Maverix Metals Inc. (NYSE American: MMX) (TSX: MMX) is pleased to announce that it has entered into a definitive agreement to acquire a portfolio of 25 precious metals royalties from Kinross Gold Corporation.
As consideration for the Royalty Portfolio, Maverix will issue to Kinross a total of 11.2 million common shares and make a cash payment of US$25 million upon closing of the transaction. Closing is expected to occur on or before December 31, 2019, and at which time Kinross will own a 9.4% basic interest in Maverix.
Certain royalties in the Royalty Portfolio are subject to rights of first refusal as well as the requirement for various transfer consents. Any proceeds from the exercise of a right of first refusal will be paid to Maverix.
Dan O’Flaherty, CEO of Maverix, commented, “This transaction is another milestone in Maverix’s continued growth. We would like to thank Kinross for entrusting us to deliver superior value for their royalty portfolio. This transaction further validates our business model and growth strategy, and we welcome Kinross as a significant shareholder.”
Maverix will fund the transaction through a combination of cash on hand and drawing on its existing credit facility.
A 2.5% net smelter return royalty on the DeLamar deposit which forms a portion of the DeLamar project, located in southwestern Idaho, and operated by Integra Resources. DeLamar has over 100 years of prior open pit and underground mining operations, with total historic production of 1.6 million ounces of gold and 100 million ounces of silver. In September 2019, Integra Resources completed a preliminary economic assessment for the DeLamar project that outlined a 10 year operation with an after-tax IRR of 43%. The NSR royalty decreases to 1.0% after C$10 million in royalty payments have been made. (2)
For more information on the DeLamar project, please visit www.integraresources.com.
A sliding scale gross revenue royalty on certain deposits that form part of the Omolon hub, located in the Magadan Region, Russia, and operated by Polymetal, a leading precious metals mining company listed on the London Stock Exchange with a market capitalization of approximately US$7 billion. The Omolon hub began operating in 2010 and produced 195,000 gold equivalent ounces in 2018. The gross revenue royalty is equal to 2.0% when the gold price is above US$650 per ounce. (3)
For more information on the Omolon hub, please visit www.polymetalinternational.com.
Nevada Development Projects
The Royalty Portfolio contains seven royalties on development and exploration assets in Nevada, including a 2.0% NSR royalty on the Railroad project located in the Carlin Trend and operated by Gold Standard Ventures Corp. and a 2.0% NSR royalty on the McCoy-Cove project located in the Battle Mountain trend and operated by Premier Gold Mines Limited.
In September 2019, Gold Standard completed a pre-feasibility study for the South Railroad project that outlined an initial eight year mine life producing an average of 116,000 ounces of gold per year (4).
In May 2018, Premier Gold announced the results of a preliminary economic assessment of the Cove project that outlined an eight year mine life producing an average of 92,400 ounces of gold per year. Barrick Gold currently has an option to earn a 60% interest in the exploration portion of the McCoy-Cove property by spending US$22.5 million in exploration before June 30, 2022. Maverix already holds another 1.5% NSR royalty on the McCoy-Cove project. (5)
Future Projects with Large Gold Mineral Inventories
The Royalty Portfolio contains royalties on assets with large mineral inventories, including a 1.25% royalty on 25% of the gross revenues from the Cerro Casale project located in Chile. Cerro Casale is part of the Norte Abierto joint venture between Barrick Gold and Newmont Goldcorp and contains approximately 23 million ounces of gold in proven and probable mineral reserves. (6)
The Royalty Portfolio also contains a 2.0% NSR royalty on the Hammond Reef project in northwest Ontario owned by Agnico Eagle which has measured and indicated resources of approximately 4.5 million ounces of gold. (7)
|Friday-Petsite||Endomines AB||USA||Operating||3.0% NSR|
|Kensington||Coeur Mining Inc.||USA||Operating||2.5% NRR(8)|
|Monument Bay||Yamana Gold||Canada||Exploration||1.5% NSR|
|Morondo||Montage Gold Corp.||Cote d’Ivoire||Exploration||2.0% NSR|
|Golden Eagle||Fiore Gold Ltd.||USA||Exploration||2.0%NSR|
|Spring Valley (Exploration)||Waterton Global Resource Management, Inc.||USA||Exploration||2.0% NSR|
|Esperanza-Chimberos||Kingsgate Consolidated Limited||Chile||Exploration||2.0% – 3.0% NSR|
|Additional 12 other earlier stage assets|
Pursuant to the Transaction, Kinross and Maverix will enter into the Investor Agreement pursuant to which Kinross and Maverix will agree that, among other things:
|(1) Revenue and cash flow projections are estimated using $1,400/oz gold and $16/oz silver and management estimates for the timing and volume of future metal production based on publicly available information.|
|(2) For more information on the DeLamar project, please visit www.integraresources.com and refer to DeLamar project description page, the news release dated September 9, 2019, and the Technical Report entitled “Technical Report and Preliminary Economic Assessment for the DeLamar and Florida Mountain Gold Silver Project, Owyhee County, Idaho, USA”.|
|(3) For more information on the Omolon hub, please visit www.polymetalinternational.com and refer to the Omolon hub description page.|
|(4) Royalty only covers certain deposits. For more information on the Railroad project, please visit www.goldstandardv.com and refer to the Railroad project description page, the news release dated September 10, 2019, and the Technical Report entitled “South Railroad Project NI 43-101 Technical Report, Preliminary Feasibility Study, Carlin Trend, Nevada, USA”.|
|(5) 2.0% NSR royalty only covers certain deposits. For more information on the McCoy-Cove project, please visit www.premiergoldmines.com and refer to the McCoy-Cove description page, the news release dated May 18, 2018, and the Technical Report entitled “Preliminary Economic Assessment for the Cove Project, Lander County, Nevada”.|
|(6) Proven and probable mineral reserves as at December 31, 2016. Please refer to the Barrick Gold 2016 Annual Report for more information regarding the mineral reserves. Cerro Casale is part of the Norte Abierto joint venture. For mineral reserves and resources for the Norte Abierto joint venture, please refer to the Barrick Gold 2018 Annual Report available at www.barrick.com.|
|(7) Measured and indicated mineral resources as at December 31, 2018. For more information on the Hammond Reef project, please visit www.agnicoeagle.com and refer to the Mineral Reserves & Mineral Resources page and the Hammond Reef description page.|
|(8) Net returns royalty (“NRR”) does not commence until certain conditions are satisfied.|
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.
Maverix is a gold-focused royalty and streaming company with a globally diversified portfolio of 13 operating and 67 pre-production assets. Maverix’s mission is to increase per share value by continuing to add new precious metals royalties and streams.
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