Maverix Announces Solid Second Quarter 2021 Results and Declares Quarterly Dividend
All amounts are in U.S. dollars unless otherwise indicated.
VANCOUVER, BC, Aug. 12, 2021 /CNW/ - Maverix Metals Inc. ("Maverix" or the "Company") (NYSE American: MMX) (TSX: MMX) is pleased to announce operating and financial results for the second quarter ended June 30, 2021.
Maverix Metals Inc. Logo (CNW Group/Maverix Metals Inc.)
Second Quarter 2021 Highlights
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Revenue of $14.3 million;
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Gold equivalent ounces ("GEOs") sold of 7,8801;
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Average cash cost per GEO of $197, resulting in a cash operating margin of 89% or $1,619 per GEO1;
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Cash flow from operating activities, excluding changes in non-cash working capital, of $9.3 million1;
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Net income of $3.7 million;
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Acquired a portfolio of six precious metals royalties from Pan American Silver Corp. ("Pan American") for total consideration of $9.75 million;
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Karora Resources Inc. ("Karora") announced a growth plan that includes a significant expansion of its Beta Hunt gold mine where Maverix holds a 4.75% gold royalty and 1.5% nickel royalty;
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Montage Gold Corp. ("Montage") announced the results of a preliminary economic assessment ("PEA") for its Kon project, where Maverix has a 2% royalty, that outlined average annual production of 205,000 ounces of gold per year over a 14.7 year mine life; and
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Coeur Mining, Inc. ("Coeur") provided an exploration update on its Silvertip mine, where Maverix has a 2.5% royalty, and subsequently announced that it is increasing its investment at Silvertip during the second half of 2021 to complete several surface projects to support a potential restart of active mining and processing activities in 2023.
Dan O'Flaherty, CEO of Maverix, commented, "Maverix had a strong second quarter highlighted by the acquisition of a precious metals royalty portfolio from Pan American, which further strengthens our asset base to a total of 121 precious metals royalties and streams. We are well on track to achieve our 2021 guidance of 27,000 to 30,000 GEOs and look forward to continued growth as we remain debt free with the entire $120 million available under our credit facility, while also holding approximately $50 million in cash at the end of the quarter. A number of assets where we hold a royalty interest have recently had significant positive developments and we are confident that we will continue to expand through organic growth and new acquisitions that will increase shareholder value."
Summary of Quarterly Results
| Quarter Ended (in thousands of USD, except for GEOs and per share amounts) | | June 30, 2021 | | June 30, 2020 |
| | | | | |
| Statement of Income and Comprehensive Income | | | | |
| Royalty revenue | $ | 7,999 | $ | 7,784 |
| Sales | $ | 6,310 | $ | 3,187 |
| Total revenue | $ | 14,309 | $ | 10,971 |
| Cash flow from operating activities | $ | 8,813 | $ | 6,616 |
| Net income | $ | 3,708 | $ | 3,076 |
| Basic earnings per share | $ | 0.03 | $ | 0.03 |
| Diluted earnings per share | $ | 0.03 | $ | 0.02 |
| Dividends declared per share | $ | 0.0125 | $ | 0.01 |
| | | | | |
| Non-IFRS and Other Measures 1 | | | | |
| Adjusted net income | $ | 3,739 | $ | 3,010 |
| Adjusted basic earnings per share | $ | 0.03 | $ | 0.02 |
| GEOs sold | | 7,880 | | 6,412 |
| Average realized gold price per GEO | $ | 1,816 | $ | 1,711 |
| Average cash cost per GEO | $ | 197 | $ | 139 |
| Cash flow from operating activities, excluding changes in non-cash working capital | $ | 9,313 | $ | 8,479 |
For complete details please refer to the Condensed Consolidated Interim Financial Statements and associated Management Discussion and Analysis for the quarter ended June 30, 2021, available on SEDAR (www.sedar.com), EDGAR (www.sec.gov) or on Maverix's website (www.maverixmetals.com).
To listen to Maverix's President, Ryan McIntyre, discuss the Q2 results please use this link: MMX Q2 2021 Results
Asset Portfolio Updates
Beta Hunt (4.75% Gold Royalty and 1.5% Nickel NSR)
On June 28, 2021, Karora announced a three year organic production growth plan which includes a significant expansion of its Beta Hunt gold mine in Western Australia. The expansion includes adding a second decline and an expanded trucking fleet to increase mining throughput which is expected to approximately double the production capacity of the mine from the current rate of approximately 75,000 – 85,000 tonnes per month ("tpm") to 160,000 – 170,000 tpm by the end of 2024. For reference, the Beta Hunt mine produced 66,479 ounces of gold in 2020. Further production upside potential includes the high-grade Larkin Zone, where an initial mineral resource is expected to be included in Karora's 2021 mineral resource and reserve update, and the newly discovered high-grade 30C and 50C nickel troughs. In addition, drilling underground is active on four exploration targets – A Zone North, Western Flanks North, Fletcher and the 50C nickel trough, with all four targets representing potential extensions to existing mineral resources or known mineralization.
For more information, please refer to karoraresources.com and see the news release dated June 28, 2021.
Kon (2% NSR)
On May 25, 2021, Montage announced the results of a PEA for its Kon gold project in Cte d'Ivoire. The PEA outlined an 11 million tonne per annum operation with average annual production of 205,000 ounces of gold per year over a 14.7 year mine life generating an after-tax net present value at a 5% discount rate of $652 million and a 31% IRR at a $1,600 per ounce gold price. Montage is currently moving forward with a feasibility study which they expect to deliver by the end of 2021. In addition, Montage is advancing permitting and project financing discussions in parallel with the feasibility study.
For more information, please refer to montagegoldcorp.com and see the news release dated May 25, 2021.
Silvertip (2.5% NSR)
On July 28, 2021, Coeur announced that it is increasing its investment at Silvertip during the second half of 2021 to complete several surface projects to support a potential restart of active mining and processing activities in 2023. Capital expenditures are expected to total $75 – $90 million in 2021 (increased from $35 – $45 million). Coeur is currently working with SNC-Lavalin to complete engineering for the expansion, better define the estimated capital investment and develop a new mine plan based on continued successful drilling results. Coeur plans to release an updated mine plan and economic analysis for Silvertip in early 2022 and file a new technical report that will incorporate an updated reserve and resource as well as an optimized capital estimate reflecting a 1,750 tonnes per day flowsheet.
For more information, please refer to coeur.com and see the news release dated July 28, 2021.
Enchi (2% NSR)
On June 8, 2021, Newcore Gold Ltd. ("Newcore") announced an updated PEA for its Enchi gold project in Ghana. The PEA outlined an open pit, heap leach operation producing an average of approximately 90,000 ounces of gold per year over an 11 year mine life generating an after-tax net present value at a 5% discount rate of $212 million and a 42% IRR at a $1,650 per ounce gold price. Exploration and drilling activities continue as part of Newcore's current 66,000 metre drill program, which includes testing a series of highly prospective targets directed at extending the existing mineral resources along strike and down dip and further drilling of advanced gold targets across the 216 square kilometre property.
For more information, please refer to newcoregold.com and see the news release dated June 8, 2021.
Cerro Blanco (1% NSR)
On July 19, 2021, Bluestone Resources Inc. ("Bluestone") announced an increase to the mineral resources at its Cerro Blanco project. Measured and indicated resources increased to 63.5 million tonnes at 1.5 grams per tonne ("g/t") gold and 6.6 g/t silver containing approximately 3.1 million ounces of gold and 13.4 million ounces of silver. Bluestone is currently working on a feasibility study with an optimized mine plan that is expected to be completed by the first quarter of 2022.
For more information, please refer to bluestoneresources.ca and see the news release dated July 19, 2021.
Dividend
The quarterly cash dividend of $0.0125 per common share will be paid on or about September 15, 2021 to shareholders of record as of the close of business on August 31, 2021.
This dividend is designated as an "eligible dividend" for the purposes of the Income Tax Act (Canada). Dividends paid by Maverix to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes. The declaration, timing, amount and payment of future dividends remains at the discretion of Maverix's Board of Directors.
| 1 Maverix has included certain performance measures in this news release that do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") including adjusted net income, total GEOs sold, average realized gold price per GEO, average cash cost per GEO, cash operating margin and cash flow from operating activities, excluding changes in non-cash working capital. Adjusted net income is calculated by excluding the effects of other income/expenses, impairment charges, gains/(losses) on sale or amendments of royalty and streams and unusual non-recurring items. The Company believes that adjusted net income is a useful measure of the Company's performance because it adjusts for items which may not relate to or have a disproportionate effect on the period in which they are recognized, impact the comparability of our core operating results from period to period, are not always reflective of the underlying operating performance of our business and/or are not necessarily indicative of future operating results. The Company's royalty revenue and silver sales are converted to a GEO basis by dividing the royalty revenue and silver sales for a period by the average gold price based on the LBMA Gold Price PM Fix per ounce for the same respective period. These GEOs when combined with the gold ounces sold from the Company's gold streams equal total GEOs sold. Average realized gold price per GEO is calculated by dividing the total revenue by the GEOs sold. Average cash cost per GEO is calculated by dividing the total cost of sales, less depletion, by the GEOs sold. In the precious metals mining industry, these are common performance measures but do not have any standardized meaning. Cash operating margin is calculated by subtracting the average cash cost per GEO sold from the average realized gold price per GEO sold. The Company presents cash operating margin as it believes that certain investors use this information to evaluate the Company's performance in comparison to other companies in the precious metal royalty and streaming sector who present results on a similar basis. The Company has also used the non-IFRS measure of operating cash flows excluding changes in non-cash working capital. This measure is calculated by adding back the decrease or subtracting the increase in changes in non-cash working capital to or from cash provided by (used in) operating activities. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate these non-IFRS measures differently. The 2021 forecast herein assumes a gold price of $1,700 per ounce and a silver price of $21 per ounce. The forecast was derived using information that is available in the public domain as at the date hereof, which included guidance and estimates prepared and issued by management of the operators of the mining operations in which Maverix holds an interest. The forecast is sensitive to the performance and operating status of the underlying mines. None of the information has been independently verified by Maverix and may be subject to uncertainty. There can be no assurance that such information is complete or accurate. Maverix's business, operations, financial condition, and financial outlook could be materially adversely affected by the continued impact of the COVID-19 global health pandemic. At this time, Maverix cannot reasonably estimate the duration of any potential business disruptions, impact to underlying operations that Maverix holds an interest in or any related financial impact that is related to or caused by COVID-19. |
Qualified Person
Brendan Pidcock, P.Eng., is Vice President, Technical Services for Maverix, and a qualified person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has reviewed and approved the scientific and technical disclosure contained in this news release.
About Maverix
Maverix is a gold-focused royalty and streaming company with a globally diversified portfolio of over 100 assets. Maverix's mission is to increase per share value by acquiring precious metals royalties and streams. Its shares trade on both the NYSE American and the TSX under the symbol "MMX".
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