Nova Royalty Corp. (TSX-V: NOVR) (OTCQB: NOVRF) is pleased to announce that it has entered into an agreement with arm’s length private parties  pursuant to which Nova will acquire an additional 0.12% net smelter return royalty, on the Copper World Complex located in Arizona, USA, owned by Hudbay Minerals Inc. (TSX: HBM) (NYSE: HBM). Nova’s consolidated royalty position will be a 0.285% NSR on Copper World upon closing. Nova retains a right of first refusal in respect of an additional 0.390% NSR held by the Sellers, upon completion of the Transaction.

Hashim Ahmed, Nova’s Interim CEO, commented, “We are pleased to increase our NSR royalty once again on Hudbay’s Copper World project. Copper World is a large-scale, premier copper development asset located in one of the United States’ most strategic copper districts. We are encouraged by the progress that Hudbay has made as it continues to steadily advance Copper World toward a construction decision. Gaining additional royalty exposure to a long-lived asset such as Copper World further strengthens Nova’s portfolio of high-quality copper and nickel royalties.” 

Copper World Highlights ⁽¹⁾⁽²⁾

• World Class Deposit – Nova increases its exposure to a Tier-1 copper project with Phase I expected average annual copper production of approximately 86,000 tonnes with first-quartile cash costs and sustaining cash costs positioning of $1.15 and $1.44 per pound of copper, respectively.
• Significant Mine Life – Phase I standalone operation on private land and patented mining claims over a 16-year mine life with expanded Phase II mine life of 44 years on federal lands.
• Top Jurisdiction – Copper World is expected to be one of the next major copper operations in the United States, delivering the copper needed to meet domestic electrification and decarbonization supply chain needs.
• Major Operator – Hudbay (C$1.7 billion market capitalization) is an established mining company with a proven ability to discover, finance, build and operate low-cost, long-life, cash-generating assets.
• Near-Term Production – Hudbay expects potential project sanction decision in 2024, with three-year build timeline.

Transaction Details

The Additional Royalty has the same characteristics as the 0.165% royalty on Copper World already owned by Nova and covers all metals, including copper, molybdenum, silver, and gold extracted from the majority of mining claims covering Copper World. The aggregate purchase price for the Transaction is $5,600,000 and will be paid as follows:

• $1,360,000 in cash, payable upon closing of the Transaction;
• $680,000 in common shares of Nova, payable upon closing of the Transaction;
• $600,000 in cash, payable 12 months after closing of the Transaction; and
• $2,960,000 in cash, payable at the later of: (i) 12 months following the announcement of the commencement of production from the Royalty Area; and (ii) the receipt by Nova of the first three payments under the Royalty.

The number of Consideration Shares to be issued in connection with the Transaction will be based on the 20-day volume weighted average trading price on the TSX Venture Exchange of Nova’s common shares prior to the date of signing of the Definitive Agreement.

Transaction Financing

Nova also announces that it intends to finance the initial cash payment of the Transaction through its existing amended and restated convertible loan facility with Beedie Capital, the terms of which are disclosed in the Company’s news releases dated February 10, 2021 and March 13, 2023. The Company currently has C$15.5 million undrawn on the Beedie Capital Facility for making additional investments subject to the closing conditions.

The transactions disclosed in this news release are subject to the acceptance of the TSXV.

About Nova

Nova Royalty Corp. is a copper and nickel focused royalty company. Nova has assembled a portfolio of royalties on a significant proportion of the next generation of major copper projects located in 1st-tier jurisdictions, providing investors exposure to some of the most critical resource assets for the clean energy transition. These projects are being advanced by the world’s premier mining companies, which include First Quantum, Lundin Mining, Hudbay, Anglo American and Glencore, among others.

Qualified Person

Technical information contained in this press release originates in the public disclosure set out above and has been reviewed and approved by Christian Rios, AIPG Certified Professional Geologist, Advisor to Nova and a Qualified Person as defined in NI 43-101.

Copper World Royalty Map (CNW Group/Nova Royalty Corp.)