Newmont Mining has entered into an agreement to sell its royalty portfolio to Maverix Metals, an emerging precious metals royalty and streaming company. In connection with the transaction, Newmont will receive 60 million Maverix common shares, representing an ownership interest of approximately 28%; $17 million in cash; and warrants for an additional 10 million common shares.
Newmont’s royalty portfolio includes 54 precious metals and industrial minerals royalties, including royalties at TMAC Resources’ Hope Bay mine in Canada and Premier Gold’s McCoy Cove project in Nevada.
“Our strategic partnership and equity interest in Maverix generates value for both companies’ shareholders,” said Randy Engel, Newmont’s executive vice president, strategic development. “Maverix’s management team has a strong track record of managing and growing high-quality royalty and streaming assets in favorable mining districts on four continents.”
Newmont will also gain a seat on the Maverix board and preemptive rights to participate in future financings to maintain the company’s ownership stake. Newmont’s strategic partnership will provide ongoing exposure to Maverix’s growing portfolio, which currently includes 27 high-quality royalties and streams, 10 of which are on producing mines. The transaction is expected to occur in the second quarter of 2018.
“This transaction is another historic growth step for Maverix,” said Dan O’Flaherty, president and CEO of Maverix. “Newmont is the third globally recognized mining company to become a shareholder of Maverix, along with Pan American Silver and Gold Fields. This transaction further validates our business model and strategy, and we will judiciously steward our expanded asset base as we continue to look for new opportunities to grow our portfolio.”
Maverix was founded in 2016 by Geoff Burns and Dan O’Flaherty with the sole purpose of becoming a successful mining royalty and streaming company. In July 2016, Maverix acquired a package of 13 royalties and precious metal streams from Pan American Silver and began trading on the TSX Venture Exchange shortly after. Adding a number of bolt on growth acquisitions in 2017, Maverix has acquired a portfolio of 26 royalties and streams since its inception. The company provides upfront payments to mine operators in need of capital in return for a percentage of the future revenue generated from the mine (a royalty), or the right to either purchase all, or a fixed percentage of, future precious metal production for a pre-determined price (a stream). These royalty and streaming agreements provide exposure to precious metals price appreciation, fixed operating costs and exploration and expansion upside without the associated capital, operating and environmental costs.