About Maverix Metals
Maverix Metals is a gold royalty company with a global portfolio of 125 precious metals royalties and streams, 14 of which are currently paying. With a record 32k attributable gold equivalent ounces (GEOs) sold in 2021, it increased its dividend by 25% midway through last year. In addition to its current free cash flow generation, Maverix’s extensive portfolio of royalty interests on projects in the development and exploration phases lead them to expect further organic growth.
Maverix is unique in that Newmont, Pan American Silver, and Kinross together own 54% of the company and Maverix’s management and board own approximately 8%.
Its shares trade on both the NYSE American and the TSX under the symbol “MMX”.
Founded in 2016, the initial premise of Maverix was to surface value for Pan American Silver in respect of a small collection of royalties buried amongst its portfolio of operating mines. In July of 2016, Maverix launched with a portfolio of 13 royalties and streams, 2 of which were paying.
Since its inception, Maverix has completed a total of 15 acquisitions, including 5 major royalty portfolios from senior mining companies and along with a number of bolt-on acquisitions has grown its portfolio to a total of 125 royalties and streams.
As mentioned, Maverix has 3 major strategic shareholders: Newmont (29%), Pan American Silver (18%) and Kinross Gold (8%), which has proved to be a competitive advantage for the company.
Business Model Advantages
- Cash flow through the commodity cycle.
- Diversification with significant optionality.
- Highly scalable business with low overhead costs and limited exposure to inflation.
Robust Organic Growth
With over 100+ assets in various stages of development, Maverix has significant upcoming organic growth & optionality built-in at no additional cost to Maverix. Its highly diversified portfolio has no more than 10% of annual revenue coming from any one asset. Annual attributable gold equivalent ounces are expected to grow by approximately 30,000 ounces per year from organic near-term and medium-term growth. This includes expansions, ramp-ups, and new development projects. Further growth is also expected from additions to mineral reserves and resources.
Maverix’s acquisition strategy is straightforward: accretive on a per share basis, predominantly precious metals, cash-flowing or on a clear path to production, low geopolitical risk, experienced operators with a track record of success, and of course, a technically robust underlying asset.
The Company is focused on acquisitions in the $50 - $100 million range that would be material to Maverix but would not necessarily move the needle for the larger players in the royalty space.
While traditional mining companies are battling inflation and the current challenging market conditions, Maverix is actively evaluating an increased number of opportunities to acquire additional royalties and streams. Maverix is well positioned financially with over $160 million available to deploy to continue to grow its portfolio.
Key Royalty Portfolio Milestones
Many of the company’s counterparties have recently been advancing ramp-ups, expansions, exploration, and economic studies with no further cost to Maverix. One to highlight is the Camino Rojo mine, where Maverix has a 2% NSR royalty, which declared commercial production in April 2022.
Maverix also has royalties on a trio of notable gold projects expected to come online in the next few years. The first is the expansion that is underway at Karora Resources’ Beta Hunt mine in Australia which will add over 10% to Maverix’s revenue by 2024. The next is Agnico Eagle’s restart and potential expansion of its Hope Bay mine in Canada in 2025 which could see production increase to two to three times the original capacity. Agnico’s mine expansion will add 10% to Maverix’s current revenue base. The third one is the 5% royalty on the Gemfield project in Nevada owned by Centerra Gold which is expected to add 20% to Maverix’s revenue starting in 2026.
Economic Studies Being Advanced and Exploration Upside
Maverix has a 2% NSR royalty on the Koné project. A recently completed feasibility study outlines a 15-year mine life with average gold production of 207,000 ounces per year.
Maverix has a 1% NSR royalty on the Cerro Blanco project. A recently completed feasibility study outlines an initial 14-year mine life with average gold production of 197,000 ounces per year.
Maverix has a 2% NSR royalty on the South Railroad project. A recently completed feasibility study outlines a 10.5-year mine life average gold production of 124,000 ounces per year.
Maverix has a 2.5% NSR on the DeLamar project. A recently completed pre-feasibility study outlines a 16-year mine life with average gold equivalent production of 163,000 ounces per year over the first 8 years.
Furthermore, significant exploration is ongoing at many of the mines and projects where Maverix has an interest. Of Maverix’s 125 royalties and streams, 52 of the properties have defined resources; in aggregate, attributable measured and indicated resources total 1.5 million ounces of gold equivalent with an additional 0.6 million attributable gold equivalent ounces of resources in the inferred category.
Maverix’s success of being one of the first movers into the smaller end of the royalty sector has attracted many new entrants into the space. Increased competition for limited opportunities has pushed several of the larger royalty companies to also begin looking at some of the smaller opportunities which has started to put pricing pressure on a number of the recent royalty transactions and there has been a decline in transaction returns.
There is ongoing uncertainty related to Maverix’s Omolon royalty and they are excluding its GEOs from its guidance for the second half of 2022. International sanctions on Russia continue to have a material impact on sales, procurement, and logistics despite the Omolon mine achieving production targets for the second quarter.
Steps to Unlock Value
- Organic growth from its current portfolio.
- Accretive royalty and stream acquisitions.
- Qualify for indices/ETFs.
- Expand shareholder base.
Maverix has created a simple story for investors. They are a pure-play royalty company without any direct mining interests. They are focused on precious metals without the complicated structures or exposure to mine operating costs which often makes the company difficult to value for investors.
The company’s growth profile since inception highlights one of the major benefits of their business model, the scalability of the royalty model, as they rapidly grew their asset portfolio with a small team. Today, Maverix is led by an experienced and knowledgeable management team of only 9 employees and sits at a market cap of US$600 million.