pays US$572 per ounce.
As for Blyvoor, Smith relayed, operations there are ramping up with blasting and ore processing taking place.
Regarding the Woodlawn project, another of Nomad's assets and for which a strategic process is still underway, Haywood removed it from its Nomad model given there has not been an update recently. Reflecting that change, Haywood's Nomad estimates now include 25,100 total GEOs going to Nomad in 2021 and a lower cash flow per share of US$0.06 versus the previous US$0.08.
Currently, Haywood has a Buy rating and a CA$2.25 per share target price on Nomad, the current share price of which is about CA$1.04.
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Disclosures from Haywood Securities, Nomad Royalty Company Ltd., February 18, 2021
Analyst Certification: I, Kerry Smith, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.
Of the companies included in the report the following Important Disclosures apply:
▪ Haywood Securities Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Nomad Royalty Company Ltd. in the past 12 months.
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