Nova Royalty to Increase Taca Taca Copper-Gold-Molybdenum Project Interest

Nova Royalty Corp. to increase the royalty interest of the Taca Taca copper-gold-molybdenum project. According to the report, Nova Royalty is pleased to announce that it has entered into royalty purchase agreements with existing shareholders of the Company under which Nova will acquire a combined, existing 0.18% net smelter return royalty on the Taca Taca copper-gold-molybdenum project in Salta Province of Argentina.

The project is 100% owned by First Quantum Minerals Ltd, with US$13 million in Nova common stock and US$3 million in cash to be paid upon completion, and another US$4 million in cash for the commercial production. Together with the 0.24% royalties previously obtained by Nova, this transaction will increase Nova Royalty's equity to 0.42% of the total Royalty of the world-class Taca Taca development project.

Alex Tsukernik, Nova's President and CEO, commented, "‎This transaction is a great vote of confidence in Nova's strategy from existing shareholders who are now significantly increasing their ownership in the Company”.

Since Nova initially received royalties, First Quantum has outlined the project development path, which will make Taca Taca one of the few copper development projects undertaken by a large mining company. We are excited to increase our ownership in this outstanding project and look forward to continuing to grow Nova into a premier copper-nickel royalty company.

The transaction requires the consent of First Quantum (no unreasonable rejection) and acceptance of TSX Venture Exchange's consent. The transaction is expected to be completed in February 2021. The aggregate purchase price for the Transaction includes upfront consideration of US$3 million in cash and 4,545,454 Nova Shares with an aggregate value of US$13 million.

After Taca Taca is put into commercial production, Nova will pay an additional total of 4 million US dollars in cash. The Company intends to file a prospectus supplement to its base shelf prospectus dated October 30, 2020 to qualify the distribution of the Nova Shares to the Sellers.

The concession rights are based on the repurchase rights of Taca Taca's proven reserves. The feasibility study was completed by a recognized international consulting company. The company is contracted by mutual consent of all parties, including royalty holders. The buyback amount will be equivalent to the amount of the Proven Reserves multiplied by the prevailing market prices of all applicable commodities within the Taca Taca copper-gold-molybdenum project.

Nova Royalty has agreed to pay a finder's fee to an arm's length person totaling two percent of the Transaction value to be paid at Closing based on a volume-weighted average trading price of the common shares of the Company before the date of Closing.

Taca Taca is a porphyry copper-gold-molybdenum project located in the Puna (Altiplano) region of Salta Province, northwestern Argentina, approximately 55 kilometers east of the Chilean border and 90 kilometers east of Escondida, the world’s largest copper mine.

On November 30, 2020, First Quantum announced an initial copper reserve of 7.7 million tons, an updated measured and labeled resource of 9.45 mm tons, an initial mine life of 32 years, and a timetable for the decision to make Taca Taca copper-gold-molybdenum project production in 2023-2024.

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