(Maverix Metals, 1.Sep.2022) — Maverix Metals Inc. (NYSE American: MMX) (TSX: MMX) has acquired a portfolio of 22 royalties from Barrick Gold Corp. for upfront cash consideration of $50mn and contingent consideration of up to $10mn depending on certain events occurring (the “Transaction”).
The Royalty Portfolio includes royalties on development, advanced exploration and exploration stage projects located predominantly in Canada, the United States, and Australia. The portfolio comprises multiple assets that contain multi-million gold equivalent ounces of reserves and resources, highlighted by a 1.0% royalty on Skeena Resources‘ Eskay Creek gold-silver project in the prolific Golden Triangle of British Columbia. The Eskay Creek project is currently undergoing a feasibility study that is expected to be completed in the third quarter of 2022.
Dan O’Flaherty, CEO of Maverix, commented, “This transaction marks another important milestone in our continued growth at Maverix. We are pleased to add Barrick alongside Newmont, Pan American Silver, Kinross and Gold Fields, to the list of reputable counterparties from which we have acquired royalty portfolios. This portfolio boasts significant existing attributable mineral inventory with meaningful exploration potential in historic mining geographies. The acquisition increases our portfolio to a total of 147 royalties and streams and enhances our already robust exposure to the next generation of gold mines.”
Eskay Creek Royalty
A 1.0% net smelter return (“NSR”) royalty on the Eskay Creek project, located in British Columbia, operated by Skeena Resources Limited.
Eskay Creek is a past-producing gold-silver mine located in the Golden Triangle of northwest British Columbia. Eskay Creek has proven and probable mineral reserves of 26.4 million tonnes at 3.37 grams per tonne (“g/t”) gold and 94 g/t silver containing approximately 2.9 million ounces of gold and 80.2 million ounces of silver. In July 2021, Skeena completed a pre-feasibility study for the project which highlighted a high-grade open-pit operation producing an average of 249,000 ounces of gold and 7.2 million ounces of silver per year with an initial mine life of approximately 10 years generating an after-tax NPV5% of C$1.4 billion and a 56% IRR at a $1,550 per ounce gold price. Skeena is currently completing a feasibility study which is expected to be released in the third quarter of 2022. (1)
Skeena has the right to purchase 0.5% of the 1.0% royalty for a cash payment of C$17.5 million.
For more information on Eskay Creek, please visit skeenaresources.com.
Bullfrog Gold Royalty
A 2.0% NSR royalty on the Bullfrog Gold project operated by Augusta Gold Corp.
Bullfrog Gold is a past-producing gold-silver mine located in the prolific Bullfrog mining district near Beatty, Nevada. Bullfrog Gold has measured and indicated resources of 71 million tonnes at 0.53 g/t gold and 1.26 g/t silver containing approximately 1.2 million ounces of gold and 2.9 million ounces of silver. Additionally, there are inferred resources of 16.7 million tonnes at 0.48 g/t gold and 0.96 g/t silver containing approximately 0.3 million ounces of gold and 0.5 million ounces of silver. Augusta expects to complete a pre-feasibility study in the fourth quarter of 2022 with a path to commercial production by 2024, subject to the preparation of up-to-date economic studies, an affirmative board production decision, and financing. (2)
The 2.0% royalty rate is subject to change such that the maximum aggregate royalty on any individual mining claim shall not exceed 5.5% but shall be a minimum 0.5% on any individual mining claim.
For more information on Bullfrog Gold, please visit augustagold.com.
Lagunas Norte Royalty
A 2.0% NSR royalty on the refractory sulphide ore project (“PMR”) of the Lagunas Norte mine operated by Boroo Pte Ltd.
Lagunas Norte is an open-pit heap-leach mine located in the Alto Chicama mining district in northern Peru and has produced over 10 million ounces of gold since 2005. As of June 30, 2021, Lagunas Norte had proven and probable reserves of 49.4 million tonnes at 2.49 g/t gold and 6.24 g/t silver containing approximately 4.0 million ounces of gold and 9.9 million ounces of silver. In December 2021, Boroo announced a new technical report for Lagunas Norte, which included the PMR project and had a 22 year mine life producing an average of 147,000 ounces of gold per year. (3)
The royalty terminates after one million ounces of gold has been sold from the PMR and Boroo has the right to buy back the royalty for a cash payment of $16mn before July 1, 2023.
For more information on the Lagunas Norte PMR Project, please visit boroomc.com.sg.
Sanutura (South Houndé) Royalties
A pair of 1.0% – 2.0% NSR royalties on the Tankoro deposit of the Sanutura project operated by Sarama Resources Ltd.
The Tankoro deposit is the primary deposit of Sanutura, Sarama’s flagship project located in the prolific Houndé Belt in Burkina Faso. The Tankoro deposit hosts an indicated resource of 9.4 million tonnes at 1.9 g/t gold containing approximately 0.6 million ounces of gold and an inferred resource of 43.6 million tonnes at 1.4 g/t gold containing approximately 1.9 million ounces of gold. Sarama is currently completing a 50,000 metre drill program to update the mineral resource estimate which will lead to a preliminary economic assessment expected to be completed in the fourth quarter of 2023. (4)
The royalty rate for each royalty is 2.0% when the realized gold price is greater than $1,500 per ounce, 1.5% when the realized gold price is between $1,300 per ounce and $1,500 per ounce, and 1.0% when the realized gold price is less than $1,300 per ounce. Each of the royalties terminate after one million ounces of gold has been sold from the applicable covered areas. The Sanutura royalties are subject to a right of first refusal.
For more information on Sanutura, please visit saramaresources.com.Other Royalties
|Central Musgrave||NiCo Resources||Australia||Exploration||1.5% NSR|
|Maitland||Dakota Gold||USA||Exploration||2.5% NSR|
|Cose||Pan American Silver||Argentina||Operating||2.5% NSR|
|Euro (Laverton)||Focus Minerals||Australia||Development||55.18% of $10/oz (5)|
|Bulletin (Bardoc)||St Barbara||Australia||Development||66.7% of A$2.00/t gold ore|
|Ethiunda (Honeymoon)||Boss Energy||Australia||Development||1.5% – 3.5% NSR (6)|
|Hopewell (Kokomo/Sconi)||Australian Mines||Australia||Development||A$1.00 – $2.00/t ore (7)|
|Colosseum||Dateline Resources||USA||Exploration||2.5% NSR|
|Biddy Well||Northern Star Resources||Australia||Exploration||1.0% NSR|
|Camelback Bore||Glencore||Australia||Exploration||A$0.20/t of Ni laterite ore (8)|
|Eva Cobar (Coronation Hill)||UAU Pty||Australia||Exploration||45% of 2.0% NSR (9)|
|Lone Star (Giants Reef)||Emmerson Resources||Australia||Exploration||1.0% NSR (10)|
|Musgrave||Power Minerals||Australia||Exploration||1.5% NSR|
|Orban||Evolution Mining||Australia||Exploration||20% – 25% NPI or$0.50 – $1.25/t ore (11)|
|Nipisi Area||Canadian Natural Resources||Canada||Exploration||1.0% – 2.5% GORR (12)|
|El Toqui||Laguna Gold||Chile||Idle||2.0% NSR (13)|
|Sunrise||AngloGold Ashanti||Australia||Idle||Variable $/oz (14)|
Maverix will pay $50mn in cash to acquire the Royalty Portfolio. In addition, Maverix has agreed to make up to a total of $10mn in contingent payments if the following events occur within six years of the closing date of the Transaction: (i) $6mn payable upon Eskay Creek receiving all material permits required to commence construction; (ii) $2mn payable when Maverix has received $10mn in payments from the Royalty Portfolio (excluding any proceeds derived from Eskay Creek); and (iii) $2mn payable when Maverix has received $20mn in payments from the Royalty Portfolio (excluding any proceeds derived from Eskay Creek).
Maverix will use cash on hand and its revolving credit facility to fund the upfront purchase price of the Transaction. The Transaction is expected to close by the end of September and is subject to customary closing conditions.
|(1) Mineral reserves effective as of June 30, 2021. For more information on Eskay Creek, please refer to the Eskay Creek description page on the Skeena website, the news release dated July 22, 2021 and the Technical Report entitled “Eskay Creek Project, NI 43-101 Technical Report and Prefeasibility Study, British Columbia, Canada” dated July 22, 2021, available at skeenaresources.com or under Skeena’s profile at sedar.com.|
(2) Mineral resources effective as of December 31, 2021. For more information on Bullfrog Gold, please refer to the Bullfrog Gold description page on the Augusta website, the June 2022 corporate presentation and the Technical Report entitled “NI 43-101 Technical Report, Mineral Resource Estimate, Bullfrog Gold Project, Nye County, Nevada” dated December 31, 2021, available at augustagold.com or under Augusta’s profile at sedar.com.
(3) Mineral reserves effective as of June 30, 2021. For more information on Lagunas Norte, please refer to the Lagunas Norte description page on the Boroo website and the news release dated December 1, 2021.
(4) Mineral resources effective as of November 16, 2021. For more information on Sanutura, please refer to the Sanutura description page on the Sarama website, the news release dated February 7, 2022 and the Technical Report entitled “NI 43-101 Technical Report, Sanutura Project, South-West Burkina Faso” dated February 7, 2022, available under Sarama’s profile at sedar.com.
(5) Royalty takes effect after the first 50,000 gold ounces have been recovered.
(6) Royalty is 1.5% on tertiary uranium, 3.5% on hard rock uranium and 2.5% on all other minerals.
(7) Royalty is A$1.00/t on the first 1.0 million tonnes, A$1.50/t on the next 2.0 million tonnes and A$2.00/t thereafter. Cash payment of A$50,000 per annum to payee during the lease term.
(8) Royalty is capped at 1,750 kt of nickel laterite ore. The Camelback Bore royalty is subject to a right of first offer.
(9) Payees are entitled to A$0.20/kg U3O8 (or equivalent) payment on discovery of an indicated mineral resource.
(10) Royalty is capped at A$825,000 in cumulative royalty payments.
(11) Royalty is the greater of (i) 25% net profits interest (“NPI”) up to 20,000 ounces of gold, 20% NPI thereafter and (ii) A$0.50/t ore (<1 g/t gold) or A$1.25/t ore (>2 g/t gold).
(12) Royalty is 1.5% on the first 15,000 Bbl/day and 2.5% on the second 15,000 Bbl/day subject to a cap at 30,000 Bbl/day.
(13) Royalty does not include lead or zinc.
(14) Royalty varies based on gold price and sliding scale rate.
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 (“NI 43-101”), has reviewed and approved the scientific and technical disclosure contained in this news release.