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Maverix takes $2 mil 2% NSR royalty on Sleeping Giant

Maverix Metals and Abcourt Mines have closed a transaction that sees Maverix take a 2% net smelter return royalty on the Geant Dormant and Dormex gold properties adjacent to its Sleeping Giant mine in Quebec, Canada, for US$2 million.
Maverix takes $2 mil 2% NSR royalty on Sleeping Giant Maverix takes $2 mil 2% NSR royalty on Sleeping Giant Maverix takes $2 mil 2% NSR royalty on Sleeping Giant Maverix takes $2 mil 2% NSR royalty on Sleeping Giant Maverix takes $2 mil 2% NSR royalty on Sleeping Giant

“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 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.