Nomad Royalty Announces Friendly Acquisition By Sandstorm Gold

Transaction Creates The Largest, Pure-Play, Highest Growth & Most Liquid Mid-Tier Royalty Company

Montreal, Québec – May 2, 2022

(in U.S. dollars unless otherwise noted)

  • Nomad shareholders to receive significant premium of approximately 34% based on the 20-day volume-weighted average prices of both companies.
  • Nomad shareholders maintain meaningful ownership in Sandstorm’s high-quality portfolio of assets: Nomad shareholders will hold 28% of Sandstorm at closing of the Transaction.
  • Nomad shareholders to benefit from increased scale: Following the closing of the Transaction, Sandstorm will be the largest, highest-growth, and most liquid mid-tier royalty and streaming company.
  • Continued exposure to Nomad’s core assets’ significant operating and exploration upside potential: Greenstone, Platreef, and Cortez (Robertson deposit) to be a significant part of Sandstorm’s future growth.
  • Industry leading portfolio diversification: At the closing of the Transaction, Sandstorm’s resulting portfolio will total 260 streams and royalties, of which 39 are cash flowing with no asset contributing more than 15% to Sandstorm’s net asset value (“NAV”) on analyst consensus estimates.
  • Significantly improved trading liquidity and capital markets exposure: Sandstorm trades on average over $19 million shares per day and also benefits from inclusion in indices such as the S&P/TSX Capped Composite.
  • Nomad shareholders continue to benefit from ongoing return of capital to shareholders: Participation in Sandstorm’s quarterly dividend.

Nomad Royalty Company Ltd. (“Nomad” or the “Company”) (TSX : NSR, NYSE: NSR) is pleased to announce today that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”) (TSX: SSL, NYSE: SAND), pursuant to which Sandstorm will acquire all of the issued and outstanding shares of Nomad (the “Nomad Shares”) in an all-share transaction (the “Transaction”) valued at approximately C$755 million. The Transaction will be effected by way of a court-approved plan of arrangement, is subject to certain regulatory and shareholder approvals and is expected to close in the second half of 2022. Under the terms of the Transaction, shareholders of Nomad will receive 1.21 common shares of Sandstorm (the “Sandstorm Shares”) for each Nomad Share held. The consideration implies a value of approximately C$11.57 per Nomad Share based on the closing price of the Sandstorm Shares on the Toronto Stock Exchange (“TSX”) on April 29, 2022 and represents a premium of 21% to the closing price of the Nomad Shares as at the same date and a premium of 34% on the 20-day volume weighted average price of the Nomad Shares and Sandstorm Shares on the TSX for the period ending on April 29, 2022.

“Nomad has executed and delivered on its commitment to create value for our shareholders through our disciplined transaction-driven strategy. Today’s transaction builds on our vision to create a pure-play, highly diversified, cash-flow focused royalty & streaming company with peer-leading growth. Catalyzing the creation of the next large royalty company has always been our objective,” commented Vincent Metcalfe, CEO of Nomad.

“Today’s announcement propels Sandstorm forward in both size and scale while solidifying Sandstorm’s position amongst its peers as the highest-growth streaming and royalty company. We see tremendous value in Nomad’s high-growth precious metals focused portfolio and in the combined portfolio,” commented Nolan Watson, President & CEO of Sandstorm.

BASECORE TRANSACTION

Concurrent with the Transaction, Sandstorm has also agreed to acquire nine royalties and one stream (the “BaseCore Portfolio”) from BaseCore Metals LP (“BaseCore”) for total consideration of $525 million, consisting of $425 million cash and $100 million Sandstorm Shares (the “BaseCore Transaction”). The cash consideration for the acquisition of the BaseCore Portfolio will be funded from Sandstorm’s newly upsized $500 million revolving credit facility to be implemented before closing of BaseCore Transaction.

BaseCore is an entity equally owned by affiliates of Glencore Plc and Ontario Teachers’ Pension Plan that holds a high-quality, long-life portfolio that includes 10 royalty and stream assets, of which three are on currently producing assets, including a 1.66% net profits interest (“NPI”) royalty on the world-class Antamina copper mine located in Peru.

The BaseCore Transaction is expected to close in 4–6 weeks and is subject to regulatory approvals including the approval of the TSX for the listing of the Sandstorm Shares, the Canadian Competition Bureau, waiver of rights of first offer or refusal on certain exploration stage royalties, and other customary conditions for a transaction of this nature.

ANTAMINA ROYALTY SPIN-OUT AND SILVER STREAM WITH HORIZON

Concurrent with the BaseCore Transaction, Sandstorm has signed an amended and restated letter of intent with Royalty North Partners Ltd. (“RNP”), to become “Horizon Copper”, whereby Sandstorm will sell the acquired 1.66% Antamina NPI royalty to Horizon and Sandstorm will retain a long-life silver stream on the Antamina mine, along with a portion of the post-stream NPI royalty (the “Spin-Out Transaction”).

The business intent of Horizon Copper is to actively grow its existing portfolio of assets, with a focus on copper projects. The subsequent spin-out of the Antamina NPI will position Horizon Copper as a competitive copper company with a portfolio of high-quality cash-flowing and development stage copper assets. This transformative transaction provides Horizon Copper with the size and scale required to further grow and diversify the company, further strengthening the strategic partnership opportunities with Sandstorm.

The full consideration that Horizon Copper will issue to Sandstorm under the Spin-Out Transaction includes:

  • 1.66% Antamina Silver Stream: Sandstorm will receive 1.66% of silver based on production from the Antamina mine with ongoing payments equal to 2.5% of the silver spot price (the “Antamina Silver Stream”).
  • 0.55% Antamina Royalty: Sandstorm will receive approximately one-third of the Antamina NPI, paid net of the Antamina Silver Stream servicing commitments (the “Antamina Residual Royalty”).
  • $50 million Cash Payment: Horizon Copper will raise $50 million by way of equity financing, which will then be payable to Sandstorm on closing of the Spin-Out Transaction.
  • $105 million Debenture: Sandstorm will be issued a $105 million debenture (the “Debenture”). The Debenture is expected to bear an interest rate of 3% over a 10-year term. Principal repayments are subject to a 100% cash sweep of the excess cash flow Horizon Copper receives from the 1.66% Antamina NPI after the Antamina Silver Stream and Antamina Residual Royalty obligations are paid. Prepayment of the Debenture can occur at any time prior to maturity without penalty.
  • $26 million in Horizon Copper Shares: Horizon Copper will issue Sandstorm approximately $26 million worth of Horizon Copper shares to maintain Sandstorm’s 34% equity interest.

The Antamina Silver Stream and the Debenture will be senior obligations of Horizon Copper, secured by the 1.66% Antamina NPI.

The Spin-Out Transaction is subject to several conditions, including but not limited to, execution of definitive agreements, TSX-V acceptance, disinterested RNP shareholder approval and Horizon Copper raising $50 million.

The Transaction is not conditional on closing of the BaseCore Transaction or the Spin-Out Transaction. The full particulars of the Transaction, BaseCore Transaction, and Spin-Out Transaction will be described in detail in Nomad’s management information circular to be prepared in accordance with applicable securities legislation.

Upon completion of the Transaction and BaseCore Transaction, existing shareholders of Nomad and Sandstorm will respectively own approximately 28% and 67% of the proforma combined entity, and existing shareholders of BaseCore will own approximately 5%, calculated on the date hereof.

TRANSACTION OVERVIEW

The Transaction will be effected by way of a court-approved plan of arrangement under the Canadian Business Corporation Act and will be subject to the approval of 66 2/3% of the votes cast by shareholders of Nomad at a special meeting of the shareholders of Nomad (the “Nomad Meeting”) and the approval of a simple majority of the vote cast by shareholders of Nomad at the Nomad Meeting, excluding votes cast by the senior officers, as required under Multilateral Instrument 61-101.

Sandstorm will be required under the policies of the TSX to obtain the approval of a simple majority of the votes cast by shareholders of Sandstorm at a special meeting of the shareholders of Sandstorm (the “Sandstorm Meeting”). The dates of the Nomad Meeting and the Sandstorm Meeting will be announced by way of press release at a later date.

Nomad’s principal shareholders, Orion Mine Finance Fund II LP and Orion Mine Finance Fund III LP (collectively, “Orion”), have entered into irrevocable voting support agreements with Sandstorm pursuant to which Orion has agreed to vote all of its Nomad Shares, representing in total approximately 61% of the Nomad Shares on a fully diluted basis, in favour of the Transaction. Directors and officers of Nomad, holding a total of approximately 5% of the Nomad Shares on a fully diluted basis, have also entered into voting support agreements with Sandstorm, pursuant to which they have agreed to vote their Nomad Shares in favour of the Transaction.

In addition to the Nomad and Sandstorm shareholder approvals, the Transaction is subject to approval by the Superior Court of Québec, to regulatory approvals, including that of the Canadian Competition Bureau, the TSX and the New York Stock Exchange approvals for the listing of Sandstorm Shares, as well as other customary closing conditions. The Arrangement Agreement contains customary reciprocal non-solicitation covenants, a right to match in favour of Sandstorm, and $20.6 million or $23.6 million in termination and reverse termination fees payable to Sandstorm or Nomad, respectively, in certain circumstances.

Closing of the Transaction is currently expected to occur in the second half of 2022.

Recommendations of the Board of Directors

The board of directors of Nomad, having received a unanimous recommendation from a special committee comprised solely of independent directors (the “Special Committee”), has unanimously approved the Transaction and determined that the Transaction is in the best interest of Nomad and fair to the shareholders of Nomad. Accordingly, the board of directors of Nomad unanimously recommends the shareholders of Nomad to vote in favour of the Transaction.

Advisors

National Bank Financial acted as financial advisor to the Special Committee and has provided an opinion to the board of directors of Nomad and to the Special Committee. Cormark Securities has provided an independent opinion to the Special Committee. Each opinion to the effect that, subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by the shareholders of Nomad in connection with the Transaction is fair, from a financial point of view, to shareholders of Nomad.

Fasken Martineau DuMoulin acted as legal advisor to Nomad and the Special Committee in connection with the Transaction.

Further Information

Further information regarding the Transaction will be included in a management information circular Nomad will prepare, file and mail to its shareholders in advance of the Nomad Meeting. Copies of the Arrangement Agreement and of the management information circular will be available on Nomad’s corporate profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.

ABOUT NOMAD ROYALTY COMPANY

Nomad Royalty Company Ltd. is a gold & silver royalty company that purchases rights to a percentage of the gold or silver produced from a mine, for the life of the mine. Nomad owns a portfolio of 22 royalty and stream assets, of which 8 are on currently producing mines. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold & silver streams and royalties. For more information please visit: www.nomadroyalty.com.

ABOUT SANDSTORM GOLD ROYALTIES

Sandstorm is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. After the Transaction and BaseCore Transaction close, Sandstorm will have acquired a portfolio of 260 royalties, of which 39 of the underlying mines are producing. Sandstorm plans to grow and diversify its low-cost production profile through the acquisition of additional gold royalties. For more information visit: www.sandstormgold.com.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable U.S. safe harbours provisions (collectively, “forward-looking statements”). The forward-looking statements contained in this press release are expressly qualified by this cautionary statement and readers are cautioned not to put undue reliance on them.

Forward-looking statements in this press release may include, without limitation, statements other than statements of historical facts, including regarding: the anticipated benefits of the Transaction to shareholders of Nomad; the structure and estimated value of the Transaction; the anticipated completion and timing of completion of the Transaction; the ability to obtain required court, shareholder and regulatory approvals for the Transaction, the timing of obtaining such approvals; current expectations, estimates and projections of the proforma combined entity; the combined entity’s size and scale; the combined entity’s financial position, including expectations regarding liquidity and cost of capital; the expected pro forma financial outlook of the combined entity; and the outcome or closing of the BaseCore Transaction and the Spin-out Transaction. When used in this press release, words such as “will”, “expect”, “potential”, “objective”, “becoming”, “subject to”, “expected”, “to be”, ”look forward”, “intends”, “plans”, and similar expressions, as well as phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “occur” or “be achieved”, or the negative connotation of such terms, are intended to identify these forward-looking statements.

Forward-looking statements are based on certain key expectations and assumptions made by Nomad’s management. Although Nomad believes that the expectations and assumptions on which such forward-looking statements are based on are reasonable at the time they were made, there can be no assurance that they will prove to be correct. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond Nomad’s control, and which may cause actual results and development to materially differ from those expressed or implied by such forward-looking statements. Such risks and uncertainties and other factors include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the ability to consummate the Transaction; that the Transaction may not be completed on the terms and conditions or the timing currently anticipated or that it may not be completed at all; the ability to obtain court, shareholder and regulatory approvals, the risk that such approvals may not be obtained in a timely manner or at all and the risk that such approvals may be obtained on conditions that are not anticipated; the satisfaction of other conditions precedent to the Transaction; unanticipated difficulties or expenditures relating to the Transaction; material adverse effects on the business, properties and assets of Nomad or Sandstorm; the potential adverse impact of the announcement or consummation of the Transaction on Nomad’s and Sandstorm’s relationships with third parties; the outcome of legal proceedings that may be instituted against Nomad in relation to the Arrangement Agreement; fluctuation in the price of the Sandstorm Shares; fluctuations in gold, silver and iron ore prices; the failure to comply with the Arrangement Agreement resulting in Nomad being required to pay the termination fee and the termination fee having a material adverse effect on Nomad’s financial position; the possibility that the BaseCore Transaction and/or the Spin-out Transaction will not be completed on the terms and conditions or the timing currently contemplated, and that one or both of them may not be completed at all; as well as additional risks and uncertainties inherent to Nomad’s business, not currently known by Nomad, that are out of Nomad’s control or that Nomad currently deems to be immaterial, which could also have a material adverse effect on Nomad or on its ability to consummate the Transaction.

Forward-looking statements contained in this press release are made as of the date of this press release. Nomad disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. If Nomad updates any one or more forward-looking statements, no inference should be drawn that Nomad will make additional updates with respect to those forward-looking statements.

 

 

Bloor Street Capital Royalty Conference – February 2022

 

 

 

Nomad Royalty Announces Friendly Acquisition By Sandstorm Gold

Transaction Creates The Largest, Pure-Play, Highest Growth & Most Liquid Mid-Tier Royalty Company

Montreal, Québec – May 2, 2022

(in U.S. dollars unless otherwise noted)

  • Nomad shareholders to receive significant premium of approximately 34% based on the 20-day volume-weighted average prices of both companies.
  • Nomad shareholders maintain meaningful ownership in Sandstorm’s high-quality portfolio of assets: Nomad shareholders will hold 28% of Sandstorm at closing of the Transaction.
  • Nomad shareholders to benefit from increased scale: Following the closing of the Transaction, Sandstorm will be the largest, highest-growth, and most liquid mid-tier royalty and streaming company.
  • Continued exposure to Nomad’s core assets’ significant operating and exploration upside potential: Greenstone, Platreef, and Cortez (Robertson deposit) to be a significant part of Sandstorm’s future growth.
  • Industry leading portfolio diversification: At the closing of the Transaction, Sandstorm’s resulting portfolio will total 260 streams and royalties, of which 39 are cash flowing with no asset contributing more than 15% to Sandstorm’s net asset value (“NAV”) on analyst consensus estimates.
  • Significantly improved trading liquidity and capital markets exposure: Sandstorm trades on average over $19 million shares per day and also benefits from inclusion in indices such as the S&P/TSX Capped Composite.
  • Nomad shareholders continue to benefit from ongoing return of capital to shareholders: Participation in Sandstorm’s quarterly dividend.

Nomad Royalty Company Ltd. (“Nomad” or the “Company”) (TSX : NSR, NYSE: NSR) is pleased to announce today that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”) (TSX: SSL, NYSE: SAND), pursuant to which Sandstorm will acquire all of the issued and outstanding shares of Nomad (the “Nomad Shares”) in an all-share transaction (the “Transaction”) valued at approximately C$755 million. The Transaction will be effected by way of a court-approved plan of arrangement, is subject to certain regulatory and shareholder approvals and is expected to close in the second half of 2022. Under the terms of the Transaction, shareholders of Nomad will receive 1.21 common shares of Sandstorm (the “Sandstorm Shares”) for each Nomad Share held. The consideration implies a value of approximately C$11.57 per Nomad Share based on the closing price of the Sandstorm Shares on the Toronto Stock Exchange (“TSX”) on April 29, 2022 and represents a premium of 21% to the closing price of the Nomad Shares as at the same date and a premium of 34% on the 20-day volume weighted average price of the Nomad Shares and Sandstorm Shares on the TSX for the period ending on April 29, 2022.

“Nomad has executed and delivered on its commitment to create value for our shareholders through our disciplined transaction-driven strategy. Today’s transaction builds on our vision to create a pure-play, highly diversified, cash-flow focused royalty & streaming company with peer-leading growth. Catalyzing the creation of the next large royalty company has always been our objective,” commented Vincent Metcalfe, CEO of Nomad.

“Today’s announcement propels Sandstorm forward in both size and scale while solidifying Sandstorm’s position amongst its peers as the highest-growth streaming and royalty company. We see tremendous value in Nomad’s high-growth precious metals focused portfolio and in the combined portfolio,” commented Nolan Watson, President & CEO of Sandstorm.

BASECORE TRANSACTION

Concurrent with the Transaction, Sandstorm has also agreed to acquire nine royalties and one stream (the “BaseCore Portfolio”) from BaseCore Metals LP (“BaseCore”) for total consideration of $525 million, consisting of $425 million cash and $100 million Sandstorm Shares (the “BaseCore Transaction”). The cash consideration for the acquisition of the BaseCore Portfolio will be funded from Sandstorm’s newly upsized $500 million revolving credit facility to be implemented before closing of BaseCore Transaction.

BaseCore is an entity equally owned by affiliates of Glencore Plc and Ontario Teachers’ Pension Plan that holds a high-quality, long-life portfolio that includes 10 royalty and stream assets, of which three are on currently producing assets, including a 1.66% net profits interest (“NPI”) royalty on the world-class Antamina copper mine located in Peru.

The BaseCore Transaction is expected to close in 4–6 weeks and is subject to regulatory approvals including the approval of the TSX for the listing of the Sandstorm Shares, the Canadian Competition Bureau, waiver of rights of first offer or refusal on certain exploration stage royalties, and other customary conditions for a transaction of this nature.

ANTAMINA ROYALTY SPIN-OUT AND SILVER STREAM WITH HORIZON

Concurrent with the BaseCore Transaction, Sandstorm has signed an amended and restated letter of intent with Royalty North Partners Ltd. (“RNP”), to become “Horizon Copper”, whereby Sandstorm will sell the acquired 1.66% Antamina NPI royalty to Horizon and Sandstorm will retain a long-life silver stream on the Antamina mine, along with a portion of the post-stream NPI royalty (the “Spin-Out Transaction”).

The business intent of Horizon Copper is to actively grow its existing portfolio of assets, with a focus on copper projects. The subsequent spin-out of the Antamina NPI will position Horizon Copper as a competitive copper company with a portfolio of high-quality cash-flowing and development stage copper assets. This transformative transaction provides Horizon Copper with the size and scale required to further grow and diversify the company, further strengthening the strategic partnership opportunities with Sandstorm.

The full consideration that Horizon Copper will issue to Sandstorm under the Spin-Out Transaction includes:

  • 1.66% Antamina Silver Stream: Sandstorm will receive 1.66% of silver based on production from the Antamina mine with ongoing payments equal to 2.5% of the silver spot price (the “Antamina Silver Stream”).
  • 0.55% Antamina Royalty: Sandstorm will receive approximately one-third of the Antamina NPI, paid net of the Antamina Silver Stream servicing commitments (the “Antamina Residual Royalty”).
  • $50 million Cash Payment: Horizon Copper will raise $50 million by way of equity financing, which will then be payable to Sandstorm on closing of the Spin-Out Transaction.
  • $105 million Debenture: Sandstorm will be issued a $105 million debenture (the “Debenture”). The Debenture is expected to bear an interest rate of 3% over a 10-year term. Principal repayments are subject to a 100% cash sweep of the excess cash flow Horizon Copper receives from the 1.66% Antamina NPI after the Antamina Silver Stream and Antamina Residual Royalty obligations are paid. Prepayment of the Debenture can occur at any time prior to maturity without penalty.
  • $26 million in Horizon Copper Shares: Horizon Copper will issue Sandstorm approximately $26 million worth of Horizon Copper shares to maintain Sandstorm’s 34% equity interest.

The Antamina Silver Stream and the Debenture will be senior obligations of Horizon Copper, secured by the 1.66% Antamina NPI.

The Spin-Out Transaction is subject to several conditions, including but not limited to, execution of definitive agreements, TSX-V acceptance, disinterested RNP shareholder approval and Horizon Copper raising $50 million.

The Transaction is not conditional on closing of the BaseCore Transaction or the Spin-Out Transaction. The full particulars of the Transaction, BaseCore Transaction, and Spin-Out Transaction will be described in detail in Nomad’s management information circular to be prepared in accordance with applicable securities legislation.

Upon completion of the Transaction and BaseCore Transaction, existing shareholders of Nomad and Sandstorm will respectively own approximately 28% and 67% of the proforma combined entity, and existing shareholders of BaseCore will own approximately 5%, calculated on the date hereof.

TRANSACTION OVERVIEW

The Transaction will be effected by way of a court-approved plan of arrangement under the Canadian Business Corporation Act and will be subject to the approval of 66 2/3% of the votes cast by shareholders of Nomad at a special meeting of the shareholders of Nomad (the “Nomad Meeting”) and the approval of a simple majority of the vote cast by shareholders of Nomad at the Nomad Meeting, excluding votes cast by the senior officers, as required under Multilateral Instrument 61-101.

Sandstorm will be required under the policies of the TSX to obtain the approval of a simple majority of the votes cast by shareholders of Sandstorm at a special meeting of the shareholders of Sandstorm (the “Sandstorm Meeting”). The dates of the Nomad Meeting and the Sandstorm Meeting will be announced by way of press release at a later date.

Nomad’s principal shareholders, Orion Mine Finance Fund II LP and Orion Mine Finance Fund III LP (collectively, “Orion”), have entered into irrevocable voting support agreements with Sandstorm pursuant to which Orion has agreed to vote all of its Nomad Shares, representing in total approximately 61% of the Nomad Shares on a fully diluted basis, in favour of the Transaction. Directors and officers of Nomad, holding a total of approximately 5% of the Nomad Shares on a fully diluted basis, have also entered into voting support agreements with Sandstorm, pursuant to which they have agreed to vote their Nomad Shares in favour of the Transaction.

In addition to the Nomad and Sandstorm shareholder approvals, the Transaction is subject to approval by the Superior Court of Québec, to regulatory approvals, including that of the Canadian Competition Bureau, the TSX and the New York Stock Exchange approvals for the listing of Sandstorm Shares, as well as other customary closing conditions. The Arrangement Agreement contains customary reciprocal non-solicitation covenants, a right to match in favour of Sandstorm, and $20.6 million or $23.6 million in termination and reverse termination fees payable to Sandstorm or Nomad, respectively, in certain circumstances.

Closing of the Transaction is currently expected to occur in the second half of 2022.

Recommendations of the Board of Directors

The board of directors of Nomad, having received a unanimous recommendation from a special committee comprised solely of independent directors (the “Special Committee”), has unanimously approved the Transaction and determined that the Transaction is in the best interest of Nomad and fair to the shareholders of Nomad. Accordingly, the board of directors of Nomad unanimously recommends the shareholders of Nomad to vote in favour of the Transaction.

Advisors

National Bank Financial acted as financial advisor to the Special Committee and has provided an opinion to the board of directors of Nomad and to the Special Committee. Cormark Securities has provided an independent opinion to the Special Committee. Each opinion to the effect that, subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by the shareholders of Nomad in connection with the Transaction is fair, from a financial point of view, to shareholders of Nomad.

Fasken Martineau DuMoulin acted as legal advisor to Nomad and the Special Committee in connection with the Transaction.

Further Information

Further information regarding the Transaction will be included in a management information circular Nomad will prepare, file and mail to its shareholders in advance of the Nomad Meeting. Copies of the Arrangement Agreement and of the management information circular will be available on Nomad’s corporate profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.

ABOUT NOMAD ROYALTY COMPANY

Nomad Royalty Company Ltd. is a gold & silver royalty company that purchases rights to a percentage of the gold or silver produced from a mine, for the life of the mine. Nomad owns a portfolio of 22 royalty and stream assets, of which 8 are on currently producing mines. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold & silver streams and royalties. For more information please visit: www.nomadroyalty.com.

ABOUT SANDSTORM GOLD ROYALTIES

Sandstorm is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. After the Transaction and BaseCore Transaction close, Sandstorm will have acquired a portfolio of 260 royalties, of which 39 of the underlying mines are producing. Sandstorm plans to grow and diversify its low-cost production profile through the acquisition of additional gold royalties. For more information visit: www.sandstormgold.com.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable U.S. safe harbours provisions (collectively, “forward-looking statements”). The forward-looking statements contained in this press release are expressly qualified by this cautionary statement and readers are cautioned not to put undue reliance on them.

Forward-looking statements in this press release may include, without limitation, statements other than statements of historical facts, including regarding: the anticipated benefits of the Transaction to shareholders of Nomad; the structure and estimated value of the Transaction; the anticipated completion and timing of completion of the Transaction; the ability to obtain required court, shareholder and regulatory approvals for the Transaction, the timing of obtaining such approvals; current expectations, estimates and projections of the proforma combined entity; the combined entity’s size and scale; the combined entity’s financial position, including expectations regarding liquidity and cost of capital; the expected pro forma financial outlook of the combined entity; and the outcome or closing of the BaseCore Transaction and the Spin-out Transaction. When used in this press release, words such as “will”, “expect”, “potential”, “objective”, “becoming”, “subject to”, “expected”, “to be”, ”look forward”, “intends”, “plans”, and similar expressions, as well as phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “occur” or “be achieved”, or the negative connotation of such terms, are intended to identify these forward-looking statements.

Forward-looking statements are based on certain key expectations and assumptions made by Nomad’s management. Although Nomad believes that the expectations and assumptions on which such forward-looking statements are based on are reasonable at the time they were made, there can be no assurance that they will prove to be correct. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond Nomad’s control, and which may cause actual results and development to materially differ from those expressed or implied by such forward-looking statements. Such risks and uncertainties and other factors include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the ability to consummate the Transaction; that the Transaction may not be completed on the terms and conditions or the timing currently anticipated or that it may not be completed at all; the ability to obtain court, shareholder and regulatory approvals, the risk that such approvals may not be obtained in a timely manner or at all and the risk that such approvals may be obtained on conditions that are not anticipated; the satisfaction of other conditions precedent to the Transaction; unanticipated difficulties or expenditures relating to the Transaction; material adverse effects on the business, properties and assets of Nomad or Sandstorm; the potential adverse impact of the announcement or consummation of the Transaction on Nomad’s and Sandstorm’s relationships with third parties; the outcome of legal proceedings that may be instituted against Nomad in relation to the Arrangement Agreement; fluctuation in the price of the Sandstorm Shares; fluctuations in gold, silver and iron ore prices; the failure to comply with the Arrangement Agreement resulting in Nomad being required to pay the termination fee and the termination fee having a material adverse effect on Nomad’s financial position; the possibility that the BaseCore Transaction and/or the Spin-out Transaction will not be completed on the terms and conditions or the timing currently contemplated, and that one or both of them may not be completed at all; as well as additional risks and uncertainties inherent to Nomad’s business, not currently known by Nomad, that are out of Nomad’s control or that Nomad currently deems to be immaterial, which could also have a material adverse effect on Nomad or on its ability to consummate the Transaction.

Forward-looking statements contained in this press release are made as of the date of this press release. Nomad disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. If Nomad updates any one or more forward-looking statements, no inference should be drawn that Nomad will make additional updates with respect to those forward-looking statements.

TERMS OF THE AGREEMENT

  • Advance Deposit: Stream Purchasers to fund an advance deposit of $200 million to Ivanplats ($75 million attributable to Nomad), of which $50 million ($18.75 million attributable to Nomad) is expected to be paid in Q4 2021 (the “First Deposit”) and $150 million ($56.25 million attributable to Nomad) is expected to be paid in the second half of 2022 (the “Second Deposit”). Funding of the First Deposit will coincide with the closing of the transaction. Funding of the Second Deposit is expected during the second half of 2022 and will be conditional upon satisfaction of certain conditions precedent.
  • Gold Stream: Under the Gold Stream, the Stream Purchasers will be entitled to delivery of 100% of payable gold production (37.5% attributable to Nomad) until 350,000 ounces of gold have been delivered to the Stream Purchasers (131,250 ounces of gold attributable to Nomad), 80% of payable gold production (30% attributable to Nomad) until 685,280 ounces have been delivered (256,980 ounces of gold attributable to Nomad), and 5% of payable gold production thereafter from the stream area as long as certain conditions are met.
  • Payability: The Gold Stream will be based on all recovered gold from Platreef, subject to a fixed gold payability of 80%.
  • Cash Payment: Nomad will pay the Seller ongoing payments, at the time of each delivery, equal to the lower of the market price of gold or $100/oz for each ounce of refined gold delivered under the Gold Stream until 685,280 ounces of gold have been delivered to the Stream Purchasers, and an ongoing price of 80% of the spot gold price for each ounce of gold delivered thereafter.
  • Exploration Upside: Significant exploration potential exists immediately outside the area of Inferred Mineral Resources that has not been explored by Ivanhoe. Four targets have been defined in areas that are contiguous with the current Mineral Resource areas at Platreef.

Platreef Mineralization

MINERALIZATION AT THE PLATREEF PROJECT IS OPEN TO EXPANSION TO THE SOUTH AND WEST, BEYOND THE AREA OF THE CURRENT MINERAL RESOURCES. INDICATED RESOURCES ARE SHOWN IN GREEN AND INFERRED RESOURCES ARE SHOWN IN BLUE4

Platreef Construction Visit

MEMBERS OF THE NOMAD AND ORION TEAMS WITH MEMBERS OF PLATREEF’S MINE DEVELOPMENT TEAM AT THE FOUNDATION FOR THE SHAFT 2 HEADFRAME THAT IS UNDER CONSTRUCTION

ESG

Nomad is dedicated to promoting responsible mining practices and supporting the communities where we live and operate. By joining the United Nations Global Compact on December 15, 2020, Nomad committed to voluntarily aligning its operations and strategy with the ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. Nomad strives to be a leader in ESG by investing in both direct and indirect sustainable development initiatives, aligned with the Sustainable Development Goals important to our business. As such Nomad plans to focus on Quality Education; Gender Equality; Clean Water and Sanitation; and Climate Action.

ABOUT THE PLATREEF PROJECT

The Platreef Project is owned by Ivanplats (Pty) Ltd, which is 64%-owned by Ivanhoe Mines. A 26% interest is held by Ivanplats’ historically-disadvantaged, broad-based, black economic empowerment (“B-BBEE”) partners, which include 20 local host communities with approximately 150,000 people, project employees and local entrepreneurs. Ivanplats reached Level 4 contributor status in its most recent verification assessment on the B-BBEE scorecard. A Japanese consortium of ITOCHU Corporation, Japan Oil, Gas and Metals National Corporation, and Japan Gas Corporation, owns a 10% interest in Ivanplats, which it acquired in two tranches for a total investment of $290 million.

The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper and gold mineralization on the Northern Limb of the Bushveld Igneous Complex in Limpopo Province – approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of Mokopane.

On the Northern Limb, platinum-group metals mineralization is primarily hosted within the Platreef, a mineralized sequence that is traced more than 30 kilometres along strike. Ivanhoe’s Platreef Project, within the Platreef’s southern sector, is comprised of two contiguous properties: Turfspruit and Macalacaskop. Turfspruit, the northernmost property, is contiguous with, and along strike from, Anglo Platinum’s Mogalakwena group of mining operations and properties.

Since 2007, Ivanhoe has focused its exploration and development activities on defining and advancing the down-dip extension of its original discovery at Platreef, now known as the Flatreef Deposit, which is amenable to highly-mechanized, underground mining methods. The Flatreef area lies entirely on the Turfspruit and Macalacaskop properties that form part of the company’s mining right.

ABOUT IVANHOE MINES LTD.

Ivanhoe Mines Ltd. is a Canadian mining company focused on advancing its three principal joint-venture projects in Southern Africa: the development of major new, mechanized, underground mines at the Kamoa-Kakula discoveries in the Democratic Republic of Congo (“DRC”) and at the Platreef palladium-platinum-nickel-copper-rhodium-gold discovery in South Africa; and the extensive redevelopment and upgrading of the historic Kipushi zinc-copper-germanium-silver mine, also in the DRC. Kamoa-Kakula and Kipushi will be powered by clean, renewable hydroelectricity and will be among the world’s lowest greenhouse gas emitters per unit of metal produced. Ivanhoe also is exploring for new copper discoveries on its wholly-owned Western Foreland exploration licences in the DRC, near the Kamoa-Kakula Project.

QUALIFIED PERSON

Vincent Cardin-Tremblay, P. Geo., Vice President, Geology of Nomad is the “Qualified Person” as defined in NI 43-101 who has reviewed and approved the technical content of this news release.

ABOUT NOMAD

Nomad Royalty Company Ltd. is a gold & silver royalty company that purchases rights to a percentage of the gold or silver produced from a mine, for the life of the mine. Nomad owns a portfolio of 15 royalty and stream assets, of which 8 are on currently producing mines. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold & silver streams and royalties.

Sources:

1 : 3PE+Au means: platinum, palladium, rhodium and gold.
2 : Technical report entitled “Platreef Integrated Development Plan 2020” with an effective date of December 6, 2020, a copy of which is available on the Ivanhoe Mines Ltd.’s SEDAR profile at www.sedar.com.
3 : Ivanhoe’s press release dated December 8, 2021 entitled: “Platreef Mine secures US$200 million gold stream financing and additional US$100 million palladium and platinum stream”, a copy of which is available on the Ivanhoe Mines Ltd.’s SEDAR profile at www.sedar.com
4 : Technical information found on Ivanhoe Mines Ltd.’s website at www.ivanhoemines.com/projects/platreef-project/

 

Forward-looking statements

Certain statements contained in this press release may be deemed “forward-looking statements”. All statements in this release, other than statements of historical fact, that address events or developments that Nomad expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential”, “scheduled” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur including, without limitation, the satisfaction of all conditions precedent for funding the First Deposit and Second Deposit under the Gold Stream and the realization of the anticipated benefits of this transaction. Although Nomad believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include, the impossibility to proceed with or the timing for the closing of the First Deposit and/or Second Deposit, the timing for the development of Platreef, including for the first concentrate production, the changeover of the shaft 1 and the construction of the shaft 2, the timing for the delivery of a definitive feasibility study on Platreef, the timing for the delivery and use of emissions-free battery-electric underground fleet at Platreef, the achievement of the estimated production rates at Platreef, the amount of estimated reserves and resources at Platreef, the potential expansion of the Platreef project, the estimated life of mine for Platreef, the fluctuations in the prices of the primary commodities that drive royalty and stream revenue, Nomad’s royalty and stream interests, access to skilled consultants, results of mining operations, exploration and development activities for properties with respect to which Nomad holds a royalty or stream, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment, timeliness of government or court approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations, market prices, continued availability of capital and financing, general economic, market and business conditions, risks relating to the Gold Stream and its completion; and the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated or intended. Nomad cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the forward-looking statements contained herein should carefully consider the above factors as well as the uncertainties they represent and the risks they entail. Nomad believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. Nomad undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.

Nomad Royalty Announces Friendly Acquisition By Sandstorm Gold

Transaction Creates The Largest, Pure-Play, Highest Growth & Most Liquid Mid-Tier Royalty Company

Montreal, Québec – May 2, 2022

(in U.S. dollars unless otherwise noted)

  • Nomad shareholders to receive significant premium of approximately 34% based on the 20-day volume-weighted average prices of both companies.
  • Nomad shareholders maintain meaningful ownership in Sandstorm’s high-quality portfolio of assets: Nomad shareholders will hold 28% of Sandstorm at closing of the Transaction.
  • Nomad shareholders to benefit from increased scale: Following the closing of the Transaction, Sandstorm will be the largest, highest-growth, and most liquid mid-tier royalty and streaming company.
  • Continued exposure to Nomad’s core assets’ significant operating and exploration upside potential: Greenstone, Platreef, and Cortez (Robertson deposit) to be a significant part of Sandstorm’s future growth.
  • Industry leading portfolio diversification: At the closing of the Transaction, Sandstorm’s resulting portfolio will total 260 streams and royalties, of which 39 are cash flowing with no asset contributing more than 15% to Sandstorm’s net asset value (“NAV”) on analyst consensus estimates.
  • Significantly improved trading liquidity and capital markets exposure: Sandstorm trades on average over $19 million shares per day and also benefits from inclusion in indices such as the S&P/TSX Capped Composite.
  • Nomad shareholders continue to benefit from ongoing return of capital to shareholders: Participation in Sandstorm’s quarterly dividend.

Nomad Royalty Company Ltd. (“Nomad” or the “Company”) (TSX : NSR, NYSE: NSR) is pleased to announce today that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”) (TSX: SSL, NYSE: SAND), pursuant to which Sandstorm will acquire all of the issued and outstanding shares of Nomad (the “Nomad Shares”) in an all-share transaction (the “Transaction”) valued at approximately C$755 million. The Transaction will be effected by way of a court-approved plan of arrangement, is subject to certain regulatory and shareholder approvals and is expected to close in the second half of 2022. Under the terms of the Transaction, shareholders of Nomad will receive 1.21 common shares of Sandstorm (the “Sandstorm Shares”) for each Nomad Share held. The consideration implies a value of approximately C$11.57 per Nomad Share based on the closing price of the Sandstorm Shares on the Toronto Stock Exchange (“TSX”) on April 29, 2022 and represents a premium of 21% to the closing price of the Nomad Shares as at the same date and a premium of 34% on the 20-day volume weighted average price of the Nomad Shares and Sandstorm Shares on the TSX for the period ending on April 29, 2022.

“Nomad has executed and delivered on its commitment to create value for our shareholders through our disciplined transaction-driven strategy. Today’s transaction builds on our vision to create a pure-play, highly diversified, cash-flow focused royalty & streaming company with peer-leading growth. Catalyzing the creation of the next large royalty company has always been our objective,” commented Vincent Metcalfe, CEO of Nomad.

“Today’s announcement propels Sandstorm forward in both size and scale while solidifying Sandstorm’s position amongst its peers as the highest-growth streaming and royalty company. We see tremendous value in Nomad’s high-growth precious metals focused portfolio and in the combined portfolio,” commented Nolan Watson, President & CEO of Sandstorm.

BASECORE TRANSACTION

Concurrent with the Transaction, Sandstorm has also agreed to acquire nine royalties and one stream (the “BaseCore Portfolio”) from BaseCore Metals LP (“BaseCore”) for total consideration of $525 million, consisting of $425 million cash and $100 million Sandstorm Shares (the “BaseCore Transaction”). The cash consideration for the acquisition of the BaseCore Portfolio will be funded from Sandstorm’s newly upsized $500 million revolving credit facility to be implemented before closing of BaseCore Transaction.

BaseCore is an entity equally owned by affiliates of Glencore Plc and Ontario Teachers’ Pension Plan that holds a high-quality, long-life portfolio that includes 10 royalty and stream assets, of which three are on currently producing assets, including a 1.66% net profits interest (“NPI”) royalty on the world-class Antamina copper mine located in Peru.

The BaseCore Transaction is expected to close in 4–6 weeks and is subject to regulatory approvals including the approval of the TSX for the listing of the Sandstorm Shares, the Canadian Competition Bureau, waiver of rights of first offer or refusal on certain exploration stage royalties, and other customary conditions for a transaction of this nature.

ANTAMINA ROYALTY SPIN-OUT AND SILVER STREAM WITH HORIZON

Concurrent with the BaseCore Transaction, Sandstorm has signed an amended and restated letter of intent with Royalty North Partners Ltd. (“RNP”), to become “Horizon Copper”, whereby Sandstorm will sell the acquired 1.66% Antamina NPI royalty to Horizon and Sandstorm will retain a long-life silver stream on the Antamina mine, along with a portion of the post-stream NPI royalty (the “Spin-Out Transaction”).

The business intent of Horizon Copper is to actively grow its existing portfolio of assets, with a focus on copper projects. The subsequent spin-out of the Antamina NPI will position Horizon Copper as a competitive copper company with a portfolio of high-quality cash-flowing and development stage copper assets. This transformative transaction provides Horizon Copper with the size and scale required to further grow and diversify the company, further strengthening the strategic partnership opportunities with Sandstorm.

The full consideration that Horizon Copper will issue to Sandstorm under the Spin-Out Transaction includes:

  • 1.66% Antamina Silver Stream: Sandstorm will receive 1.66% of silver based on production from the Antamina mine with ongoing payments equal to 2.5% of the silver spot price (the “Antamina Silver Stream”).
  • 0.55% Antamina Royalty: Sandstorm will receive approximately one-third of the Antamina NPI, paid net of the Antamina Silver Stream servicing commitments (the “Antamina Residual Royalty”).
  • $50 million Cash Payment: Horizon Copper will raise $50 million by way of equity financing, which will then be payable to Sandstorm on closing of the Spin-Out Transaction.
  • $105 million Debenture: Sandstorm will be issued a $105 million debenture (the “Debenture”). The Debenture is expected to bear an interest rate of 3% over a 10-year term. Principal repayments are subject to a 100% cash sweep of the excess cash flow Horizon Copper receives from the 1.66% Antamina NPI after the Antamina Silver Stream and Antamina Residual Royalty obligations are paid. Prepayment of the Debenture can occur at any time prior to maturity without penalty.
  • $26 million in Horizon Copper Shares: Horizon Copper will issue Sandstorm approximately $26 million worth of Horizon Copper shares to maintain Sandstorm’s 34% equity interest.

The Antamina Silver Stream and the Debenture will be senior obligations of Horizon Copper, secured by the 1.66% Antamina NPI.

The Spin-Out Transaction is subject to several conditions, including but not limited to, execution of definitive agreements, TSX-V acceptance, disinterested RNP shareholder approval and Horizon Copper raising $50 million.

The Transaction is not conditional on closing of the BaseCore Transaction or the Spin-Out Transaction. The full particulars of the Transaction, BaseCore Transaction, and Spin-Out Transaction will be described in detail in Nomad’s management information circular to be prepared in accordance with applicable securities legislation.

Upon completion of the Transaction and BaseCore Transaction, existing shareholders of Nomad and Sandstorm will respectively own approximately 28% and 67% of the proforma combined entity, and existing shareholders of BaseCore will own approximately 5%, calculated on the date hereof.

TRANSACTION OVERVIEW

The Transaction will be effected by way of a court-approved plan of arrangement under the Canadian Business Corporation Act and will be subject to the approval of 66 2/3% of the votes cast by shareholders of Nomad at a special meeting of the shareholders of Nomad (the “Nomad Meeting”) and the approval of a simple majority of the vote cast by shareholders of Nomad at the Nomad Meeting, excluding votes cast by the senior officers, as required under Multilateral Instrument 61-101.

Sandstorm will be required under the policies of the TSX to obtain the approval of a simple majority of the votes cast by shareholders of Sandstorm at a special meeting of the shareholders of Sandstorm (the “Sandstorm Meeting”). The dates of the Nomad Meeting and the Sandstorm Meeting will be announced by way of press release at a later date.

Nomad’s principal shareholders, Orion Mine Finance Fund II LP and Orion Mine Finance Fund III LP (collectively, “Orion”), have entered into irrevocable voting support agreements with Sandstorm pursuant to which Orion has agreed to vote all of its Nomad Shares, representing in total approximately 61% of the Nomad Shares on a fully diluted basis, in favour of the Transaction. Directors and officers of Nomad, holding a total of approximately 5% of the Nomad Shares on a fully diluted basis, have also entered into voting support agreements with Sandstorm, pursuant to which they have agreed to vote their Nomad Shares in favour of the Transaction.

In addition to the Nomad and Sandstorm shareholder approvals, the Transaction is subject to approval by the Superior Court of Québec, to regulatory approvals, including that of the Canadian Competition Bureau, the TSX and the New York Stock Exchange approvals for the listing of Sandstorm Shares, as well as other customary closing conditions. The Arrangement Agreement contains customary reciprocal non-solicitation covenants, a right to match in favour of Sandstorm, and $20.6 million or $23.6 million in termination and reverse termination fees payable to Sandstorm or Nomad, respectively, in certain circumstances.

Closing of the Transaction is currently expected to occur in the second half of 2022.

Recommendations of the Board of Directors

The board of directors of Nomad, having received a unanimous recommendation from a special committee comprised solely of independent directors (the “Special Committee”), has unanimously approved the Transaction and determined that the Transaction is in the best interest of Nomad and fair to the shareholders of Nomad. Accordingly, the board of directors of Nomad unanimously recommends the shareholders of Nomad to vote in favour of the Transaction.

Advisors

National Bank Financial acted as financial advisor to the Special Committee and has provided an opinion to the board of directors of Nomad and to the Special Committee. Cormark Securities has provided an independent opinion to the Special Committee. Each opinion to the effect that, subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by the shareholders of Nomad in connection with the Transaction is fair, from a financial point of view, to shareholders of Nomad.

Fasken Martineau DuMoulin acted as legal advisor to Nomad and the Special Committee in connection with the Transaction.

Further Information

Further information regarding the Transaction will be included in a management information circular Nomad will prepare, file and mail to its shareholders in advance of the Nomad Meeting. Copies of the Arrangement Agreement and of the management information circular will be available on Nomad’s corporate profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.

ABOUT NOMAD ROYALTY COMPANY

Nomad Royalty Company Ltd. is a gold & silver royalty company that purchases rights to a percentage of the gold or silver produced from a mine, for the life of the mine. Nomad owns a portfolio of 22 royalty and stream assets, of which 8 are on currently producing mines. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold & silver streams and royalties. For more information please visit: www.nomadroyalty.com.

ABOUT SANDSTORM GOLD ROYALTIES

Sandstorm is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. After the Transaction and BaseCore Transaction close, Sandstorm will have acquired a portfolio of 260 royalties, of which 39 of the underlying mines are producing. Sandstorm plans to grow and diversify its low-cost production profile through the acquisition of additional gold royalties. For more information visit: www.sandstormgold.com.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable U.S. safe harbours provisions (collectively, “forward-looking statements”). The forward-looking statements contained in this press release are expressly qualified by this cautionary statement and readers are cautioned not to put undue reliance on them.

Forward-looking statements in this press release may include, without limitation, statements other than statements of historical facts, including regarding: the anticipated benefits of the Transaction to shareholders of Nomad; the structure and estimated value of the Transaction; the anticipated completion and timing of completion of the Transaction; the ability to obtain required court, shareholder and regulatory approvals for the Transaction, the timing of obtaining such approvals; current expectations, estimates and projections of the proforma combined entity; the combined entity’s size and scale; the combined entity’s financial position, including expectations regarding liquidity and cost of capital; the expected pro forma financial outlook of the combined entity; and the outcome or closing of the BaseCore Transaction and the Spin-out Transaction. When used in this press release, words such as “will”, “expect”, “potential”, “objective”, “becoming”, “subject to”, “expected”, “to be”, ”look forward”, “intends”, “plans”, and similar expressions, as well as phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “occur” or “be achieved”, or the negative connotation of such terms, are intended to identify these forward-looking statements.

Forward-looking statements are based on certain key expectations and assumptions made by Nomad’s management. Although Nomad believes that the expectations and assumptions on which such forward-looking statements are based on are reasonable at the time they were made, there can be no assurance that they will prove to be correct. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond Nomad’s control, and which may cause actual results and development to materially differ from those expressed or implied by such forward-looking statements. Such risks and uncertainties and other factors include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the ability to consummate the Transaction; that the Transaction may not be completed on the terms and conditions or the timing currently anticipated or that it may not be completed at all; the ability to obtain court, shareholder and regulatory approvals, the risk that such approvals may not be obtained in a timely manner or at all and the risk that such approvals may be obtained on conditions that are not anticipated; the satisfaction of other conditions precedent to the Transaction; unanticipated difficulties or expenditures relating to the Transaction; material adverse effects on the business, properties and assets of Nomad or Sandstorm; the potential adverse impact of the announcement or consummation of the Transaction on Nomad’s and Sandstorm’s relationships with third parties; the outcome of legal proceedings that may be instituted against Nomad in relation to the Arrangement Agreement; fluctuation in the price of the Sandstorm Shares; fluctuations in gold, silver and iron ore prices; the failure to comply with the Arrangement Agreement resulting in Nomad being required to pay the termination fee and the termination fee having a material adverse effect on Nomad’s financial position; the possibility that the BaseCore Transaction and/or the Spin-out Transaction will not be completed on the terms and conditions or the timing currently contemplated, and that one or both of them may not be completed at all; as well as additional risks and uncertainties inherent to Nomad’s business, not currently known by Nomad, that are out of Nomad’s control or that Nomad currently deems to be immaterial, which could also have a material adverse effect on Nomad or on its ability to consummate the Transaction.

Forward-looking statements contained in this press release are made as of the date of this press release. Nomad disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. If Nomad updates any one or more forward-looking statements, no inference should be drawn that Nomad will make additional updates with respect to those forward-looking statements.

Nomad Royalty Announces Friendly Acquisition By Sandstorm Gold

Transaction Creates The Largest, Pure-Play, Highest Growth & Most Liquid Mid-Tier Royalty Company

Montreal, Québec – May 2, 2022

(in U.S. dollars unless otherwise noted)

  • Nomad shareholders to receive significant premium of approximately 34% based on the 20-day volume-weighted average prices of both companies.
  • Nomad shareholders maintain meaningful ownership in Sandstorm’s high-quality portfolio of assets: Nomad shareholders will hold 28% of Sandstorm at closing of the Transaction.
  • Nomad shareholders to benefit from increased scale: Following the closing of the Transaction, Sandstorm will be the largest, highest-growth, and most liquid mid-tier royalty and streaming company.
  • Continued exposure to Nomad’s core assets’ significant operating and exploration upside potential: Greenstone, Platreef, and Cortez (Robertson deposit) to be a significant part of Sandstorm’s future growth.
  • Industry leading portfolio diversification: At the closing of the Transaction, Sandstorm’s resulting portfolio will total 260 streams and royalties, of which 39 are cash flowing with no asset contributing more than 15% to Sandstorm’s net asset value (“NAV”) on analyst consensus estimates.
  • Significantly improved trading liquidity and capital markets exposure: Sandstorm trades on average over $19 million shares per day and also benefits from inclusion in indices such as the S&P/TSX Capped Composite.
  • Nomad shareholders continue to benefit from ongoing return of capital to shareholders: Participation in Sandstorm’s quarterly dividend.

Nomad Royalty Company Ltd. (“Nomad” or the “Company”) (TSX : NSR, NYSE: NSR) is pleased to announce today that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”) (TSX: SSL, NYSE: SAND), pursuant to which Sandstorm will acquire all of the issued and outstanding shares of Nomad (the “Nomad Shares”) in an all-share transaction (the “Transaction”) valued at approximately C$755 million. The Transaction will be effected by way of a court-approved plan of arrangement, is subject to certain regulatory and shareholder approvals and is expected to close in the second half of 2022. Under the terms of the Transaction, shareholders of Nomad will receive 1.21 common shares of Sandstorm (the “Sandstorm Shares”) for each Nomad Share held. The consideration implies a value of approximately C$11.57 per Nomad Share based on the closing price of the Sandstorm Shares on the Toronto Stock Exchange (“TSX”) on April 29, 2022 and represents a premium of 21% to the closing price of the Nomad Shares as at the same date and a premium of 34% on the 20-day volume weighted average price of the Nomad Shares and Sandstorm Shares on the TSX for the period ending on April 29, 2022.

“Nomad has executed and delivered on its commitment to create value for our shareholders through our disciplined transaction-driven strategy. Today’s transaction builds on our vision to create a pure-play, highly diversified, cash-flow focused royalty & streaming company with peer-leading growth. Catalyzing the creation of the next large royalty company has always been our objective,” commented Vincent Metcalfe, CEO of Nomad.

“Today’s announcement propels Sandstorm forward in both size and scale while solidifying Sandstorm’s position amongst its peers as the highest-growth streaming and royalty company. We see tremendous value in Nomad’s high-growth precious metals focused portfolio and in the combined portfolio,” commented Nolan Watson, President & CEO of Sandstorm.

BASECORE TRANSACTION

Concurrent with the Transaction, Sandstorm has also agreed to acquire nine royalties and one stream (the “BaseCore Portfolio”) from BaseCore Metals LP (“BaseCore”) for total consideration of $525 million, consisting of $425 million cash and $100 million Sandstorm Shares (the “BaseCore Transaction”). The cash consideration for the acquisition of the BaseCore Portfolio will be funded from Sandstorm’s newly upsized $500 million revolving credit facility to be implemented before closing of BaseCore Transaction.

BaseCore is an entity equally owned by affiliates of Glencore Plc and Ontario Teachers’ Pension Plan that holds a high-quality, long-life portfolio that includes 10 royalty and stream assets, of which three are on currently producing assets, including a 1.66% net profits interest (“NPI”) royalty on the world-class Antamina copper mine located in Peru.

The BaseCore Transaction is expected to close in 4–6 weeks and is subject to regulatory approvals including the approval of the TSX for the listing of the Sandstorm Shares, the Canadian Competition Bureau, waiver of rights of first offer or refusal on certain exploration stage royalties, and other customary conditions for a transaction of this nature.

ANTAMINA ROYALTY SPIN-OUT AND SILVER STREAM WITH HORIZON

Concurrent with the BaseCore Transaction, Sandstorm has signed an amended and restated letter of intent with Royalty North Partners Ltd. (“RNP”), to become “Horizon Copper”, whereby Sandstorm will sell the acquired 1.66% Antamina NPI royalty to Horizon and Sandstorm will retain a long-life silver stream on the Antamina mine, along with a portion of the post-stream NPI royalty (the “Spin-Out Transaction”).

The business intent of Horizon Copper is to actively grow its existing portfolio of assets, with a focus on copper projects. The subsequent spin-out of the Antamina NPI will position Horizon Copper as a competitive copper company with a portfolio of high-quality cash-flowing and development stage copper assets. This transformative transaction provides Horizon Copper with the size and scale required to further grow and diversify the company, further strengthening the strategic partnership opportunities with Sandstorm.

The full consideration that Horizon Copper will issue to Sandstorm under the Spin-Out Transaction includes:

  • 1.66% Antamina Silver Stream: Sandstorm will receive 1.66% of silver based on production from the Antamina mine with ongoing payments equal to 2.5% of the silver spot price (the “Antamina Silver Stream”).
  • 0.55% Antamina Royalty: Sandstorm will receive approximately one-third of the Antamina NPI, paid net of the Antamina Silver Stream servicing commitments (the “Antamina Residual Royalty”).
  • $50 million Cash Payment: Horizon Copper will raise $50 million by way of equity financing, which will then be payable to Sandstorm on closing of the Spin-Out Transaction.
  • $105 million Debenture: Sandstorm will be issued a $105 million debenture (the “Debenture”). The Debenture is expected to bear an interest rate of 3% over a 10-year term. Principal repayments are subject to a 100% cash sweep of the excess cash flow Horizon Copper receives from the 1.66% Antamina NPI after the Antamina Silver Stream and Antamina Residual Royalty obligations are paid. Prepayment of the Debenture can occur at any time prior to maturity without penalty.
  • $26 million in Horizon Copper Shares: Horizon Copper will issue Sandstorm approximately $26 million worth of Horizon Copper shares to maintain Sandstorm’s 34% equity interest.

The Antamina Silver Stream and the Debenture will be senior obligations of Horizon Copper, secured by the 1.66% Antamina NPI.

The Spin-Out Transaction is subject to several conditions, including but not limited to, execution of definitive agreements, TSX-V acceptance, disinterested RNP shareholder approval and Horizon Copper raising $50 million.

The Transaction is not conditional on closing of the BaseCore Transaction or the Spin-Out Transaction. The full particulars of the Transaction, BaseCore Transaction, and Spin-Out Transaction will be described in detail in Nomad’s management information circular to be prepared in accordance with applicable securities legislation.

Upon completion of the Transaction and BaseCore Transaction, existing shareholders of Nomad and Sandstorm will respectively own approximately 28% and 67% of the proforma combined entity, and existing shareholders of BaseCore will own approximately 5%, calculated on the date hereof.

TRANSACTION OVERVIEW

The Transaction will be effected by way of a court-approved plan of arrangement under the Canadian Business Corporation Act and will be subject to the approval of 66 2/3% of the votes cast by shareholders of Nomad at a special meeting of the shareholders of Nomad (the “Nomad Meeting”) and the approval of a simple majority of the vote cast by shareholders of Nomad at the Nomad Meeting, excluding votes cast by the senior officers, as required under Multilateral Instrument 61-101.

Sandstorm will be required under the policies of the TSX to obtain the approval of a simple majority of the votes cast by shareholders of Sandstorm at a special meeting of the shareholders of Sandstorm (the “Sandstorm Meeting”). The dates of the Nomad Meeting and the Sandstorm Meeting will be announced by way of press release at a later date.

Nomad’s principal shareholders, Orion Mine Finance Fund II LP and Orion Mine Finance Fund III LP (collectively, “Orion”), have entered into irrevocable voting support agreements with Sandstorm pursuant to which Orion has agreed to vote all of its Nomad Shares, representing in total approximately 61% of the Nomad Shares on a fully diluted basis, in favour of the Transaction. Directors and officers of Nomad, holding a total of approximately 5% of the Nomad Shares on a fully diluted basis, have also entered into voting support agreements with Sandstorm, pursuant to which they have agreed to vote their Nomad Shares in favour of the Transaction.

In addition to the Nomad and Sandstorm shareholder approvals, the Transaction is subject to approval by the Superior Court of Québec, to regulatory approvals, including that of the Canadian Competition Bureau, the TSX and the New York Stock Exchange approvals for the listing of Sandstorm Shares, as well as other customary closing conditions. The Arrangement Agreement contains customary reciprocal non-solicitation covenants, a right to match in favour of Sandstorm, and $20.6 million or $23.6 million in termination and reverse termination fees payable to Sandstorm or Nomad, respectively, in certain circumstances.

Closing of the Transaction is currently expected to occur in the second half of 2022.

Recommendations of the Board of Directors

The board of directors of Nomad, having received a unanimous recommendation from a special committee comprised solely of independent directors (the “Special Committee”), has unanimously approved the Transaction and determined that the Transaction is in the best interest of Nomad and fair to the shareholders of Nomad. Accordingly, the board of directors of Nomad unanimously recommends the shareholders of Nomad to vote in favour of the Transaction.

Advisors

National Bank Financial acted as financial advisor to the Special Committee and has provided an opinion to the board of directors of Nomad and to the Special Committee. Cormark Securities has provided an independent opinion to the Special Committee. Each opinion to the effect that, subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by the shareholders of Nomad in connection with the Transaction is fair, from a financial point of view, to shareholders of Nomad.

Fasken Martineau DuMoulin acted as legal advisor to Nomad and the Special Committee in connection with the Transaction.

Further Information

Further information regarding the Transaction will be included in a management information circular Nomad will prepare, file and mail to its shareholders in advance of the Nomad Meeting. Copies of the Arrangement Agreement and of the management information circular will be available on Nomad’s corporate profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.

ABOUT NOMAD ROYALTY COMPANY

Nomad Royalty Company Ltd. is a gold & silver royalty company that purchases rights to a percentage of the gold or silver produced from a mine, for the life of the mine. Nomad owns a portfolio of 22 royalty and stream assets, of which 8 are on currently producing mines. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold & silver streams and royalties. For more information please visit: www.nomadroyalty.com.

ABOUT SANDSTORM GOLD ROYALTIES

Sandstorm is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. After the Transaction and BaseCore Transaction close, Sandstorm will have acquired a portfolio of 260 royalties, of which 39 of the underlying mines are producing. Sandstorm plans to grow and diversify its low-cost production profile through the acquisition of additional gold royalties. For more information visit: www.sandstormgold.com.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable U.S. safe harbours provisions (collectively, “forward-looking statements”). The forward-looking statements contained in this press release are expressly qualified by this cautionary statement and readers are cautioned not to put undue reliance on them.

Forward-looking statements in this press release may include, without limitation, statements other than statements of historical facts, including regarding: the anticipated benefits of the Transaction to shareholders of Nomad; the structure and estimated value of the Transaction; the anticipated completion and timing of completion of the Transaction; the ability to obtain required court, shareholder and regulatory approvals for the Transaction, the timing of obtaining such approvals; current expectations, estimates and projections of the proforma combined entity; the combined entity’s size and scale; the combined entity’s financial position, including expectations regarding liquidity and cost of capital; the expected pro forma financial outlook of the combined entity; and the outcome or closing of the BaseCore Transaction and the Spin-out Transaction. When used in this press release, words such as “will”, “expect”, “potential”, “objective”, “becoming”, “subject to”, “expected”, “to be”, ”look forward”, “intends”, “plans”, and similar expressions, as well as phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “occur” or “be achieved”, or the negative connotation of such terms, are intended to identify these forward-looking statements.

Forward-looking statements are based on certain key expectations and assumptions made by Nomad’s management. Although Nomad believes that the expectations and assumptions on which such forward-looking statements are based on are reasonable at the time they were made, there can be no assurance that they will prove to be correct. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond Nomad’s control, and which may cause actual results and development to materially differ from those expressed or implied by such forward-looking statements. Such risks and uncertainties and other factors include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the ability to consummate the Transaction; that the Transaction may not be completed on the terms and conditions or the timing currently anticipated or that it may not be completed at all; the ability to obtain court, shareholder and regulatory approvals, the risk that such approvals may not be obtained in a timely manner or at all and the risk that such approvals may be obtained on conditions that are not anticipated; the satisfaction of other conditions precedent to the Transaction; unanticipated difficulties or expenditures relating to the Transaction; material adverse effects on the business, properties and assets of Nomad or Sandstorm; the potential adverse impact of the announcement or consummation of the Transaction on Nomad’s and Sandstorm’s relationships with third parties; the outcome of legal proceedings that may be instituted against Nomad in relation to the Arrangement Agreement; fluctuation in the price of the Sandstorm Shares; fluctuations in gold, silver and iron ore prices; the failure to comply with the Arrangement Agreement resulting in Nomad being required to pay the termination fee and the termination fee having a material adverse effect on Nomad’s financial position; the possibility that the BaseCore Transaction and/or the Spin-out Transaction will not be completed on the terms and conditions or the timing currently contemplated, and that one or both of them may not be completed at all; as well as additional risks and uncertainties inherent to Nomad’s business, not currently known by Nomad, that are out of Nomad’s control or that Nomad currently deems to be immaterial, which could also have a material adverse effect on Nomad or on its ability to consummate the Transaction.

Forward-looking statements contained in this press release are made as of the date of this press release. Nomad disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. If Nomad updates any one or more forward-looking statements, no inference should be drawn that Nomad will make additional updates with respect to those forward-looking statements.

Deliveries (ounces) Q1 2021 Q2 2021 Q3 2021 YTD 2021

Gold ¹

5,029

2,154

2,527

9,710

Silver

37,338

28,848

29,929

96,115

Deliveries – All Metals (GEOs) Q1 2021 Q2 2021 Q3 2021 YTD 2021

Precious Metals¹ ²

5,575

2,577

2,935

11,087

Copper³

n/a

217

1,837

2,054

Gold equivalent ounces – attributable to Nomad

5,575

2,794

4,772

13,141

The Company realized preliminary revenues(4) from its precious metal interests of $5.1 million and $19.4 million for the three and nine-month periods ended September 30, 2021, respectively, resulting in preliminary precious metals cash operating margin(4)(5) of $4.4 million and $16.4 million, respectively. Additionally, the total gross amount receivable from the Caserones copper royalty for the three-month period ended September 30, 2021 is estimated at $2.0 million (1,112 gold equivalent ounces(3) attributable to Nomad’s 67.5% ownership interest in CMC(6)). The Company received $1.7 million in September 2021 (942 attributable gold equivalent ounces) in connection with CMC’s Q2 2021 activities.

Notes:
Nomad has included certain performance measures in this press release that do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) including gold equivalent ounces, cash operating margin and cash costs of gold and silver sold. These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and other companies may calculate these measures differently. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

(1) Preliminary gold deliveries include gold equivalent ounces of cash settled amounts for the RDM and Moss net smelter return royalties.
(2) The Company’s royalty and stream revenues are converted to gold equivalent ounces by dividing revenues for a specific period by the average realized gold price per ounce for the gold stream revenues and by dividing revenues by the average gold price for the gold royalty revenues, for the respective period. Silver earned from royalty and stream agreements are converted to gold equivalent ounces by multiplying the silver ounces by the average silver price for the period and dividing by the average gold price for the period.
(3) The Company’s gross amount received or receivable from the Caserones copper royalty is converted to gold equivalent ounces by dividing the dividend received or receivable before taxes for a specific period by the average gold price, for the respective period.
(4) The financial information disclosed in this press release is preliminary, subject to final quarter-end closing adjustments, and may change materially.
(5) Cash operating margin is calculated by subtracting the cash costs of gold and silver sold from revenues. The Company presents cash operating margin as management and certain investors use this information to evaluate the Company’s performance in comparison to other streaming and royalty companies who present results on a similar basis as well as to evaluate the Company’s ability to generate cash flow.
(6) On August 31, 2021, the Company completed the acquisition of an additional 37.5% ownership interest in Compania Minera Caserones (“CMC”), a private Chilean company which holds the payment rights to 32.5% of a 2.88% NSR royalty on the Caserones copper mine in Chile representing an effective 0.651% NSR royalty (the “Caserones copper royalty”).

NOTICE OF Q3 2021 RESULTS RELEASE

The Company expects to release its results for the third quarter of 2021 on November 3, 2021, after market close.

QUALIFIED PERSON

Vincent Cardin-Tremblay, P. Geo., Vice President, Geology of Nomad Royalty is the “Qualified Person” as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects who has reviewed and approved the technical content of this news release.

ABOUT NOMAD

Nomad Royalty Company Ltd. is a gold & silver royalty company that purchases rights to a percentage of the gold or silver produced from a mine, for the life of the mine. Nomad owns a portfolio of 15 royalty and stream assets, of which 8 are on currently producing mines. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold & silver streams and royalties.

Nomad Royalty Company Ltd.

500-1275 ave. des Canadiens-de-Montréal

Montreal, Québec H3B 0G4

 

Forward-looking statements

Certain statements contained in this press release may be deemed “forward-looking statements”. All statements in this release, other than statements of historical fact, that address events or developments that Nomad expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential”, “scheduled” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Forward-looking statements in this press release include statements with respect to the amount to be received from the royalty interests. Although Nomad believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include the impossibility to acquire royalties, streams and to fund precious metal streams, gold prices, Nomad’s royalty and stream interests, access to skilled consultants, results of mining operations, exploration and development activities for properties with respect to which Nomad holds a royalty or stream, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment, timeliness of government or court approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations, market prices, continued availability of capital and financing and general economic, market or business conditions. Nomad cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the forward looking statements contained herein should carefully consider the above factors as well as the uncertainties they represent and the risks they entail. Nomad believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. Nomad undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.

Nomad Royalty Announces Friendly Acquisition By Sandstorm Gold

Transaction Creates The Largest, Pure-Play, Highest Growth & Most Liquid Mid-Tier Royalty Company

Montreal, Québec – May 2, 2022

(in U.S. dollars unless otherwise noted)

  • Nomad shareholders to receive significant premium of approximately 34% based on the 20-day volume-weighted average prices of both companies.
  • Nomad shareholders maintain meaningful ownership in Sandstorm’s high-quality portfolio of assets: Nomad shareholders will hold 28% of Sandstorm at closing of the Transaction.
  • Nomad shareholders to benefit from increased scale: Following the closing of the Transaction, Sandstorm will be the largest, highest-growth, and most liquid mid-tier royalty and streaming company.
  • Continued exposure to Nomad’s core assets’ significant operating and exploration upside potential: Greenstone, Platreef, and Cortez (Robertson deposit) to be a significant part of Sandstorm’s future growth.
  • Industry leading portfolio diversification: At the closing of the Transaction, Sandstorm’s resulting portfolio will total 260 streams and royalties, of which 39 are cash flowing with no asset contributing more than 15% to Sandstorm’s net asset value (“NAV”) on analyst consensus estimates.
  • Significantly improved trading liquidity and capital markets exposure: Sandstorm trades on average over $19 million shares per day and also benefits from inclusion in indices such as the S&P/TSX Capped Composite.
  • Nomad shareholders continue to benefit from ongoing return of capital to shareholders: Participation in Sandstorm’s quarterly dividend.

Nomad Royalty Company Ltd. (“Nomad” or the “Company”) (TSX : NSR, NYSE: NSR) is pleased to announce today that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”) (TSX: SSL, NYSE: SAND), pursuant to which Sandstorm will acquire all of the issued and outstanding shares of Nomad (the “Nomad Shares”) in an all-share transaction (the “Transaction”) valued at approximately C$755 million. The Transaction will be effected by way of a court-approved plan of arrangement, is subject to certain regulatory and shareholder approvals and is expected to close in the second half of 2022. Under the terms of the Transaction, shareholders of Nomad will receive 1.21 common shares of Sandstorm (the “Sandstorm Shares”) for each Nomad Share held. The consideration implies a value of approximately C$11.57 per Nomad Share based on the closing price of the Sandstorm Shares on the Toronto Stock Exchange (“TSX”) on April 29, 2022 and represents a premium of 21% to the closing price of the Nomad Shares as at the same date and a premium of 34% on the 20-day volume weighted average price of the Nomad Shares and Sandstorm Shares on the TSX for the period ending on April 29, 2022.

“Nomad has executed and delivered on its commitment to create value for our shareholders through our disciplined transaction-driven strategy. Today’s transaction builds on our vision to create a pure-play, highly diversified, cash-flow focused royalty & streaming company with peer-leading growth. Catalyzing the creation of the next large royalty company has always been our objective,” commented Vincent Metcalfe, CEO of Nomad.

“Today’s announcement propels Sandstorm forward in both size and scale while solidifying Sandstorm’s position amongst its peers as the highest-growth streaming and royalty company. We see tremendous value in Nomad’s high-growth precious metals focused portfolio and in the combined portfolio,” commented Nolan Watson, President & CEO of Sandstorm.

BASECORE TRANSACTION

Concurrent with the Transaction, Sandstorm has also agreed to acquire nine royalties and one stream (the “BaseCore Portfolio”) from BaseCore Metals LP (“BaseCore”) for total consideration of $525 million, consisting of $425 million cash and $100 million Sandstorm Shares (the “BaseCore Transaction”). The cash consideration for the acquisition of the BaseCore Portfolio will be funded from Sandstorm’s newly upsized $500 million revolving credit facility to be implemented before closing of BaseCore Transaction.

BaseCore is an entity equally owned by affiliates of Glencore Plc and Ontario Teachers’ Pension Plan that holds a high-quality, long-life portfolio that includes 10 royalty and stream assets, of which three are on currently producing assets, including a 1.66% net profits interest (“NPI”) royalty on the world-class Antamina copper mine located in Peru.

The BaseCore Transaction is expected to close in 4–6 weeks and is subject to regulatory approvals including the approval of the TSX for the listing of the Sandstorm Shares, the Canadian Competition Bureau, waiver of rights of first offer or refusal on certain exploration stage royalties, and other customary conditions for a transaction of this nature.

ANTAMINA ROYALTY SPIN-OUT AND SILVER STREAM WITH HORIZON

Concurrent with the BaseCore Transaction, Sandstorm has signed an amended and restated letter of intent with Royalty North Partners Ltd. (“RNP”), to become “Horizon Copper”, whereby Sandstorm will sell the acquired 1.66% Antamina NPI royalty to Horizon and Sandstorm will retain a long-life silver stream on the Antamina mine, along with a portion of the post-stream NPI royalty (the “Spin-Out Transaction”).

The business intent of Horizon Copper is to actively grow its existing portfolio of assets, with a focus on copper projects. The subsequent spin-out of the Antamina NPI will position Horizon Copper as a competitive copper company with a portfolio of high-quality cash-flowing and development stage copper assets. This transformative transaction provides Horizon Copper with the size and scale required to further grow and diversify the company, further strengthening the strategic partnership opportunities with Sandstorm.

The full consideration that Horizon Copper will issue to Sandstorm under the Spin-Out Transaction includes:

  • 1.66% Antamina Silver Stream: Sandstorm will receive 1.66% of silver based on production from the Antamina mine with ongoing payments equal to 2.5% of the silver spot price (the “Antamina Silver Stream”).
  • 0.55% Antamina Royalty: Sandstorm will receive approximately one-third of the Antamina NPI, paid net of the Antamina Silver Stream servicing commitments (the “Antamina Residual Royalty”).
  • $50 million Cash Payment: Horizon Copper will raise $50 million by way of equity financing, which will then be payable to Sandstorm on closing of the Spin-Out Transaction.
  • $105 million Debenture: Sandstorm will be issued a $105 million debenture (the “Debenture”). The Debenture is expected to bear an interest rate of 3% over a 10-year term. Principal repayments are subject to a 100% cash sweep of the excess cash flow Horizon Copper receives from the 1.66% Antamina NPI after the Antamina Silver Stream and Antamina Residual Royalty obligations are paid. Prepayment of the Debenture can occur at any time prior to maturity without penalty.
  • $26 million in Horizon Copper Shares: Horizon Copper will issue Sandstorm approximately $26 million worth of Horizon Copper shares to maintain Sandstorm’s 34% equity interest.

The Antamina Silver Stream and the Debenture will be senior obligations of Horizon Copper, secured by the 1.66% Antamina NPI.

The Spin-Out Transaction is subject to several conditions, including but not limited to, execution of definitive agreements, TSX-V acceptance, disinterested RNP shareholder approval and Horizon Copper raising $50 million.

The Transaction is not conditional on closing of the BaseCore Transaction or the Spin-Out Transaction. The full particulars of the Transaction, BaseCore Transaction, and Spin-Out Transaction will be described in detail in Nomad’s management information circular to be prepared in accordance with applicable securities legislation.

Upon completion of the Transaction and BaseCore Transaction, existing shareholders of Nomad and Sandstorm will respectively own approximately 28% and 67% of the proforma combined entity, and existing shareholders of BaseCore will own approximately 5%, calculated on the date hereof.

TRANSACTION OVERVIEW

The Transaction will be effected by way of a court-approved plan of arrangement under the Canadian Business Corporation Act and will be subject to the approval of 66 2/3% of the votes cast by shareholders of Nomad at a special meeting of the shareholders of Nomad (the “Nomad Meeting”) and the approval of a simple majority of the vote cast by shareholders of Nomad at the Nomad Meeting, excluding votes cast by the senior officers, as required under Multilateral Instrument 61-101.

Sandstorm will be required under the policies of the TSX to obtain the approval of a simple majority of the votes cast by shareholders of Sandstorm at a special meeting of the shareholders of Sandstorm (the “Sandstorm Meeting”). The dates of the Nomad Meeting and the Sandstorm Meeting will be announced by way of press release at a later date.

Nomad’s principal shareholders, Orion Mine Finance Fund II LP and Orion Mine Finance Fund III LP (collectively, “Orion”), have entered into irrevocable voting support agreements with Sandstorm pursuant to which Orion has agreed to vote all of its Nomad Shares, representing in total approximately 61% of the Nomad Shares on a fully diluted basis, in favour of the Transaction. Directors and officers of Nomad, holding a total of approximately 5% of the Nomad Shares on a fully diluted basis, have also entered into voting support agreements with Sandstorm, pursuant to which they have agreed to vote their Nomad Shares in favour of the Transaction.

In addition to the Nomad and Sandstorm shareholder approvals, the Transaction is subject to approval by the Superior Court of Québec, to regulatory approvals, including that of the Canadian Competition Bureau, the TSX and the New York Stock Exchange approvals for the listing of Sandstorm Shares, as well as other customary closing conditions. The Arrangement Agreement contains customary reciprocal non-solicitation covenants, a right to match in favour of Sandstorm, and $20.6 million or $23.6 million in termination and reverse termination fees payable to Sandstorm or Nomad, respectively, in certain circumstances.

Closing of the Transaction is currently expected to occur in the second half of 2022.

Recommendations of the Board of Directors

The board of directors of Nomad, having received a unanimous recommendation from a special committee comprised solely of independent directors (the “Special Committee”), has unanimously approved the Transaction and determined that the Transaction is in the best interest of Nomad and fair to the shareholders of Nomad. Accordingly, the board of directors of Nomad unanimously recommends the shareholders of Nomad to vote in favour of the Transaction.

Advisors

National Bank Financial acted as financial advisor to the Special Committee and has provided an opinion to the board of directors of Nomad and to the Special Committee. Cormark Securities has provided an independent opinion to the Special Committee. Each opinion to the effect that, subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by the shareholders of Nomad in connection with the Transaction is fair, from a financial point of view, to shareholders of Nomad.

Fasken Martineau DuMoulin acted as legal advisor to Nomad and the Special Committee in connection with the Transaction.

Further Information

Further information regarding the Transaction will be included in a management information circular Nomad will prepare, file and mail to its shareholders in advance of the Nomad Meeting. Copies of the Arrangement Agreement and of the management information circular will be available on Nomad’s corporate profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.

ABOUT NOMAD ROYALTY COMPANY

Nomad Royalty Company Ltd. is a gold & silver royalty company that purchases rights to a percentage of the gold or silver produced from a mine, for the life of the mine. Nomad owns a portfolio of 22 royalty and stream assets, of which 8 are on currently producing mines. Nomad plans to grow and diversify its low-cost production profile through the acquisition of additional producing and near-term producing gold & silver streams and royalties. For more information please visit: www.nomadroyalty.com.

ABOUT SANDSTORM GOLD ROYALTIES

Sandstorm is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. After the Transaction and BaseCore Transaction close, Sandstorm will have acquired a portfolio of 260 royalties, of which 39 of the underlying mines are producing. Sandstorm plans to grow and diversify its low-cost production profile through the acquisition of additional gold royalties. For more information visit: www.sandstormgold.com.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable U.S. safe harbours provisions (collectively, “forward-looking statements”). The forward-looking statements contained in this press release are expressly qualified by this cautionary statement and readers are cautioned not to put undue reliance on them.

Forward-looking statements in this press release may include, without limitation, statements other than statements of historical facts, including regarding: the anticipated benefits of the Transaction to shareholders of Nomad; the structure and estimated value of the Transaction; the anticipated completion and timing of completion of the Transaction; the ability to obtain required court, shareholder and regulatory approvals for the Transaction, the timing of obtaining such approvals; current expectations, estimates and projections of the proforma combined entity; the combined entity’s size and scale; the combined entity’s financial position, including expectations regarding liquidity and cost of capital; the expected pro forma financial outlook of the combined entity; and the outcome or closing of the BaseCore Transaction and the Spin-out Transaction. When used in this press release, words such as “will”, “expect”, “potential”, “objective”, “becoming”, “subject to”, “expected”, “to be”, ”look forward”, “intends”, “plans”, and similar expressions, as well as phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “occur” or “be achieved”, or the negative connotation of such terms, are intended to identify these forward-looking statements.

Forward-looking statements are based on certain key expectations and assumptions made by Nomad’s management. Although Nomad believes that the expectations and assumptions on which such forward-looking statements are based on are reasonable at the time they were made, there can be no assurance that they will prove to be correct. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond Nomad’s control, and which may cause actual results and development to materially differ from those expressed or implied by such forward-looking statements. Such risks and uncertainties and other factors include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the ability to consummate the Transaction; that the Transaction may not be completed on the terms and conditions or the timing currently anticipated or that it may not be completed at all; the ability to obtain court, shareholder and regulatory approvals, the risk that such approvals may not be obtained in a timely manner or at all and the risk that such approvals may be obtained on conditions that are not anticipated; the satisfaction of other conditions precedent to the Transaction; unanticipated difficulties or expenditures relating to the Transaction; material adverse effects on the business, properties and assets of Nomad or Sandstorm; the potential adverse impact of the announcement or consummation of the Transaction on Nomad’s and Sandstorm’s relationships with third parties; the outcome of legal proceedings that may be instituted against Nomad in relation to the Arrangement Agreement; fluctuation in the price of the Sandstorm Shares; fluctuations in gold, silver and iron ore prices; the failure to comply with the Arrangement Agreement resulting in Nomad being required to pay the termination fee and the termination fee having a material adverse effect on Nomad’s financial position; the possibility that the BaseCore Transaction and/or the Spin-out Transaction will not be completed on the terms and conditions or the timing currently contemplated, and that one or both of them may not be completed at all; as well as additional risks and uncertainties inherent to Nomad’s business, not currently known by Nomad, that are out of Nomad’s control or that Nomad currently deems to be immaterial, which could also have a material adverse effect on Nomad or on its ability to consummate the Transaction.

Forward-looking statements contained in this press release are made as of the date of this press release. Nomad disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. If Nomad updates any one or more forward-looking statements, no inference should be drawn that Nomad will make additional updates with respect to those forward-looking statements.