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Maverix Metals Announces First Quarter 2020 Results and Declares Quarterly Dividend

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Maverix Metals Announces First Quarter 2020 Results and Declares Quarterly Dividend

 

 

 

 

 

Maverix Metals Inc. (NYSE American:MMX) (TSX: MMX) is pleased to announce its operating and financial results for the first quarter ended March 31, 2020.

 

The Company has changed its presentation currency from Canadian dollars to U.S. dollars and accordingly the comparative periods have been restated to reflect the change in presentation currency. All amounts in this news release are stated in U.S. dollars unless otherwise indicated.

 

First Quarter 2020 Financial Highlights

 

  • Revenue of $9.3 million;
  • Cash flow from operating activities, excluding changes in non-cash working capital of $5.7 million1;
  • Attributable gold equivalent ounces sold of 5,8711;
  • Average cash cost per attributable gold equivalent ounce sold of $167, resulting in cash operating margins of $1,415 per ounce1;
  • Adjusted net income of $1.0 million1; and
  • Drew down $20.0 million on our revolving credit facility as a precautionary measure due to the current uncertainty surrounding COVID-19.

 

Dan O’Flaherty, CEO of Maverix, commented, “Despite global challenges due to COVID-19, Maverix had a strong start to the year, increasing our revenue and operating cash flow significantly by 64% and 128%, respectively, compared to Q1 2019. Our results demonstrate the strength of the diversified portfolio that we have established.”

 

Summary of Quarterly Results

 

 

Quarter Ended

(in thousands of USD, except for Attributable Gold Equivalent ounce and per share amounts)

  March 31, 2020   March 31, 2019
         
Statement of Income and Comprehensive Income        
Royalty revenue $ 6,076 $ 4,169
Sales $ 3,214 $ 1,499
Total revenue $ 9,290 $ 5,668
Cash flow from operating activities $ 4,846 $ 2,128
Net income $ 860 $ 1,158
Basic earnings per share $ 0.01 $ 0.01
Dividends declared per share $ 0.01 $ 0.00
         
Non-IFRS and Other Measures1        
Adjusted net income $ 996 $ 1,323
Total Attributable Gold Equivalent ounces sold   5,871   4,358
Average realized gold price per Total Attributable Gold Equivalent ounce sold $ 1,582 $ 1,301
Average cash cost per Total Attributable Gold Equivalent ounce sold $ 167 $ 152
Cash flow from operating activities, excluding changes in non-cash working capital $ 5,733 $ 3,894

 

For complete details please refer to the Condensed Consolidated Interim Financial Statements and associated Management Discussion and Analysis for the quarter ended March 31, 2020, available on SEDAR (www.sedar.com), EDGAR (www.sec.gov) or on the Company’s website (www.maverixmetals.com).

 

COVID-19 Update

 

The Company continues to monitor and assess the potential impacts of COVID-19 on its employees and business. At this time, all employees continue to work remotely and there are no known cases of COVID-19. The Company is closely monitoring the impact of the COVID-19 pandemic on its portfolio of assets. 

 

As of May 7, 2020, the Company is aware of two operations located in Mexico (La Colorada and San Jose) that are temporarily suspended due to government restrictions imposed as a result of COVID-19. Mining has recently been classified as an essential activity in Mexico. This essential status should allow mining companies to resume production from May 18, 2020 as part of Mexico’s economic reactivation. Pan American Silver has stated it is currently developing plans to restart La Colorada.

 

Additionally, TMAC Resources announced it would be scaling down operations at Hope Bay and expects to run the processing plant through the end of July with material from its stockpiles and limited mine production, but there may be opportunities to extend this further. On May 8, 2020, TMAC announced that it had entered into a definitive agreement to be acquired by Shandong Gold Mining Co. Ltd., who as one of the world’s largest gold producers, has the financial strength, technical capability and long-term vision to maximize the value of Hope Bay.2

 

The evolving and unpredictable impacts of the COVID-19 pandemic resulted in the Company withdrawing its 2020 attributable gold equivalent ounce guidance on March 24, 2020. Maverix will continue to monitor the situation closely and update the market as additional information becomes available.

 

Dividend

 

The quarterly cash dividend of US$0.01 per common share will be paid on or about July 15, 2020, to shareholders of record as of the close of business on June 30, 2020.

 

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 the Company’s Board of Directors.

 

 

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 Attributable Gold Equivalent ounces sold, average realized gold price per Attributable Gold Equivalent ounce sold, average cash cost per Attributable Gold Equivalent ounce sold, 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 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 an Attributable Gold Equivalent ounce 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 Attributable Gold Equivalent ounces when combined with the gold ounces sold from the Company’s gold streams (individually and collectively referred to as “Attributable Gold Equivalent”) equal total Attributable Gold Equivalent ounces sold. Average realized gold price per Attributable Gold Equivalent ounce sold is calculated by dividing the total revenue by the Attributable Gold Equivalent ounces sold. Average cash cost per Attributable Gold Equivalent ounce sold is calculated by dividing the total cost of sales, less depletion, by the Attributable Gold Equivalent ounces 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 Attributable Gold Equivalent ounce sold from the average realized gold price per Attributable Gold Equivalent ounce 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 are 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.
2 Please refer to TMAC’s news releases dated March 20, 2020 and May 8, 2020.

 

 

Qualified Person

 

Doug Ward, B.Sc., Mining Engineering, MMSA, 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 press 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 15, 2020

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