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Maverix Metals' first quarter results show strength of royalty group's asset portfolio

Operating cashflow for the three months was US$4.8 million compared to US$2.1 million in the same period a year earlier

Maverix Metals Inc -
The cash dividend of US$0.01 per share will be paid on or around July 15 this year to shareholders of record as of June 30

Maverix Metals Inc (TSE:MMX) (NYSEAMERICAN:MMX), the royalty and streaming group with a portfolio of over 100 assets, has reported a strong first-quarter performance and declared a dividend for the three month period, which will be paid in July.

"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," noted CEO Dan O'Flaherty in the result statement. "Our results demonstrate the strength of the diversified portfolio that we have established."

READ: Maverix Metals enjoyed many growth milestones in 2019; posts record revenue

The company is now reporting in US dollars, rather than Canadian, and said net income was US$860,000 in the three months to end-March, 2020, versus US$1.1 million in the same period last year, on revenue of US$9.2 million, compared to US$5.6 million in 1Q, 2019. Of that total revenue, royalty revenue came in at US$6million versus US$4.1 million a year ago.

Operating cashflow for the three months was US$4.8 million compared to US$2.1 million in the same period a year earlier.

The cash dividend of US$0.01 per share will be paid on or around July 15 this year to shareholders of record as of June 30. 

Maverix said it was closely monitoring the impact of the coronavirus pandemic and its unpredictability on its portfolio and noted it had withdrawn its 2020 attributable gold equivalent ounce guidance in March.

TMAC Resources, where Maverix has a net smelter royalty, announced it would be scaling down operations at Hope Bay, Canada, 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, noted the firm.

In May, TMAC announced that it had entered into a definitive agreement to be acquired by Shandong Gold Mining Co, which, noted Maverix, is one of the world's largest gold producers and has the financial strength and vision to maximize the asset's value.

Maverix noted that two operations located in Mexico - La Colorada and San Jose - were temporarily suspended due to government restrictions imposed as a result of the coronavirus (COVID-19) pandemic.

"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," the group added.

Shares added 1,57% to stand at C$6.47 each.

---Updates for share price---

Contact the author at giles@proactiveinvestors.com

Quick facts: Maverix Metals Inc

Price: 6.45 CAD

TSX:MMX
Market: TSX
Market Cap: $906.15 m
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