Nomad Royalty Company to acquire Coral Gold, marking the start of its sector consolidation strategy

Montreal, QC and Vancouver, BC – August 24, 2020

Nomad Royalty Company Ltd. (“Nomad” or the “Company”) (TSX: NSR and OTCQX: NSRXF) and Coral Gold Resources Ltd. (“Coral”) (TSX-V: CLH; OTCQX: CLHRF) are pleased to announce that they have entered into a definitive Arrangement Agreement (the “Arrangement Agreement”), under which Nomad intends to acquire all of the outstanding common shares of Coral pursuant to a statutory plan of arrangement pursuant to the Business Corporations Act (British Columbia) (the “Transaction”) for total value of approximately $45.8 million. All amounts in this news release are expressed in United States dollars unless otherwise indicated.

 

Acquisition Highlights

  • Acquisition of a premier, uncapped sliding-scale 1.00% to 2.25% net smelter return (“NSR”) royalty on Nevada Gold Mines’ Robertson property located in Nevada, USA (the “Robertson Property”), which forms part of the greater Cortez & Pipeline mining complex. Based on the current gold spot price of over US$1,940 per ounce, the applicable NSR royalty rate is currently 2.00%;
  • Premier gold mining operator in the world on the tier 1 Cortez & Pipeline mine complex;
  • The Robertson development project contains an historical Inferred mineral resource estimate (MRE) in excess of 2.7 million ounces Au in total oxide and sulphide materials (191.7 Mt grading 0.0143 oz/t Au), using a 0.0147 oz Au/ton cut off, based on the NI 43-101 Preliminary Economic Assessment dated January 15, 2012 as prepared for Coral by Beacon Hill Consultants (1988) Ltd. in conjunction with Knight Piésold Ltd., SRK Consulting (U.S.), Inc. and Kaehne Consulting Ltd. (the “Technical Report”), a copy of which is available on Coral’s profile on SEDAR at www.sedar.com;
  • Exploration upside from a key asset property with drilling currently underway, that is located within close proximity of the Cortez mill;
  • Strong balance sheet that currently has in excess of C$11.5 million in cash; and
  • Downside protection through minimum non-refundable advance royalty payments totalling $0.5 million per year for 10 years commencing in 2025.

The  above-mentioned  resources estimate  on the Robertson Property  is  historical  in  nature.  Nomad  and Coral are of  the  view  that  the  resources  disclosed  in the Technical Report  are  relevant  and  reliable, but should not be relied on as a current resources estimate. No qualified person of Nomad or Coral has done sufficient work to classify the above-mentioned estimate as current mineral resources.

“When we created Nomad, we set the objective to become a catalyst for sector consolidation. Today’s announcement marks the first step of our consolidation strategy and follows our desire to become the best global acquisition-driven precious metals royalty company in the sector. This acquisition will further diversify our global portfolio as we keep executing on our aggressive growth plan” said Vincent Metcalfe, Nomad’s Chief Executive Officer.

“This acquisition is very strategic for Nomad as it allows us to access a royalty on a top tier mining complex, operated by one of the largest gold operator in the world and located in Nevada, a leading mining jurisdiction. We are also very pleased to welcome new shareholders of Nomad as we continue our growth trajectory” said Joseph de la Plante, Nomad’s Chief Investment Officer.

 

Transaction Details

Pursuant to the Transaction, Coral shareholders will be entitled to receive, for each Coral share held, consideration consisting of C$0.05 in cash and 0.80 of a unit (a “Unit”) of Nomad, as described below.  The consideration payable to Coral shareholders by Nomad represents total value of approximately C$1.21 per Coral share (the “Aggregate Consideration per Coral Share”), based on the closing price of C$1.37 of Nomad common shares on the TSX on August 21, 2020 and including the C$0.06 estimated value per Coral share of the one-half common share purchase warrant included in each Unit. Based on Nomad’s and Coral’s August 21, 2020 closing prices on the TSX and TSX Venture Exchange respectively, the Transaction represents a premium of approximately 45% to Coral shareholders.

Each Unit will consist of one Nomad common share and one-half of a common share purchase warrant (a “Warrant”). Each full Warrant will entitle the holder thereof to purchase one additional Nomad common share at a price of C$1.71 for a period of two years following the effective date of the Transaction. If the daily volume-weighted average trading price of Nomad’s shares on the TSX exceeds the Warrant exercise price by at least 25% for any period of 20 consecutive trading days after one year from the effective date of the Transaction, Nomad will have the right to give notice in writing to the holders of the Warrants that the Warrants will expire 30 days following such notice, unless exercised prior thereto.

Each stock option to acquire common shares of Coral will be subject to accelerated vesting in accordance with Coral’s stock option plan, and the option holders are expected to enter into option exercise and termination agreement with Coral prior to closing of the Transaction, pursuant to which the optionholders will be required to exercise their stock options prior to closing of the Transaction or, if they fail to do so, any and all outstanding and unexercised stock options of Coral shall expire and be terminated as of the effective date of the Transaction.

 

Overview of Coral

Coral Gold Resources Ltd. is a precious metals royalty company with assets in Nevada, USA. Coral’s primary asset is a 1.00% to 2.25% sliding scale NSR royalty on the Robertson Property. The sliding scale NSR royalty rate will be determined based on the observed gold price during each quarterly period based on the average LBMA Gold Price PM during the quarterly period, as follows:

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