Newmont to Increase its Ownership in
Maverix
VANCOUVER, BC, Sept. 21, 2020 /CNW/ - Maverix Metals Inc.
(the "Company" or "Maverix") (NYSE-American: MMX) (TSX: MMX) is
pleased to announce that it has entered into a binding purchase and
sale agreement to acquire a portfolio of 11 gold royalties (the
"Royalty Portfolio") from Newmont Corporation ("Newmont") for
upfront consideration of $75 million
and contingent payments of up to $15
million (the "Transaction").
All dollar figures are in U.S. dollars unless otherwise
noted.
Transaction Highlights
- Addition of High Quality Gold Royalties Based in the
Americas: The Royalty Portfolio consists of gold assets located
in Mexico, USA, Canada
and Guatemala, ranging from in
construction to exploration stage;
- Growth Pipeline Enhanced with Near Term Cash Flow and
Accretive to Net Asset Value per Share: Production at the
Camino Rojo project, located in Zacatecas, Mexico, is expected to commence in
2021 and early works activities are expected to commence at the
Cerro Blanco project, located in
Jutiapa, Guatemala, by the first
quarter of next year;
- Focused Counterparties Well Positioned to Advance
Projects: The operations underlying the Royalty Portfolio
include flagship assets for each of Orla Mining Ltd., Bluestone
Resources Inc., Corvus Gold Inc., and KORE Mining Ltd.; and
- Newmont Relationship Strengthened: Newmont to increase
its ownership in Maverix, re-affirming its endorsement of the
Maverix investment by taking additional equity.
Dan O'Flaherty, CEO of Maverix,
commented, "This transaction marks another important milestone in
our continued growth at Maverix. The acquisition of these high
quality royalties enhances our existing portfolio and adds to our
already robust pipeline of development assets. We want to thank
Newmont for continuing to entrust the Maverix team with unlocking
additional value from their royalty assets."
Royalty Portfolio
Asset
|
Operator
|
Location
|
Stage
|
Royalty
|
Camino
Rojo
|
Orla Mining
Ltd.
|
Zacatecas,
Mexico
|
Construction
|
2.0% NSR
|
Cerro
Blanco
|
Bluestone Resources
Inc.
|
Jutiapa,
Guatemala
|
Development
|
1.0% NSR
|
Mother
Lode
|
Corvus Gold
Inc.
|
Nevada,
USA
|
Development
|
1.0% – 2.0%
NSR
|
Imperial
|
KORE Mining
Ltd.
|
California,
USA
|
Development
|
1.0% NSR
|
Ana Paula
|
Argonaut Gold
Inc.
|
Guerrero,
Mexico
|
Development
|
2.0% NSR
|
Trenton
Canyon
|
SSR Mining
Inc.
|
Nevada,
USA
|
Exploration
|
0.5% NSR
|
Buffalo
Valley
|
SSR Mining
Inc.
|
Nevada,
USA
|
Exploration
|
0.5% NSR
|
Cristina
|
Criscora, S.A. de
C.V.
|
Chihuahua,
Mexico
|
Exploration
|
2.0% NSR
|
Yecora
|
Criscora, S.A. de
C.V.
|
Sonora,
Mexico
|
Exploration
|
1.0% NSR
|
Algoma-Talisman
|
Red Pine Exploration
Inc.
|
Ontario,
Canada
|
Exploration
|
2.0% NSR
|
Sprogge
|
Seabridge Gold
Inc.
|
Yukon,
Canada
|
Exploration
|
0.63% NSR
|
Key Assets
Camino Rojo
Royalty
A 2.0% net smelter return ("NSR") royalty on the Camino Rojo
project, located in Zacatecas,
Mexico, and operated by Orla Mining ("Orla"). The royalty
applies to oxide and transitional ore only.
The Camino Rojo land package consists of seven mineral
concessions covering approximately 206,000 hectares and is located
approximately 50 kilometres southeast of Newmont's Peñasquito mine.
The project currently has proven and probable reserves of
approximately 44 million tonnes at 0.73 grams per tonne ("g/t")
gold and 14.2 g/t silver containing approximately 1.0 million
ounces of gold and 20.1 million ounces of silver. A feasibility
study was completed in 2019 that outlined an 18,000 tonne per day
open-pit heap leach operation that would produce an average of
97,000 ounces of gold and 511,000 ounces of silver per year over an
initial 6.8 year mine life. Orla is currently revising the
feasibility study to incorporate the layback agreement with
Fresnillo Plc announced in March of this year which is expected to
increase the amount of recovered gold and mine life of the project.
Orla has pre-ordered and committed to over $50 million for long-lead time items and expects
to begin production in 2021. (1)
The Camino Rojo royalty is subject to a right of first refusal
and any proceeds from the exercise of this right of first refusal
will be paid to Maverix.
For more information on Camino Rojo, please visit
www.orlamining.com.
Cerro Blanco
Royalty
A 1.0% NSR royalty on the Cerro
Blanco project, located in Jutiapa, Guatemala, and operated by Bluestone Resources
("Bluestone"), a member of the Lundin Group.
Cerro Blanco is a high grade
gold and silver project 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. Recent
step out and infill drilling has demonstrated strong potential for
additional reserve and resource growth and Bluestone expects to
update its reserves and resources in the first quarter of 2021. A
feasibility study completed in 2019 outlined a high grade
underground operation with annual production of 113,000 ounces of
gold per year at an all-in sustaining cost of $579 per ounce over an initial eight year mine
life. Optimization, engineering and design work is currently
underway and Bluestone expects to arrange its project financing and
initiate early works activities by the first quarter of next year.
(2)
For more information on Cerro
Blanco, please visit www.bluestoneresources.com.
Mother Lode Royalty
A sliding scale NSR royalty on the Mother Lode project, located
in Nevada, USA, and operated by
Corvus Gold. The NSR royalty rate is 2.0% when the gold price is
equal to or greater than $1,400 per
ounce and 1.0% when the gold price is less than $1,400 per ounce and only applies to a portion of
the overall Mother Lode land package.
Mother Lode is a past producing open-pit heap leach project in
the Walker Lane gold belt in Nevada. The project currently has measured and
indicated resources of approximately 53 million tonnes at 0.7 g/t
gold containing 1.2 million ounces of gold. A preliminary economic
assessment ("PEA") for the combined North Bullfrog and Mother Lode
deposits was completed in 2018 outlining a nine year mine life
producing an average of approximately 282,000 ounces of gold per
year.
In May 2020, Corvus announced a
new and large discovery in the Central Intrusive Zone ("CIZ") below
the existing Mother Lode deposit reporting encouraging drill
intercepts including 125.5 metres at 2.6 g/t gold including 14.8
metres at 8.9 g/t gold and 24.7 metres at 4.9 g/t gold. Ongoing
optimization work and an updated PEA is expected before year end
and a resource update for the CIZ target is expected in the second
quarter of 2021. (3)
For more information on Mother Lode, please visit
www.corvusgold.com.
Imperial Royalty
A 1.0% NSR royalty on the Imperial project, located in
southeastern California, USA, and
operated by KORE Mining.
Imperial is a large, near surface oxide gold deposit consisting
of 656 claims covering 5,721 acres. The project currently has
indicated resources of approximately 46 million tonnes at 0.6 g/t
gold containing 877,000 ounces of gold and inferred resources of
approximately 91 million tonnes at 0.5 g/t gold containing 1.3
million ounces of gold. A PEA was completed in 2020 that outlined
an open-pit heap leach operation producing an average of 146,000
ounces of gold per year over an initial eight year mine life.
(4)
For more information on Imperial, please visit
www.koremining.com.
Ana Paula
Royalty
A 2.0% NSR royalty on the Ana Paula project, located in
Guerrero, Mexico, and operated by
Argonaut Gold ("Argonaut").
Ana Paula comprises a 56,000 hectare land package within the
Guerrero gold belt, a prolific
mining area that hosts several large commercial gold operations.
The project currently has proven and probable reserves of
approximately 13.4 million tonnes at 2.4 g/t gold containing
approximately 1.0 million ounces of gold. A pre-feasibility study
was completed in 2017 which outlined an open-pit operation
producing a total of 868,000 ounces of gold over a 7.5 year mine
life.
On September 11, 2020, Argonaut
announced it had entered into a definitive agreement to sell Ana
Paula to 1252201 BC Ltd., a private company that intends to create
a new publicly traded gold development company upon completion of
the acquisition of Ana Paula. (5)
For more information on Ana Paula, please visit
www.argonautgold.com.
Trenton Canyon and Buffalo Valley Royalties
A 0.5% NSR royalty on the Trenton Canyon and Buffalo Valley
properties, located in Nevada,
USA, and owned by SSR Mining Inc. ("SSR").
The Trenton Canyon property consists of 7,350 hectares located
immediately south and along the mineralized trend from the Marigold
mine. The property was previously operated as an open-pit
run-of-mine heap leach operation from 1996 to 2001.
In May 2020, SSR announced that
recent drill results at Trenton Canyon confirmed the position and
grade of historic gold-mineralized intercepts and successfully
extended gold mineralization for potential mineral resource
additions. SSR also confirmed the discovery of a new tabular zone
of potentially continuous sulphide mineralization requiring further
investigation. SSR's exploration plan for 2020 now includes 6,300
metres of core drilling supported by seismic and gravity
geophysical surveys for high-grade, sulphide gold mineralization,
and 75,000 metres of reverse circulation drilling for oxide gold
mineralization. (6)
For more information on Trenton Canyon and Buffalo Valley,
please visit www.ssrmining.com.
Transaction Details
Maverix will issue to Newmont a total of 12,000,000 common
shares and pay $15 million in cash
upon closing of the Transaction (the "Upfront Consideration"). The
deemed price of $5.00 per share for
the common shares issued to Newmont represents a 7.4% discount to
the "market price" as defined in the TSX Company Manual. The
12,000,000 common shares represent approximately 9.4% of the
Company's currently outstanding common shares. The total
consideration of $90 million
represents approximately 13% of the Company's current market
capitalization.
In addition, Maverix has agreed to make contingent cash payments
of up to $15 million if certain
production milestones at certain underlying assets are achieved
within five years of closing of the Transaction. Specifically,
Maverix will make a $5 million cash
payment to Newmont for each of the Mother Lode, Imperial, and Ana
Paula projects if they achieve commercial production within five
years of closing the Transaction.
Closing is expected to occur on or before October 30, 2020, and is subject to certain
conditions, including the approval of the TSX.
Newmont currently owns 30,000,000 common shares of the Company,
representing 23.4% of the Company's current issued and outstanding
common shares, and is therefore considered to be an insider of the
Company. As the value of the total consideration payable to Newmont
pursuant to the Transaction is in excess of 10% of the Company's
market capitalization, the TSX requires disinterested shareholder
approval of the Transaction (excluding the common shares held by
Newmont), which Maverix intends to obtain by written consent in
accordance with applicable TSX rules and policies as set out in
Section 604(d) of the TSX Company Manual. Upon completion of the
Transaction it is anticipated that Newmont will own 42,000,000
common shares or approximately 30% of the issued and outstanding
common shares of 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.
(1) Mineral reserves effective as June 24, 2019. For more information on Camino
Rojo, please refer to Camino Rojo description page on the Orla
website, the September 2020 corporate
presentation, the news releases dated June
25, 2019, March 23, 2020, and
August 13, 2020, and the Technical
Report entitled "Feasibility Study, NI 43-101 Technical Report on
the Camino Rojo Gold Project – Municipality of Mazapil, Zacatecas, Mexico" dated June 25, 2019, available at www.orlamining.com,
or under Orla's profile at www.sedar.com.
(2) Mineral reserves effective January 29, 2019. For more information on
Cerro Blanco, please refer to
Cerro Blanco description page on
the Bluestone website, the Q3 2020 corporate presentation, the news
releases dated January 29, 2019, and
April 20, 2020, and the Technical
Report entitled "Feasibility Study, NI 43-101 Technical Report
Cerro Blanco Project Guatemala" dated January 29, 2019, available at
www.bluestoneresources.com, or under Bluestone's profile at
www.sedar.com.
(3) Mineral resources effective as of
September 18, 2018. For more
information on Mother Lode, please refer to Mother Lode description
page on the Corvus website, the August
2020 corporate presentation, the news releases dated
November 1, 2018, and May 13, 2020, and the Technical Report entitled
"Technical Report and Preliminary Economic Assessment for the
Integrated Mother Lode and North Bullfrog Projects, Bullfrog Mining
District, Nye County, Nevada"
dated November 1, 2018, available at
www.corvusgold.com, or under the Corvus profile at
www.sedar.com.
(4) Mineral resources effective as of
December 30, 2019. For more
information on Imperial, please refer to Imperial description page
on the KORE website, the corporate presentation dated August 27, 2020, the news release dated
April 6, 2020, and the Technical
Report entitled "Preliminary Economic Assessment – Technical Report
Imperial Gold Project California, USA" dated April 6, 2020, available at www.koremining.com,
or under KORE's profile at www.sedar.com.
(5) Mineral reserves effective May 16, 2017. For more information on Ana Paula,
please refer to Ana Paula description page on the Argonaut website,
the August 2020 corporate
presentation, the news release dated September 11, 2020, and the Technical Report
entitled "NI 43-101 Technical Report, Amended Preliminary
Feasibility Study, Guerrero,
Mexico" dated May 16, 2017,
available at www.argonautgold.com.
(6) For more information on Trenton Canyon and
Buffalo Valley, please refer to the SSR news releases dated
June 27, 2019, May 14, 2020, and August
6, 2020, available at www.ssrmining.com.
Related Party Transaction
Under applicable securities legislation and as a result of
Newmont's 23.4% shareholding in Maverix, Newmont is a "related
party" of Maverix and the transaction is considered a "related
party transaction" pursuant to Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). The Company has relied upon
the exemptions provided under Sections 5.5(a) and 5.7(a) of MI
61-101 from certain requirements under MI 61-101. The transaction
was negotiated at arm's length. The Board of the Company approved
the transaction, with Blake Rhodes
abstaining as a result of his interest in Newmont.
Qualified Person
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, has reviewed and approved the scientific and
technical disclosure contained in this news 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 under the symbol "MMX".
Cautionary statements to U.S. investors
Information contained or referenced in this press release or in
the documents referenced herein concerning the properties,
technical information and operations of Maverix has been prepared
in accordance with requirements and standards under Canadian
securities laws, which differ from the requirements of US
securities laws. The terms "mineral resource" and "inferred mineral
resource" used in this press release or in the documents
incorporated by reference herein are mining terms as defined in
accordance with NI 43-101 under guidelines set out in the
Definition Standards for Mineral Resources and Mineral Reserves
adopted by the Canadian Institute of Mining, Metallurgy and
Petroleum Council on 11 December
2005. While the terms "mineral resource", and "inferred
mineral resource" are recognized and required by Canadian
securities laws, they are not recognized by SEC standards and
normally are not permitted to be used in reports filed with the
SEC. Investors are cautioned not to assume that all or any part of
the disclosed mineral resource estimates will ever be confirmed or
converted into reserves that meet the definitions used by the
SEC. Disclosure of contained ounces are or may be
permitted disclosure under regulations applicable to Maverix;
however, the SEC normally only permits issuers to report
mineralization that does not constitute "reserves" by SEC standards
as in-place tonnage and grade without reference to unit of
production measures. Accordingly, certain information contained in
this press release concerning descriptions of mineralization and
mineral resources under these standards may not be comparable to
similar information made public by US companies subject to
reporting and disclosure requirements of the SEC.
Cautionary note regarding forward-looking statements
This release contains certain "forward looking statements" and
certain "forward-looking information" as defined under applicable
Canadian and U.S. securities laws. Forward-looking statements and
information can generally be identified by the use of
forward-looking terminology such as "may", "will", "should",
"expect", "intend", "estimate", "anticipate", "believe",
"continue", "plans" or similar terminology. The forward-looking
information contained herein is provided for the purpose of
assisting readers in understanding management's current
expectations and plans relating to the future. Readers are
cautioned that such information may not be appropriate for other
purposes. Forward-looking statements and information include, but
are not limited to, statements with respect to timing and
completion of the Transaction, the results of a possible exercise
of a right of first refusal, anticipated cash flows upon completion
of the Transaction, future financial reporting by Maverix, the
receipt of payments from Maverix's mining royalty and streaming
portfolio, the requirements for regulatory approvals and third
party consents, Maverix's financial guidance, outlook, proposed
plans for acquiring additional royalty and stream interests and the
potential of such royalty and stream interests to provide returns
and the completion of mine expansion under construction phases at
the mines or properties that Maverix holds an interests in.
Forward-looking statements and information are based on forecasts
of future results, estimates of amounts not yet determinable and
assumptions that, while believed by management to be reasonable,
are inherently subject to significant business, economic and
competitive uncertainties and contingencies. Forward-looking
information is subject to known and unknown risks, uncertainties
and other factors that may cause the actual actions, events or
results to be materially different from those expressed or implied
by such forward-looking information, including but not limited to:
impact of general business and economic conditions; the absence of
control over mining operations from which Maverix will purchase
gold and other metals or from which it will receive royalty
payments and risks related to those mining operations, including
risks related to international operations, government and
environmental regulation, delays in mine construction and
operations, actual results of mining and current exploration
activities, conclusions of economic evaluations and changes in
project parameters as plans continue to be refined; accidents,
equipment breakdowns, title matters, labor disputes or other
unanticipated difficulties or interruptions in operations; problems
inherent to the marketability of gold and other metals; the
inherent uncertainty of production and cost estimates and the
potential for unexpected costs and expenses; industry conditions,
including fluctuations in the price of the primary commodities
mined at such operations, fluctuations in foreign exchange rates
and fluctuations in interest rates; government entities
interpreting existing tax legislation or enacting new tax
legislation in a way which adversely affects Maverix; stock market
volatility; regulatory restrictions; liability, competition, the
potential impact of epidemics, pandemics and other public health
crises, including the current outbreak of the novel coronavirus
known as COVID-19 on Maverix's business, operations and financial
condition, loss of key employees, as well as those risk factors
discussed in the section entitled "Risk Factors" in Maverix's
annual information form dated March 23,
2020 available at www.sedar.com. Maverix has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers are advised not to place
undue reliance on forward-looking statements or information.
Maverix undertakes no obligation to update forward-looking
information except as required by applicable law. Such
forward-looking information represents management's best judgment
based on information currently available.
Technical and third-party information
The disclosure herein and relating to properties and operations
on the properties in which Maverix holds royalty, stream or other
interests is based on information publicly disclosed by the owners
or operators of these properties and information/data available in
the public domain as at the date hereof, and none of this
information has been independently verified by Maverix.
Specifically, as a royalty or stream holder, Maverix has limited,
if any, access to properties included in its asset portfolio.
Additionally, Maverix may from time to time receive operating
information from the owners and operators of the properties, which
it is not permitted to disclose to the public. Maverix is dependent
on, (i) the operators of the properties and their qualified persons
to provide information to Maverix, or (ii) on publicly available
information to prepare disclosure pertaining to properties and
operations on the properties on which Maverix holds royalty, stream
or other interests, and generally has limited or no ability to
independently verify such information. Although Maverix does not
have any knowledge that such information may not be accurate, there
can be no assurance that such third-party information is complete
or accurate. Some information publicly reported by operators may
relate to a larger property than the area covered by Maverix's
royalty, stream or other interest. Maverix's royalty, stream or
other interests often cover less than 100% and sometimes only a
portion of the publicly reported mineral reserves, mineral
resources and production of a property.
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SOURCE Maverix Metals Inc.