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In this edition of RCKS Charts, Keith has evaluated Excellon Resources Inc. (TSX:EXN), First Quantum Minerals Ltd. (TSX:FM), Golden Reign Resources Ltd. (TSXV:GRR), Wesdome Gold Mines Ltd. (TSX:WDO), Group Ten Metals Inc. (TSXV:PGE), Maverix Metals Inc. (TSXV:MMX) and Red Pine Exploration Inc. (TSXV:RPX). read more
Maverix Metals Inc. (TSXV:MMX) and CEF Holdings Ltd. have entered into an agreement which includes a US$20 million senior secured term loan facility and a C$6.75 million non-brokered private placement whereby CEF will obtain 5 million common shares of Maverix for C$1.35 per common share. Upon closing, expected on or before July 31, 2017, Maverix will receive the first US$10 million while the remaining amount will be received at the option of Maverix up until 2 years after the closing date. Proceeds from both transactions are to be used to grow the company’s portfolio through additional acquisitions of royalties and streams. Based on Maverix’s recent acquisitions and funding, we expect to see a strong Q2. Excluding this financing, the company’s current enterprise value (EV) is sitting at ~C$223.9 million, which implies an EV/EBITDA of ~12.8x-14.9x (based on 2017 guidance), a discount to royalty peers that trade at 18.6x (2017e EV/EBITDA). Maverix also trades at a discount on a P/NAV basis, or 1.12x vs. peers at 1.31x NAV. In our view, this valuation is not fully reflective of the company’s growth potential, both when considering its development stage royalties and ability to complete accretive acquisitions. read more
Maverix Metals Inc. (TSXV:MMX) announced Q1 2017 financial results reporting revenue of C$3.8 million, implying EBITDA of C$2.9 million, which is slightly below the run-rate suggested by the companies guidance (revenue of C$17.5-C$20.0 million, implying EBITDA of C$15.0-17.5 million). However, the company’s recent acquisitions of three cash flowing royalties (Florida Canyon and Beta Hunt in Q1, along with a 2.5% NSR on the Silvertip mine subsequent to quarter end) suggests that it should be well positioned to meet its 2017 guidance. Based on Maverix’s expanding portfolio, we expect to see a strong Q2, as royalty revenues ramp up. The company’s current enterprise value (EV) is sitting at ~C$181.5 million, which implies an EV/EBITDA of ~10.4x-12.1x (based on 2017 guidance), a discount to royalty peers that trade at 18.2x (2017e EV/EBITDA). Maverix also trades at a discount on a P/NAV basis, or 0.91x vs. peers at 1.22x NAV. In our view, this valuation is not fully reflective of the company’s growth potential, both when considering its development stage royalties and ability to do accretive acquisitions. read more
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 general and administrative expenses 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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