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Maverix Metals Inc. (TSXV:MMX) provided guidance for its attributable gold production in 2017, the company’s first full year of operations. The company is guiding for net royalty revenues of C$17.5-20.0 million, based on a US$1,225/oz Au price and annual production of 13.4-15.0k oz AuEq. The majority of the revenue, or 93%, is driven by gold sales with the balance coming from silver (5%) and nickel (2%) sales. Based on working capital expected to amount to 13-14% of net revenues and the company’s current cash position, we believe the company is able to acquire additional small to medium sized streams and royalties. Although Maverix has growth potential in our view, we note that Maverix currently trades at a discount to peers on a P/NAV and 2017e EV/EBITDA basis. read more
Yesterday, Maverix Metals Inc. (TSXV:MMX) announced it has entered into an agreement to acquire a 3.25% NSR on Rye Patch Gold Corp’s (TSXV:RPM) Florida Canyon gold mine and an additional 1.5% gold NSR and 0.5% nickel NSR on RNC Mineral’s (TSXV:RNX) Beta Hunt mine, increasing its portfolio to 27 streams and royalties. We expect the transaction to add ~20-25% to Maverix’s current attributable production profile of 12k AuEq oz per year. Consideration for the proposed transaction is US$5.0 million cash and ~8.5 million Maverix shares, implying a total value of C$19.6 million based on Maverix’ close price on January 31, 2017 of C$1.54/sh. We view the transaction positively, as it should meaningfully add to Maverix’s near-term cash flow. We note that Maverix trades at a slight premium to peers on a NAVPS basis and significant premium on 2017e EV/CF; we believe this to be reflective of this new entrant’s growth potential both from its development stage royalties and ability to do accretive acquisitions like the one announced yesterday. read more
Last week, Red Cloud Klondike Strike Inc. (RCKS) hosted another installment as part of our Drilling Deeper lunch series, this time featuring three companies that own and are unlocking royalty value in unique ways. The presenting companies were AuRico Metals Inc (TSX:AMI), Marlin Gold Mining Ltd (TSXV:MLN) and Maverix Metals Inc (TSXV:MMX). We believe all three presenters have the potential to unlock value for investors through each company’s royalty and streaming assets. read more
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