Nova Royalty to increase NSR on First Quantum's Argentine project

Nova Royalty Corp. agreed to acquire a further 0.18% net smelter royalty on First Quantum Minerals Ltd.'s Taca Taca copper-gold-molybdenum project in Argentina for $13 million in common shares and $7 million in cash.

This will increase Nova Royalty's interest in the project to an aggregate 0.42% royalty, according to a Jan. 11 news release.

The transaction is expected to close by February, subject to the consent of First Quantum and acceptance by the TSX Venture Exchange.

Consideration includes 4,545,454 Nova Royalty shares worth $13 million and $3 million in cash payable on closing of the transaction. Nova Royalty will pay an additional $4 million once commercial production begins at Taca Taca.

The NSR is subject to a buyback right based on proven reserves at Taca Taca as estimated in a feasibility study. The buyback amount will be equivalent to the amount of the proven reserves multiplied by the prevailing market prices of all applicable commodities.

In November 2020, First Quantum announced a maiden reserve of 7.7 million tonnes of copper, an updated measured and indicated resource of 9.5 Mt, an initial mine life of 32 years, and a timetable to consider a production decision for Taca Taca from 2023 to 2024.