Nova acquires royalty on Hudbay’s copper projects in Arizona

Nova Royalty (TSXV: NOVR; US-OTC: NOVRF) has acquired a 0.135% net smelter return (NSR) royalty on Hudbay Minerals’ (TSX: HBM; NYSE:HBM) Copper World and Rosemont copper projects in a cash and share deal worth about US$5.5 million.  

The royalty will cover all metals including, copper, silver, gold and molybdenum extracted from the mining claims covering the Copper World and Rosemont projects, which are located adjacent to each other in Arizona’s Pima County in the United States.  

“We are excited to be adding another high-quality, long-life royalty to Nova’s portfolio of generational assets. Copper World and Rosemont represent one of the largest and most strategic copper districts in the United States,” Nova’s CEO Alex Tsukernik said in a press release.  

“Owning royalties on generational assets … have the potential to provide our investors with decades-long cash flow streams.”  

Comprised of seven deposits, Copper World’s initial mineral resources were reported in December last year.  Hudbay increased its 2021 drill program budget in the region from $10 million to $34 million.  

Copper World has indicated resources of 272 million tonnes grading 0.36% copper, 115 grams molybdenum per tonne and 2.9 grams silver per tonne and inferred resources of 142 million tonnes grading 0.36% copper, 105 grams molybdenum per tonne and 3.3 grams silver per tonne.  

There are more than 20 small historic mines on the Copper World project site, which produced nearly 440,000 tonnes of copper at an average grade of 4.42% between 1874 and 1969. 

Hudbay’s Rosemont copper project has proven and probable reserves of 537 million tonnes grading 0.45% copper, 120 grams molybdenum per tonne and 4.58 grams silver per tonne.  

A feasibility study for Rosemont, published in March 2017, contemplated an initial 19-year mine life with average annual copper production of 127,000 tonnes at a cash cost of US$1.14 per lb. copper  in  the first 10 years. 

In July 2019, a U.S. district court faulted the U.S. Forest Service for not being able to show that the company had mining claims or deposits on the nearly 1011.7 hectares of land that it planned to use for waste disposal in the Coronado National Forest, thus vacating the Final Record of Decision. Hudbay has appealed the ruling.   

At presstime, Nova was trading at $3.10 per share within a 52-week trading range of $2.55 and $6.25.  The company has 83.7 million common shares outstanding for a market cap of $277 million.