The US$90 million deal for 11 gold royalties on a selection of Newmont’s North American assets, gives Vancouver-based Maverix an enhanced growth pipeline with near term cash flow, the company said in a statement.
Newmont will also increase its ownership stake in Maverix to around 30% by taking on 12 million additional shares valued at US$5 per share.
READ: Maverix Metals posts record 2Q revenue of US$11 million from its portfolio of precious metals assets
Key assets from the royalty package include a 2% net smelter return (NSR) royalty on the Camino Rojo project in Mexico, which boasts proven and probable reserves of around one million ounces of gold and 20.1 million ounces of silver, as well as a 1% NSR royalty on the high-grade Cerro Blanco project in Guatemala with proven and probable reserves of 3.4 million tonnes at 8.5 g/t gold and 32.2 g/t silver containing 940,000 ounces of gold and 3.6 million ounces of silver.
Additional assets include a sliding scale NSR royalty on the Mother Lode project, a 1% NSR royalty on the Imperial project, a 2% NSR on the Ana Paula project and a 0.5% royalty on the Trenton Canyon and Buffalo Valley projects.
Maverix CEO Dan O’Flaherty told shareholders that the transaction marks “another important milestone” in the firm’s growth trajectory.
“The acquisition of these high-quality royalties enhances our existing portfolio and adds to our already robust pipeline of development assets,” O’Flaherty said in a statement. “We want to thank Newmont for continuing to entrust the Maverix team with unlocking additional value from their royalty assets."
In addition to issuing 12 million shares to Newmont, Maverix will make contingent cash payments of up to US$15 million in tranches of $5 million for each of the Mother Lode, Imperial, and Ana Paula projects if they achieve commercial production within five years of closing the transaction.
Certain royalties in the 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.
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