- Streams and royalties can be acquired outright from either a resource company or a private party. Precious metal streams are obtained by providing financing to operators, allowing them to monetize a portion or all their precious metal production.
- New royalties are created by providing capital to an operator or explorer in exchange for a royalty. In either case, the capital provided by Nevada Canyon is typically used for the development and construction of a mine, mine expansion, or funding exploration work.
- The Exploration Project accelerator component finds under valued or distressed assets, providing initial investment capital for geological and engineering work, then selling the assets to other mining companies for premium returns without large capital expenditures (Cap-Ex).
Nevada Canyon’s
Unique Three-Fold
Business Model
3
Overview
Nevada Canyon Gold Corp is a newly structured emerging natural resource company with a unique three-fold business model. The Company’s principal activities are primarily focused within the state of Nevada, rated as one of the best places to explore and mine in the world.
The world’s demand for gold is insatiable. It creates constant pressure for new discoveries and the production of gold. The world’s biggest gold mining companies are spending $100s of millions to explore and acquire additional prospects here in the heart of America’s gold production capital. Nevada Canyon intends to be at the forefront of providing these realistic prospects, royalties and streaming assets we currently are aggregating.
Our management team has over 30 years of experience operating in Nevada with extensive contacts and knowledge within the mining industry and expertise in mineral property acquisitions and divestitures. The current mineral royalty marketplace is highly active and competitive, with several “well-financed” small to upper-tier royalty and streaming companies trying to gain market share within the sector.
Nevada Canyon’s does not intend to compete with these successful, well-financed royalty companies but instead will focus on becoming a source of royalty deals for them. By partnering with capable operators and people, we focus on building and managing a diversified high profit margin, leveraged cash-flowing portfolio of precious metal assets and properties.
Business Model
Our principal activities are the acquisition and divestitures of royalty interests, the management of precious metal streams, with an exploration project accelerator component. Nevada Canyon is focused on acquiring royalties and streams on smaller producing, pre-production or pre-resource properties, creating a royalty package by aggregating them under one roof, then selling the packages. This creates a much higher valuation as a package rather than individual smaller royalties, creating a much higher potential profit margin in the process.
The potential upside profit margins are much higher in pre-production royalties and streams than that of the producing ones. Nevada Canyon avoids the high cost of putting mines into production, while letting someone else do the heavy lifting and expenditures. This creates short term upside value in these assets while retaining a long-term royalty at a very low-cost basis. Nevada Canyon believes it can create substantial upside value to its capital investments, with this low overhead approach and unique business model.
| Enterprise Value1 / Employee2 US$ 000s as of Apr. 30, 2020 | Total Revenue / Employee2 US$ 000s 1-Year Ending Dec. 31, 2019 | |
|---|---|---|
| $515 | Anglo American | $474 |
| $1877 | RioTinto | $938 |
| $637 | Glencore | $2,414 |
| $3,029 | Barrick | $527 |
| $3,227 | Newmont | $587 |
| $300,800 | Royal Gold Inc. | $17,181 |
| $22,763 | Netflix | $2,344 |
| $6,893 | Alphabet | $1,361 |
| $9,386 | Apple | $1,954 |
| $1,564 | Amazon | $352 |
| $11,884 | $1,573 |
1. Enterprise value = market cap. + debt + preferred equity + minority interest - cash & ST investments.
2. Employee count for FY 2019, except Royal Gold as of June 2, 2020 and Barrick as reported by Forbes May 12, 2020.
Source: CapitallQ as noted.
A Highly Efficient
Business Model
The efficiency of a peer’s sample business model exceeds that of the largest mining and technology companies.
Benefits To Investors
We have designed Nevada Canyon to be a unique and lower risk investment opportunity while retaining upside value. Five key advantages to our business model include: portfolio diversification, no-cost exploration upside, geopolitical stability, fixed-cost investments, and upside growth.
1 Portfolio
Diversification
Nevada Canyon will own a large portfolio of interests in high-quality, long-life mines, development projects, and evaluation and exploration properties. Our portfolio of revenue generating assets will consist of several producing properties, with the revenue generated from mines owned by small, mid tier to some of the largest mining companies in the world. Nevada Canyon’s portfolio provides a level of financial and production stability.
2 No-Cost
Exploration Upside
We enjoy the benefit of reserve growth, as operators seek to extend mine lives by exploring for additional reserves at their existing mine sites. Except for our exploration project accelerator, Nevada Canyon is not required to participate in the exploration expense or pay any additional compensation when operators discover or add additional reserves at existing mines.
3 Geopolitical
Stability
Many mining companies have assumed increased political risk as they turn to less stable countries in their quest to replace depleted reserves. Nevada Canyon is primarily focused within the state of Nevada, rated as one of the best places to explore and mine in the world.
4 Fixed-Cost
Investments
We do not have to contribute to capital or operating costs on exploration or at the mining operations in which we have an interest. Therefore, Nevada Canyon is not exposed to inflationary pressures that can erode the rate of return expectations and profit margins of operating mining companies.
5 Upside
Growth
We do not intend to compete with successful and larger royalty companies but become a source of royalty deals for them. Nevada Canyon will focus on acquiring royalties on smaller producing properties, pre-production or pre-resource properties, creating a royalty package by aggregating them under one roof and selling the packages. This creates a much higher valuation as a package rather than individual small royalty and higher potential profit margin in the process.
3-Fold Business Model
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