Abcourt can, at any time prior to the third anniversary of the transaction, reduce the royalty rate by 0.5% for $2 million. Also, at any time prior to the sixth anniversary, it can reduce the rate by 0.5% for $4 million.
So, if it took both options, that would reduce the royalty to 1%.
"We are extremely pleased to welcome Maverix as a strategic partner in the restart of production at the Sleeping Giant Mine," Abcourt president and CEO Pascal Hamelin said.
Abcourt acquired the mine in mid-2016. It has a mill with a capacity of 700-750 tonnes of ore per day, or 250,000t per year. Measured and indicated reserve at the mine stands at 486,000t at 11.2g/t Au with measured resources of 10,900t at 12.20g/t.
National Bank of Canada Financial Markets said that while the acquisitions are on the smaller-scale and longer-dated side, they highlight Maverix's ability to grow the portfolio by focusing on similar-scale acquisition opportunities.
The company offers a "compelling valuation gap between junior/senior royalty peers", NBF said.
Maverix's share price fell 2% day on day to C$4.52 (US$3.35) on 22 September, giving the company a market capitalisation of C$666.01 million.
NBF has a share price target of C$6.50 for Maverix.
