Maverix Metals Inc. (NYSE American: MMX) (TSX: MMX) is pleased to announce operating and financial results for the second quarter ended June 30, 2022.
Second Quarter 2022 Highlights
Summary of Quarterly Results
(in thousands of USD, except for GEOs and per share amounts)
|June 30, 2022||June 30, 2021|
|Statement of Income and Comprehensive Income|
|Basic earnings per share||$||0.02||$||0.03|
|Diluted earnings per share||$||0.02||$||0.03|
|Cash flow from operating activities||$||7,983||$||8,813|
|Dividends declared per share||$||0.0125||$||0.0125|
|Non-IFRS and Other Measures1|
|Adjusted net income||$||4,038||$||3,739|
|Adjusted basic earnings per share||$||0.03||$||0.03|
|Average realized gold price per GEO||$||1,856||$||1,816|
|Average cash cost per GEO||$||236||$||197|
|Cash operating margin per GEO||$||1,620||$||1,619|
|Cash flow from operating activities, excluding changes in non-cash working capital||$||9,596||$||9,313|
For complete details please refer to the unaudited condensed interim consolidated financial statements and associated Management Discussion and Analysis for the three and six months ended June 30, 2022, 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 second quarter results please use this link: Q2 2022 Results
Omolon Royalty Update
On July 21, 2022, Polymetal International plc announced that production targets were achieved for the second quarter. In Q2, the Omolon mine produced approximately 43,000 ounces of gold and 100,000 ounces of silver. However, international sanctions against Russia continue to have a material impact on sales, procurement and logistics. Restrictions in the second quarter forced Polymetal to reduce shipments of gold creating a gap between sales and production. Maverix reports revenue and GEOs based on ounces sold and not produced and, therefore, recognized almost none of the approximately 1,100 attributable GEOs produced in the second quarter. Polymetal has noted that the gap between sales and production will likely be closed in the third quarter as it ramps up export sales to various Asian markets, but the exact timing is difficult to judge. Polymetal has reiterated its production guidance for the year, however, it did note a risk of underperformance given persistent lockdowns in Asia. Maverix understands that proactive contingency planning has been initiated by Polymetal to maintain business continuity in the event of adverse developments, but no assurances can be made in this regard. The conflict between Russia and Ukraine and any restrictive actions that have or may be taken in response thereto, such as sanctions, export and or currency controls, could have negative impacts on Polymetal’s ability to continue operation of Omolon and Polymetal’s ability to make payments to the Company. Maverix continues to work with Polymetal to effect payment of royalties from Omolon in a way that does not breach any relevant sanctions. At June 30, 2022, the Company’s accounts receivable related to its Omolon royalty interest is $4.4 million.
For more information, please refer to polymetalinternational.com and see the news releases dated July 21, 2022, June 23, 2022 and April 25, 2022.
Adjusted 2022 Outlook
Given the ongoing uncertainty relating to the Omolon royalty, Maverix is excluding Omolon GEOs from its outlook for the second half of 2022. Excluding any contribution from Omolon in the second half, we expect 28,000 to 31,000 GEOs attributable for 2022, which compares to the previously announced guidance of 32,000 to 35,000 attributable GEOs1 for 2022, inclusive of GEOs attributable to the Omolon royalty.
Dan O’Flaherty, CEO of Maverix, commented, “Maverix’s portfolio had a steady second quarter related to underlying production and we welcomed Orla’s declaration of commercial production at its Camino Rojo mine. There were also several meaningful developments at other assets within our portfolio, related to ongoing exploration efforts and mineral resource updates, some of which are described below. However, given the ongoing uncertainty relating to our Omolon royalty, we believe it is prudent to exclude Omolon GEOs from our outlook for the second half of 2022. As inflation continues to impact the operating and capital costs of mining companies, our diversified high-margin royalty and stream portfolio is well-positioned to reduce exposure to rising costs and other global supply chain issues. With the challenging equity and debt market conditions, we continue to evaluate several new opportunities to deploy our capital in a financially disciplined manner to bolster our portfolio and generate attractive rates of return for our investors.”
Asset Portfolio Updates
Camino Rojo (2% NSR)
Orla Mining Ltd. declared commercial production at its Camino Rojo oxide mine effective April 1, 2022, after a successful commissioning period which included the ramp up of mining and processing to sustained throughput levels. In the second quarter, Camino Rojo had record quarterly gold production of 25,672 ounces. Camino Rojo’s processing throughput for the quarter averaged 18,245 tonnes per day, exceeding nameplate capacity of 18,000 tonnes per day.
For more information, please refer to orlamining.com and see the news release dated July 11, 2022.
Beta Hunt (4.75% Gold Royalty and 1.5% Nickel Royalty)
On July 19, 2022, Karora Resources Inc. announced the drilling of the highest grade interval to date at Beta Hunt’s Larkin Zone, 29.8 grams per tonne (“g/t”) gold over 7.8 metres, as part of its ongoing underground diamond drill program at Beta Hunt. Results from the drilling program support and extend the mineralization already defined by the current Larkin mineral resource and provide strong encouragement for potential high-grade mineralization to continue at depth. Work on the second decline at Beta Hunt continues to track on budget, and ahead of schedule, with expected completion in Q1 2023.
On May 11, 2022, Karora announced an updated nickel measured and indicated resource estimate for Beta Hunt that showed an increase of 22% to 19,600 tonnes of nickel and an increase in the nickel inferred resource of 52% to 13,200 tonnes of nickel. The significant addition includes the Maiden 50C Trend resource comprising a measured and indicated resource of 153,000 tonnes at 2.8% nickel for 4,300 tonnes of nickel and an inferred mineral resource of 124,000 tonnes at 3.1% nickel for 3,800 tonnes of nickel. The 50C Trend is part of the Gamma Block Nickel mineral resource which is defined over 800 metres of strike with potential to extend a further 1.8 kilometres to 2.6 kilometres along strike. The updated mineral resource will be used to support a preliminary economic assessment of expanded nickel production at Beta Hunt.
For more information, please refer to karoraresources.com and see the news releases dated July 19, 2022, July 14, 2022 and May 11, 2022.
South Railroad (2% NSR)
On June 13, 2022, Orla announced the acquisition of Gold Standard Ventures Corp. Gold Standard’s primary asset is its high-quality, open pit, heap leach South Railroad project located in the prolific Carlin trend in Nevada. Gold Standard previously released the results of a robust feasibility study on South Railroad which outlines a 10.5 year mine life with total gold production of over one million ounces and average annual gold production of 124,000 ounces.
For more information, please refer to goldstandardv.com and see the news release dated June 13, 2022.
McCoy-Cove (1.5% + 2.0% NSR)
On July 21, 2022, i-80 Gold Corp. announced that the underground, advanced-exploration, program at the McCoy-Cove project is progressing according to plan. The Cove mine portal has been collared and more than 300 metres of the decline has been constructed. The Phase 1 program will include the construction of an initial level with multiple drill bays to provide access for upgrading resources. Approximately 40,000 metres of underground definition and expansion drilling is anticipated to commence in Q4 2022 followed by a feasibility study anticipated to be completed in 2023.
For more information, please refer to i80gold.com and see the news release dated July 21, 2022.
Panton (2.0% NSR on Platinum Group Metals (“PGM”))
On June 21, 2022, Future Metals NL announced an updated mineral resource estimate for the Panton PGM-Nickel project of 5.0 million ounces of palladium, platinum and gold and 238 thousand tonnes of nickel, at a grade of 1.66 g/t palladium equivalent. The updated resource confirms the Panton deposit to be of a global scale and the second largest PGM deposit in Australia. Future Metals continues to progress the metallurgy work at Panton and are able to move towards a scoping study to make a preliminary assessment on the best path forward.
For more information, please refer to future-metals.com.au and see the news release dated June 21, 2022.
2022 Asset Handbook
Maverix has published its 2022 Asset Handbook, which provides detailed information on the Company’s diverse portfolio of 125 royalties and streams. The document is available on the Company’s website at maverixmetals.com.
The Company is pleased to announce that its Board of Directors has approved the payment of the quarterly cash dividend of $0.0125 per common share. The dividend will be paid on or about September 15, 2022, to shareholders of record as of the close of business on August 31, 2022.
The 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.
|1Please refer to the Non-IFRS Measures section at the end of this news release.|
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.
Maverix is a gold-focused royalty and streaming company with a globally diversified portfolio of over 120 assets. Maverix’s mission is to increase per share value by acquiring precious metals royalties and streams.
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We acknowledge the [financial] support of the Government of Canada.