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.
Read what other experts are saying about:
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.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures from CIBC, Nomad Royalty Company Ltd., Earning Update, May 11, 2021
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.
Potential Conflicts of Interest:
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.
In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.
Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.
CIBC World Markets Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that CIBC World Markets Inc. may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
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.