Investor Alert

Nov. 14, 2019, 8:32 a.m. EST

EMX Royalty Announces Third Quarter 2019 Results & Provides Update

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Vancouver, British Columbia, Nov 14, 2019 (Newsfile Corp via COMTEX) -- Vancouver, British Columbia--(Newsfile Corp. - November 14, 2019) - EMX Royalty Corporation /zigman2/quotes/203389934/composite EMX 0.00% (the "Company" or "EMX") is pleased to report results for the quarter ended September 30, 2019. The Company's filings for the quarter are available on SEDAR at www.sedar.com , on the U.S. Securities and Exchange Commission's website at www.sec.gov and on EMX's website at www.EMXroyalty.com . Financial results were prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and are expressed in Canadian dollars unless otherwise stated.


Financial Update

  • Working capital at September 30, 2019 was $81.3 million, with cash comprising $74.1 million.

  • EMX had revenue of $1.2 million, loss from operations of $2.3 million, and after-tax loss of $2.4 million. Revenue includes royalty income, optioned property and other property income, interest, and gains on sales of properties and marketable securities. Other items affecting financial results in Q3 include $0.2 million in depletion costs, and a foreign exchange gain of $0.8 million.

  • Royalty generation costs totaled $3.6 million not including share-based payments of $1.2 million or recoveries from partners totaling $1.7 million.

  • General and administrative expenses totaled $1.2 million, which includes $0.5 million in salaries and consultants, $0.2 million in administrative costs, $0.3 million in professional fees and $0.2 million in investor relations costs.

  • Total cash used in operations excluding changes in non-cash working capital items was $2.6 million. [[8]]

  • Subsequent to September 30, 2019, the Company received $900 thousand (US$600 thousand) as a partial distribution of the amount owing from IG Copper LLC ("IGC") related to the sale of Malmyzh. Currently IGC is disputing a warranty claim by the buyer of Malmyzh. Further distributions to EMX, if any will be based upon the resolution of the warranty claim.

Operational Update

  • In North America, EMX received approximately $247 thousand (US$186 thousand) in revenue from the sale of 128 gold ounces from the Leeville royalty in Nevada. The Leeville royalty property is included in the Nevada Gold Mines LLC (NGM) Barrick-Newmont Nevada joint venture. NGM has recently emphasized the "significant growth potential" of the Leeville Complex, which is partially covered by EMX's Leeville royalty. [[1]] In particular, the positive potential noted by NGM includes portions of the Four Corners, Rita K, and Full House deposits that are partially covered by EMX's royalty, and have been the subject of drill delineation and underground development. Although the Leeville royalty has under-performed in 2019 relative to expectations, NGM's revitalized focus on advancing the Leeville Complex highlights the upside optionality of EMX's Leeville royalty property.

    Partner funded copper exploration programs continued in the southwestern U.S., incurring approximately $1 million in exploration expenditures. Much of this work was conducted under the RSA Agreement with South32 USA Exploration Inc. on five copper porphyry Alliance Exploration Projects ("AEP") in Arizona. EMX also completed logistical preparations for a drill program scheduled to commence in early Q4 at the Copper Basin Designated Project. In addition to the AEP and Copper Basin efforts, generative work was conducted to identify new copper targets for acquisition within the framework of the RSA Agreement.

    Generative field work led to EMX adding three royalty generation gold projects to the portfolio in Idaho through staking during Q3. These projects are district-scale land positions and are available for partnership.

    EMX's royalty portfolio in Alaska's Goodpaster Mining district, which hosts the Pogo high-grade gold mine, consists of NSR interests ranging from 1%-3% that cover claim blocks aggregated as West Pogo, East Pogo, North Pogo, Divide, the Shaw-Eagle-LMS trend, and the LMS project. This royalty package was acquired from Millrock Resources Inc. and Corvus Gold Inc. [[2]] Millrock worked on completing preparations that will position it to conduct a drill program at the highly prospective West Pogo project in 2020. [[3]]

  • In Scandinavia, partner companies continued to advance multiple EMX royalty properties, and EMX received reimbursements of approximately US$340 thousand for expenditures on partner projects. EMX also continued to identify and acquire new project opportunities, adding multiple new gold and nickel-copper sulfide projects to the portfolio.

    Summer field programs concluded across Scandinavia with the completion of a variety of sampling, mapping and reconnaissance campaigns. These programs advanced existing royalty projects, including the Gold Line royalty properties [[4]] and Playfair Mining Ltd's RKV project in Norway [[5]] , and also led to the identification of new royalty generation projects for acquisition.

    Boreal Metals Corp. continued to produce encouraging drill results from EMX's Gumsberg zinc-lead-silver royalty property in Sweden's Bergslagen mining district (see Boreal News Release dated July 9, 2019).

    EMX is a leading explorer and holder of mineral rights in Scandinavia.

  • In Serbia, the Company has three royalty properties, including the Brestovac 0.5% NSR royalty covering the Timok Project's Cukaru Peki high grade copper-gold Upper Zone and porphyry copper-gold Lower Zone (note:the royalty percentage is subject to reduction only as provided in the royalty agreement). Zijin Mining Group Co. Ltd. controls 100% of the Upper Zone, and has been in a joint venture with Freeport on the Lower Zone. In Q3 it was disclosed that Zijin had executed contracts for development of the Upper Zone, and expects initial production in 2021. [[6]] Further, it was announced that a Memorandum of Understanding ("MOU") was signed between the Government of the Republic of Serbia and Zijin, providing a framework for the development of the Cukaru Peki Upper Zone high grade copper-gold project. [[7]]

  • In Turkey, the Company received $776 thousand (US$584 thousand) as pre-production payments from the Akarca and Sisorta royalty properties. As well, EMX executed agreements for the sale of EMX's Alanköy and Trab-23 projects to Kar Mineral Madencilik İnşaat Turizm Sanayi ve Ticaret A.Ş., a privately owned Turkish Company, for gold bullion payments, work commitments, and 2.5% NSR royalty interests.

  • In Australia, EMX advanced the Queensland Gold project while undertaking discussions with potential partners. The Company's work has highlighted multiple zones of gold mineralization associated with suites of Permian-Triassic aged volcanic and intrusive rocks, as well as skarn and replacement styles of mineralization.

Corporate Update

  • Jan Steiert, the Company's Chief Legal Officer since 2012, retired at the end of September. Her exceptional contributions over the past seven years have been key to the success of EMX.

  • Malik Duncan joined the Company as General Counsel at the end of September. Mr. Duncan has over 19 years of legal experience, having worked at several multinational corporations, and joins EMX from Newmont Goldcorp Corporation. While at Newmont, he held various positions within the Office of the General Counsel and on the executive team of multiple business departments. Mr. Duncan has extensive experience in domestic and international transactions spanning North America, South America, Africa, Asia, and Australia. Prior to joining Newmont, he worked for Lockheed Martin Space and First Data Corporation. Mr. Duncan completed his JD/MBA at the University of Colorado at Boulder.

  • Rocio Echegaray will join EMX on November 18th as Corporate Secretary. Ms. Echegaray replaces Ms. Lori Pavle who held the position previously. Ms. Echegaray holds a law degree from Federico Villarreal National University in Lima, Peru. She has worked in the mining industry with publicly listed companies providing corporate secretarial services since 1998.

  • Subsequent to Q3, the Company entered into a Term Sheet and Loan Agreement with Boreal Metals Corp. ("BMC") dated October 22, 2019 whereby the Company will loan $800,000 (the "Loan Amount") to BMC for one year, subject to TSX-V approval. The Company has current ownership or control of 12.53% of BMC as reported by EMX in its press release dated October 31, 2019. BMC will pay an effective annual interest rate on the Loan Amount of 8.08% per annum along with a Loan Facility Bonus equal to 5% of the Loan Amount in cash at closing. BMC has the option to postpone the Loan Facility Bonus subject to the same effective annual interest rate as the Loan Amount of 8.08% per annum. The Company has the option to receive the Bonus Fee in shares of BMC at not less than the market price of BMC common shares in accordance with TSX-V Policy. BMC is granting security to the Company in connection with the Loan consisting of: i) a pledge of the issued and outstanding shares of Iekelvare Minerals AB () Iekelvare "), a wholly-owned subsidiary of BMC; ii) a guarantee of the Loan by Iekelvare; and iii) the obligation to transfer the Gumsberg License (or the issued and outstanding shares of Iekelvare) to the Company if the Loan is in default.

US : U.S.: NYSE American
$ 1.97
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Volume: 345,843
Feb. 19, 2020 4:10p
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