Nova Royalty Corp. (TSX-V: NOVR) (OTCQB: NOVRF) is pleased to announce that it has entered into an agreement with an arm’s length private party pursuant to which Nova will acquire an additional 0.03% net smelter return royalty, on the Copper World Complex project located in Arizona, USA, owned by Hudbay Minerals Inc. (TSX: HBM) (NYSE: HBM). Nova will now hold a 0.165% NSR royalty on Copper World and Nova’s right of first refusal in respect to an additional 0.540%, as detailed in its news release dated January 10, 2022, will reduce to 0.510% NSR upon completion of the Transaction.

Alex Tsukernik, Nova’s President and CEO, commented, “We are pleased to have increased our royalty position on the Copper World Complex. Copper World represents one of the largest and most strategic copper districts in the United States, and is being steadily advanced by Hudbay Minerals toward a construction decision.”

Transaction Highlights

• Increases Nova’s royalty interest ahead of near-term development milestones at Copper World, with Hudbay continuing to de-risk Copper World ahead of a potential construction decision
• Repeat transaction with royalty owner, with significant upfront share component, further strengthens long-term relationship
• Continued support by Beedie Capital, Nova’s largest shareholder

Transaction Details

The Additional Royalty has the same characteristics as the 0.135% 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 $1,400,000 and will be paid as follows:

• $340,000 in cash, payable upon closing of the Transaction
• $170,000 in common shares of Nova, payable upon closing
• $150,000 in cash, payable 12 months after closing of the Transaction; and
• $740,000 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 announcement date of the Transaction.

Nova retains a right of first refusal to acquire an additional 0.510% NSR on Copper World.

Beedie Financing

Nova also announces that it will draw down an additional C$1.5 million under its existing amended and restated convertible loan facility with Beedie Capital, the terms of which are disclosed in the Company’s news release dated February 10, 2021. The proceeds from the Drawdown will be used to fund royalty acquisitions and for general corporate purposes. The Drawdown will increase the total amount drawn under the Beedie Capital Facility to C$9.5 million, with an additional C$15.5 million remaining available to the Company.

The Drawdown is convertible by Beedie Capital into 840,241 common shares of the Company at a conversion price of C$1.7852 per common share which is based on a 20% premium above the 30-day volume-weighted average price of the common shares of Nova on ‎the TSXV calculated up to and including March 9, 2023, in accordance with the terms of the Beedie Capital Facility‎.

Beedie currently owns approximately 10.0 million common shares of Nova, having increased its position in the Company by approximately 1.0 million common shares since December 31, 2022.

In addition, Nova has entered into an amendment to the Beedie Capital Facility to accrue the interest for the period from October 1, 2022 to September 30, 2023 to principal at an interest rate of 8.5% for that period. Under the amended agreement, Nova will begin to pay cash interest on its outstanding principal for the period commencing on October 1, 2023 at which point the interest rate will revert to 8.0% as per the original Beedie Capital Facility.

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

About Nova

Nova is a royalty company focused on providing investors with exposure to the key building blocks of clean energy – copper and nickel. 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.