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Maverix Announces First Quarter 2021 Results and Increases Dividend by 25%

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Maverix Announces First Quarter 2021 Results and Increases Dividend by 25%

 

 

 

 

 

Maverix Metals Inc. (NYSE American: MMX) (TSX: MMX) is pleased to announce operating and financial results for the first quarter ended March 31, 2021.

 

First Quarter 2021 Highlights

  • Revenue of $13.1 million;
  • Cash flow from operating activities, excluding changes in non-cash working capital, of $9.0 million1;
  • Gold equivalent ounces sold of 7,3021;
  • Average cash cost per GEO of $223, resulting in a cash operating margin of 88% or $1,568 per ounce1;
  • Net income of $14.8 million, including one-time gains on a partial buy back of the Hope Bay royalty interest and conversion of a debenture;
  • Adjusted net income of 5.0 million1;
  • Received a cash payment of $50 million from Agnico Eagle Mines Limited (“Agnico”) for the partial buy back of 1.5% of Maverix’s royalty on the Hope Bay mine;
  • Fully repaid the outstanding amount on Maverix’s revolving credit facility, leaving the Company debt free;
  • Increased the silver stream on the El Mochito mine from 22.5% to 27.5%; and
  • Added to the VanEck Vectors Junior Gold Miners ETF in March 2021.

 

Dan O’Flaherty, CEO of Maverix, commented, “The first quarter of 2021 marked another milestone as Maverix was included in the GDXJ and increased revenue significantly by 41% compared to the first quarter of 2020. We are well on track to achieve our previously announced guidance of 27,000 to 30,0001 GEOs for 2021 at approximately a 90% cash margin1, with approximately 99% of expected revenue derived from gold and silver. Maverix is also pleased to have Agnico as an operating partner, as it completed the acquisition of the Hope Bay mine, in Nunavut. We look forward to Agnico applying its operating expertise to maximize the long-term value of the mine and the highly prospective surrounding land package.”

 

Summary of Quarterly Results

 

Quarter Ended

(in thousands of USD, except for GEOs and per share amounts)

March 31, 2021 March 31, 2020
Statement of Income and Comprehensive Income
Royalty revenue $ 6,883 $ 6,076
Sales $ 6,197 $ 3,214
Total revenue $ 13,080 $ 9,290
Cash flow from operating activities $ 13,479 $ 4,846
Net income $ 14,769 $ 860
Basic earnings per share $ 0.10 $ 0.01
Diluted earnings per share $ 0.10 $ 0.01
Dividends declared per share $ 0.01 $ 0.01
Non-IFRS and Other Measures1
Adjusted net income $ 4,959 $ 996
Adjusted basic earnings per share $ 0.04 $ 0.01
GEOs sold 7,302 5,871
Average realized gold price per GEO $ 1,791 $ 1,582
Average cash cost per GEO $ 223 $ 167
Cash flow from operating activities, excluding changes in non-cash working capital $ 8,998 $ 5,733

 

For complete details please refer to the Condensed Consolidated Interim Financial Statements and associated Management Discussion and Analysis for the quarter ended March 31, 2021, available on SEDAR (www.sedar.com), EDGAR (www.sec.gov) or on Maverix’s website (www.maverixmetals.com).

 

To listen to Maverix’s President, Ryan McIntyre, discuss the Q1 results please use this link: MMX Q1 2021 Results

 

Dividend Increase

 

Maverix is pleased to announce that its Board of Directors has approved a quarterly dividend of $0.0125 per share to be paid on June 15, 2021, to shareholders of record as of the close of business on May 31, 2021.  The amount of the dividend is a 25% increase from the previous dividend of $0.01 per share. Capital allocation is a critical component of being a good steward of investors’ capital and while our focus continues to be on acquiring precious metals royalties and streams we also believe it is important to have a sustainable dividend that grows with the business.

 

This dividend is designated as an “eligible dividend” for the purposes of the Income Tax Act (Canada). Dividends paid by Maverix to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes. The declaration, timing, amount and payment of future dividends remains at the discretion of Maverix’s Board of Directors.

 

Asset Portfolio Updates

 

El Mochito

 

During the quarter, the Company increased its silver stream on the El Mochito mine from 22.5% to 27.5%. The Company acquired the increased silver stream as a result of the conversion of a convertible debenture that was issued to Maverix last year for consenting to the acquisition of the El Mochito mine by Kirungu Corporation and a $1.0 million investment.

 

Hope Bay

 

Since acquiring the Hope Bay mine in February 2021, Agnico has been focused on optimizing the underground mine and mill operations, with a longer-term view to developing a larger scale production centre. To that end, Agnico has launched a major delineation, conversion and exploration drilling program at the Hope Bay property, using three underground rigs and three surface rigs. Agnico expects to spend $16.2 million for 69,600 metres of diamond drilling at the Hope Bay property in 2021, including $5.5 million for 29,800 metres of delineation drilling to support production at the Doris mine and $10.7 million for 39,800 metres of drilling on exploration targets around the Doris, Madrid and Boston deposits and other regional targets along the 80-kilometre-long Hope Bay greenstone belt.

 

Maverix owns a 1% NSR royalty on the Hope Bay property. For more information, please refer to www.agnicoeagle.com and see the news release dated April 29, 2021.

 

1 Maverix has included certain performance measures in this news release that do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) including adjusted net income, total GEOs sold, average realized gold price per GEO, average cash cost per GEO, cash operating margin and cash flow from operating activities, excluding changes in non-cash working capital. Adjusted net income is calculated by excluding the effects of other income/expenses, impairment charges, gains/(losses) on sale or amendments of royalty and streams and unusual non-recurring items. The Company believes that adjusted net income is a useful measure of the Company’s performance because it adjusts for items which may not relate to or have a disproportionate effect on the period in which they are recognized, impact the comparability of our core operating results from period to period, are not always reflective of the underlying operating performance of our business and/or are not necessarily indicative of future operating results. The Company’s royalty revenue and silver sales are converted to a GEO basis by dividing the royalty revenue and silver sales for a period by the average gold price based on the LBMA Gold Price PM Fix per ounce for the same respective period. These GEOs when combined with the gold ounces sold from the Company’s gold streams equal total GEOs sold. Average realized gold price per GEO is calculated by dividing the total revenue by the GEOs sold. Average cash cost per GEO is calculated by dividing the total cost of sales, less depletion, by the GEOs sold. In the precious metals mining industry, these are common performance measures but do not have any standardized meaning. Cash operating margin is calculated by subtracting the average cash cost per GEO sold from the average realized gold price per GEO sold. The Company presents cash operating margin as it believes that certain investors use this information to evaluate the Company’s performance in comparison to other companies in the precious metal royalty and streaming sector who present results on a similar basis. The Company has also used the non-IFRS measure of operating cash flows excluding changes in non-cash working capital. This measure is calculated by adding back the decrease or subtracting the increase in changes in non-cash working capital to or from cash provided by (used in) operating activities. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate these non-IFRS measures differently. The 2021 forecast herein assumes a gold price of $1,700 per ounce and a silver price of $21 per ounce. The forecast was derived using information that is available in the public domain as at the date hereof, which included guidance and estimates prepared and issued by management of the operators of the mining operations in which Maverix holds an interest. The forecast is sensitive to the performance and operating status of the underlying mines. None of the information has been independently verified by Maverix and may be subject to uncertainty. There can be no assurance that such information is complete or accurate. Maverix’s business, operations, financial condition, and financial outlook could be materially adversely affected by the continued impact of the COVID-19 global health pandemic. At this time, Maverix cannot reasonably estimate the duration of any potential business disruptions, impact to underlying operations that Maverix holds an interest in or any related financial impact that is related to or caused by COVID-19.

 

Qualified Person

 

Brendan Pidcock, P.Eng., is Vice President, Technical Services for Maverix, and a qualified person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has reviewed and approved the scientific and technical disclosure contained in this news release.

 

About Maverix

 

Maverix is a gold-focused royalty and streaming company with a globally diversified portfolio of over 100 assets. Maverix’s mission is to increase per share value by acquiring precious metals royalties and streams. Its shares trade on both the NYSE American and the TSX.

 

Posted May 14, 2021

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