TPREMIER ROYALTY INC. (TSX:NSR)(TSX:NSR.WT)(TSX:NSR.WT.A) is pleased to announce that at the opening of trading today, its common shares and listed warrants will begin trading on a one-for-four consolidation basis on the Toronto Stock Exchange under the symbols “NSR”, “NSR.WT” and “NSR.WT.A”, respectively. Fractional common shares and warrants resulting from the consolidation will be rounded down to the nearest whole share or warrant, as applicable.
Abraham Drost, President & CEO of Premier Royalty Inc., stated: “This event has been about a year in the making as a result of the original vision and commitment of our Chairman Ewan Downie. The Company has acquired a number of cash flowing royalties and true to the original vision, is off to a great start. We look forward to capitalizing on new opportunities for growth as we seek to maximize shareholder value.”
About Premier Royalty Inc.
Premier Royalty Inc. features a high quality cash-flowing royalty portfolio on several remarkable gold mines including:
• 1.5% NSR on the new (Q4/2012) Emigrant Springs Mine operated by Newmont on the Carlin Trend in Nevada, USA
• 1% NSR on the new (Q1/2012) Thunder Creek Deposit of the Timmins West Mine operated by Lake Shore Gold Mines in Timmins, Canada
• 1% NSR on the venerable Buffelsfontein Mine operated by Village Main Reef in South Africa
• 1% NSR on the Mine Waste Solutions (MWS) tailings processing facility operated by AngloGold Ashanti in South Africa
• 1% NSR on the new (2010) Gualcamayo Mine operated by Yamana Gold in San Juan Province, Argentina
Premier Royalty Inc. also has a number of promising earlier stage exploration and development royalties in its growth pipeline and is actively assessing other potential royalty acquisitions and corporate development opportunities in stable jurisdictions.
For the curious among you who might also be a bit confused about capital structure and warrant details, here’s a first go at it:
62.9 million shares outstanding
89 million fully diluted
The NSR.WT.A warrants expire December 20, 2012 and are completely worthless with exercise price above $5
However, the NSR.WT warrants could be of interest and perhaps worthy of stink bids below $1. They have a $2 exercise price expiring October 7, 2014 … plus when you exercise the warrant you get a fraction (~0.4) of a new warrant also w/$2 exercise price but not expiring until December 2016. These would give plenty of time for Premier to grow into its current valuation and beyond.
Zurbo: you wrote “Out of the gate Premier Royalty (“NSR”) is being valued at about $150 million for its 5 producing net smelter return (NSR) royalties”
I see the market cap of the company as being $30M. I’m clearly missing something. Are you saying the NPV of the 5 royalties is $150M? Could the market cap be just 1/5 of this?
@JockUlar
Please refer to the above comment. It’s a newly structured company so Google, Yahoo, etc. all have their data wrong at this point on share structure. It has over 60M shares outstanding and nearly 90M fully diluted.
Hello Zurbo,
i’ve started to pick up a position in PG at $4, which owns 40% of NSR. Based on this presentation NSR will be able to produce $80m “right out of the gate”. That seems very optimistic, but for arithmetic’s sake that is around $30m a year before taxes to PG. This seems a heck of a way to fund PG’s exploration plays that, if we ever get a good equity market could generate some exciting news in the coming few years.
The $4 is a 33% discount from the $6 shares (and higher priced flow throughs) issued in October. Smart management to raise when the going was good, in hindsight. My thanks to GT for the heads up.
31Floors
Zurbo, have you followed the transaction with Bridgeport Ventures preceding the listing of NSR stock? Were these changes good for public shareholders? The complicated-er situations get, the more I wonder whether insiders are somehow dealing advantages to themselves vis-a-vis public shareholders.
As there are few royalty/streaming companies, and as they are the ONLY gold stocks which have performed well, I’d love to hear your views on this one, more information on Golden Predator’s royalties, and an update on your survey of royalty/streaming companies.
thnx for whatever light you can shed.
@Jockular
Good for shareholders? Yes since the precious metal royalty companies (at least those producing) are trading at very nice cash flow multiples. Agreed that the share/deal structure of Premier Royalty a bit complex but the royalty portfolio is actually very straightforward and the company does an excellent job in its corporate presentation. Is it cheap? No, but I supposed I’d be more inclined to own this one than a Royal Gold, Franco, or Sandstorm. Maybe they do a deal with Golden Predator at some point to double or triple their cash flow in a few years time?
Where can I even find price for NSR.wt? I looked in a few places and no answer… thanx in advance.
@JockUlar
http://www.tmx.com/
http://tmx.quotemedia.com/pricehistory.php?qm_symbol=NSR.WT
“This seems a heck of a way to fund PG’s exploration plays that, if we ever get a good equity market could generate some exciting news in the coming few years.”
I said that but it doesn’t make sense. PG may own 40% of NSR for now, but the NSR revenues stay with NSR!
Thanx, Joey.
I think of Premier Gold’s royalty holdings as an additional way to build value, since royalties have lesser risks than either exploration or near-production, and since (producing) royalties have their estimable stream of cash as a more solid floor for valuation than either exploration or near-production.
I got out of PG several weeks ago in the low $4s. NSR doesn’t do anything for me at all.
@31Floors
So how do you feel about PG now that they don’t have any NSR. 31F?
Looks like Sandstorm wants to eat any potential emerging competitor for their niche of the streaming/royalty market. Does it still make sense to buy the warrants? Or will NSR soon simply be gone?
Today, Sandstorm announced they have doubled their January credit line from $50M to $100M. And Golden Predator is featuring their royalty assets. I’d greatly appreciate some commentary from Silverax and Zurbo on the royalty/streaming space. Is GPD still your favored company?
I know U2 don’t seem to have the highest opinion of Sandstorm, but don’t know just why. Is this due to the terms of their streaming deals? Have you done any valuation of them?
SAND have moved SO aggressively to defend their niche. With acquisition of control of NSR, their deal count rises from 10 to 15! What price did they pay? Were NSR’s royalties acquired at a good price? If NSR’s cap is still anywhere near $180M, if Sandstorm buys up to 100%, they’ll have increased their number of deals by 50% for just 18% of their market cap. (crude statement, of course, without judging the deals).
Does the NSR warrant you mentioned some time ago still make sense ?
I’d really find such information useful, as the streaming/royalty space now seems more animated than any other part of the gold markets.
@Jockular
We don’t dislike NSR, we just believe it is getting a strong valuation in this market (along with SAND) and therefore we don’t see the type of investment case we like to take advantage of at the present time considering the current market conditions. It is generally not a good idea to be a market follower either, by which I mean to jump into whatever seems popular at the moment. The time to get on board is BEFORE something becomes popular, or after the dust has settled and there is a good opportunity to evaluate the space separating out the potential winners and losers. SAND obviously had great timing as it was probably the most active company in the royalty space when royalties became hot … but nobody knows how long they will remain hot. After things cool down it will no longer be strategy (streaming vs. net smelter royalty, etc.) but rather the royalty assets themselves that determine the valuation of these companies — so that’s where I’d start looking now. It’s beyond the scope of this comments section to go over the various assets of the royalty companies but suffice it to say that based on the analysis we have done we view Golden Predator’s to be a superior portfolio at this time. This could change and of course we are always open to reconsideration.
Here’s an example in the private equity space provided by Sober Look:
http://soberlook.com/2013/03/chasing-next-hot-market.html
@Zurbo
Damn, why didn’t I think of that, of getting on board before something gets popular? LOL. Once a thing STARTS to get popular, “the trend is your friend, …until it ends ….” Hopping on QCOM in end 98, you’d have had a 26X return before tech peaked and crashed.
My gut says that smaller royalty cos. may have yet a long while as the only sub-sector of juniors to run.
Thanks, BTW, for your confirmation that AMB still seems the best value.