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Royalty Firm's Q1 Financials Highlight 'Strong Cash Flow Potential'
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An earnings update on Nomad Royalty Company is provided in a CIBC research report.

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In a May 11 research note, CIBC analyst Alex Hunchak reported Nomad Royalty Company Ltd.'s (NSR:TSX; NSRXF:OTCQX) Q1/21 financial results and progress at one of its royalty assets.

Nomad prereported that quarterly sales of gold equivalent ounces (GEOs) in Q1/21 were a record high, at 5,575 GEOs, and included first contributions from the Blyvoor gold stream. Due to sales, Hunchak noted, the company's Q1/21 financials were mostly in line with CIBC and consensus' estimates.

For instance, adjusted earnings per share (EPS) and cash flow per share were $0.00 and $0.01, "largely in line with our and consensus estimate of $0.01/$0.01." EPS came in slightly under, resulting from higher depreciation and general and administrative expenses. EPS also was impacted by Nomad recognizing the changed value of its gold loan following Equinox's acquisition of Premier Gold.

During Q1/21, Nomad generated about $6.5 million in operating cash flow and $5.27 million in free cash flow. At quarter's end, it had $25.3 million in cash on the balance sheet. In addition, the Montreal-based company has $75 million available to it in an undrawn revolving credit facility. Given its available liquidity, Nomad likely will "remain active on the acquisition front in 2021," Hunchak wrote.

"Nomad's Q1/21 financial results were surprise free and highlighted the company's strong cash flow potential at current precious metals prices," concluded Hunchak.

Looking forward, CIBC estimates full-year 2021 sales of about 21,400 GEOs, after picking up in H2/21. Nomad has not released annual guidance because ramp-up timing at Blyvoor and Woodlawn are uncertain.

Regarding Blyvoor, the royalty and stream firm still expects production to hit full capacity by year-end 2021 after completion of the technical report sometime in Q2/21, Hunchak relayed. The operation has been ramping up since April 12, 2021, after being suspended temporarily.

"Derisking the Blyvoor asset is a key deliverable for Nomad, given the project's about 30% contribution to Nomad's net asset value," Hunchak wrote. "We continue to view the successful de-risking of the Blyvoor asset as the key to the company's re-rating against the peer group in the year ahead."

Regarding the Robertson project on which Nomad holds a sliding scale NSR royalty, the project operator, Barrick Gold, recently announced positive exploration results; stepout drilling 300 meters beyond the current resource indicated potential near-surface mineralization. Barrick will follow up that finding with further drilling in Q2/21 and will drill test another area, previously undrilled, between the Robertson and Pipeline deposits.

CIBC has a Neutral rating and a CA$1.25 per share target price on Nomad Royalty. Today, the share price at about CA$1.09.


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Nomad Royalty. Click here for important disclosures about sponsor fees.
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Disclosures from CIBC, Nomad Royalty Company Ltd., Earning Update, May 11, 2021

Analyst Certification:
Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

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Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.

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Important Disclosure Footnotes for Nomad Royalty Company Ltd (NSR.TO)
2a These companies are clients for which a CIBC World Markets company has performed investment banking services in the past 12 months: Nomad Royalty Company Ltd
2c CIBC World Markets Inc. has managed or co-managed a public offering of securities for these companies in the past 12 months: Nomad Royalty Company Ltd
2e CIBC World Markets Inc. has received compensation for investment banking services from these companies in the past 12 months: Nomad Royalty Company Ltd
2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from these companies in the next 3 months: Nomad Royalty Company Ltd

For important disclosure footnotes for companies mentioned in this report that are covered by CIBC World Markets Inc., click here: Disclaimers & Disclosures.

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