Nova Royalty : Annual Information Form ("AIF")

ANNUAL INFORMATION FORM

FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2021

APRIL 29, 2022

SUITE 501, 543 GRANVILLE STREET

VANCOUVER, B.C. V6C 1X8

NOVA ROYALTY CORP.

ANNUAL INFORMATION FORM

FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2021

TABLE OF CONTENTS

Page

INTRODUCTORY NOTES ................................................................................................................... 1

CORPORATE STRUCTURE ............................................................................................................... 4

GENERAL DEVELOPMENT OF THE BUSINESS ............................................................................... 5

DESCRIPTION OF THE BUSINESS .................................................................................................. 12

RISK FACTORS ................................................................................................................................ 16

MATERIAL ASSETS .......................................................................................................................... 32

DIVIDENDS ....................................................................................................................................... 49

DESCRIPTION OF CAPITAL STRUCTURE ...................................................................................... 49

MARKET FOR SECURITIES ............................................................................................................. 50

ESCROWED SECURITIES ................................................................................................................ 51

DIRECTORS AND OFFICERS ........................................................................................................... 51

LEGAL PROCEEDINGS AND REGULATORY ACTIONS .................................................................. 54

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ............................. 54

TRANSFER AGENT AND REGISTRAR ............................................................................................ 54

MATERIAL CONTRACTS .................................................................................................................. 54

INTERESTS OF EXPERTS ............................................................................................................... 55

AUDIT COMMITTEE .......................................................................................................................... 55

ADDITIONAL INFORMATION ............................................................................................................ 57

SCHEDULE A - AUDIT COMMITTEE CHARTER

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INTRODUCTORY NOTES

Cautionary Note Regarding Forward-Looking Statements

This annual information form ("AIF") contains "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable securities legislation. The forward-looking statements are provided as of the date of this AIF and Nova Royalty Corp. ("Nova" or the "Company") does not intend to and does not assume any obligation to update forward-looking statements, except as required by applicable law. For this reason and the reasons set forth below, investors should not place undue reliance on forward-looking statements.

All statements included herein that address events or developments that we expect to occur in the future are forward-looking statements. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

The forward-looking statements are based on reasonable assumptions that have been made by Nova as at the date hereof and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Nova to be materially different from those expressed or implied by such forward-looking statements, including but not limited to:

•  risks related to epidemics, pandemics or other public health crises, including the novel coronavirus ("COVID-19") global health pandemic, and the spread of other viruses or pathogens, and the potential impact thereof on Nova's business, operations and financial condition;

•  risks related to geopolitical events and other uncertainties, such as the conflict in Ukraine;

•  risks related to commodity price fluctuations;

•  the absence of control over mining operations from which Nova will receive royalty payments pursuant to net smelter returns and other royalty agreements or interests (collectively, "Royalties" and each individually a "Royalty") and risks related to those mining operations, including risks related to international operations, government and environmental regulation, delays in mine construction and operations, actual results of mining and current exploration activities, conclusions of economic evaluations and changes in project parameters as plans are refined;

•  the market price of our "Royalty Commodities", being copper and nickel which are the focus of the Company;

•  the demand for and stable or improving price of Royalty Commodities;

•  the current COVID-19 pandemic will not have a material adverse effect;

•  general business and economic conditions will not change in a material adverse manner;

•  the Company's ability to procure equipment and operating supplies in sufficient quantities and on a timely basis;

•  the geology and economic potential of the Material Properties as described in the technical reports in respect of such properties;

•  future fluctuations in currency exchange rates and interest rates;

•  that payment in respect of Royalties may be delayed or may never be made;

•  that some Royalties may be subject to confidentiality arrangements that limit or prohibit disclosure regarding those Royalties;

•  operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner;

•  the Company's ability to attract and retain skilled personnel and directors;

•  political and regulatory stability;

•  the receipt of governmental, regulatory and third party approvals, licenses and permits on favourable terms;

•  obtaining required renewals for existing approvals, licenses and permits on favourable terms;

•  requirements under applicable laws;

•  sustained labour stability; stability in financial and capital goods markets; and availability of equipment;

•  risks related to Nova's reliance on public disclosure and other information regarding the mines or projects underlying its Royalty Commodities;

•  business opportunities that become available to, or are pursued by Nova;

•  that Nova's cash flow is dependent on the activities of others;

•  that Nova has had negative cash flow from operating activities;

•  that some Royalties are subject to rights of other interest-holders;

•  risks related to global financial conditions;

•  that Nova is dependent on its key personnel;

•  risks related to Nova's financial controls;

•  dividend policy and future payment of dividends;

•  competition;

•  risks related to conflicts of interest of Nova's directors and officers;

•  that Nova may not be able to obtain adequate financing in the future;

•  litigation;

•  risks related to Nova's current credit facility and financing agreements;

•  title, permit, or license disputes related to interests on any of the properties in which Nova holds, or may acquire a Royalty or other interest;

•  interpretation by government entities of tax laws or the implementation of new tax laws;

•  credit and liquidity risk;

•  risks related to Nova's information systems and cyber security;

•  risks posed by activist shareholders;

•  that Nova may suffer reputational damage in the ordinary course of business;

•  risks related to acquiring, investing in or developing resource projects;

•  risks applicable to owners and operators of properties in which Nova holds an interest;

•  exploration, development and operating risks;

•  risks related to climate change;

•  environmental risks;

•  risks related to the operators of the properties in which Nova holds, or may acquire, a Royalty or other interest, including changes in the ownership and control of such operators;

•  that Nova's Royalties may have unknown defects;

•  that Nova's Royalties may be unenforceable;

•  that exploration and development activities related to mine operations are subject to extensive laws and regulations;

•  that the operation of a mine or project is subject to the receipt and maintenance of permits from governmental authorities;

•  risks associated with the acquisition and maintenance of mining infrastructure;

•  that Nova's success is dependent on the efforts of operators' employees;

•  risks related to mineral resource ("mineral resource" or "Mineral Resource") and mineral reserve ("mineral reserve" or "Mineral Reserve") estimates;

•  that mining depletion may not be replaced by the discovery of new mineral reserves;

•  that operators' mining operations are subject to risks that may not be able to be insured against;

•  risks related to land title;

•  risks related to international operations;

•  risks related to operating in countries with developing economies;

•  risks associated with the construction, development and expansion of mines and mining projects;

•  risks associated with operating in areas that are presently, or were formerly, inhabited or used by indigenous peoples;

•  that Nova is required, in certain jurisdiction, to allow individuals from that jurisdiction to hold nominal interests in Nova's subsidiaries in that jurisdiction;

•  the volatility of the stock market;

•  that existing securityholders may be diluted;

•  risks related to Nova's public disclosure obligations;

•  risks associated with future sales or issuances of debt or equity securities;

•  that there can be no assurance that an active trading market for Nova's securities will be sustained;

•  risks related to the enforcement of civil judgments against Nova; and

•  the potential changes in the mining laws in Chile;

as well as those factors discussed under the heading "Risk Factors" in this AIF.

Forward-looking statements included in this AIF include statements regarding:

•  the completion of future transactions;

•  our plans and objectives;

•  our future financial and operational performance;

•  the Company's future business plans;

•  the Company's negative cash flows;

•  the market price of Royalty Commodities;

•  royalty payments to be paid to Nova by property owners or operators of mining projects pursuant to each Royalty;

•  other potential developments relating to, or achievements by, the counterparties for our Royalty agreements, and with respect to the mines and other properties in which we have, or may acquire a Royalty interest;

•  expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations;

•  the ability to retain and/or maintain any required permits, licenses or other necessary approvals for the exploration or development of its Material Properties (as defined below) and other mineral properties;

•  the completion of the drilling program at the Vizcachitas Project (as defined below);

•  the Company's compensation policy and practices;

•  the Company's expected reliance on key management personnel, advisors and consultants;

•  estimates of future production, costs and other financial or economic measures;

•  prospective transactions, growth and achievements;

•  financing and adequacy of capital;

•  future payment of dividends; and

•  future sales of Offered Shares (as defined below) under the ATM Program (as defined below).

Estimates of mineral resources and mineral reserves are also forward-looking statements because they involve estimates of mineralisation that will be encountered in the future, and projections regarding other matters that are uncertain, such as future costs and commodity prices.

Forward-looking statements are based on a number of material assumptions, which management of Nova believes to be reasonable, including, but not limited to, that owners and operators of properties in which Nova holds, or may acquire, an interest who have had their operations affected by COVID-19 will restart their operations on the timetables currently proposed by such persons, the continuation of mining operations from which Nova will purchase Royalty Commodities or in respect of which Nova will receive royalty payments, that commodity prices will not experience a material decline, mining operations that underlie Nova's royalty interest will operate in accordance with disclosed parameters and achieve their stated production outcomes and such other assumptions as may be set out herein.

Although Nova has attempted to identify important factors that could cause actual actions, events or results to differ materially from those contained in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward looking statements. Investors and readers of this AIF should also carefully review the risk factors set out in this AIF under the heading "Risk Factors".