All amounts are in U.S. dollars unless otherwise indicated.
VANCOUVER, BC, Oct. 18, 2021 /PRNewswire/ - Maverix Metals Inc. (the "Company" or "Maverix") (NYSE American: MMX) (TSX: MMX) is pleased to announce it has reached an agreement with Omolon Gold Mining Company LLC, a wholly owned subsidiary of Polymetal International plc ("Polymetal") to increase and expand Maverix's royalty interest in the Omolon hub operation located in Magadan Region, Russia.
Dan O'Flaherty, CEO of Maverix, commented, "Maverix acquired its original 2% partial royalty interest in Omolon through the acquisition of a royalty portfolio from Kinross in 2019 and we are pleased to increase this to 2.5% and expand the coverage across all Omolon hub licenses, which cover over 60,000 hectares. Omolon has a long and continuous history of gold and silver production and we look forward to our strengthened relationship with Polymetal as they continue to operate and extend the mine life at Omolon. This transaction is expected to increase Omolon's annual contribution to Maverix's attributable gold equivalent ounces from approximately 2,000 ounces to approximately 5,000 ounces. Additionally, the expanded area of royalty coverage provides Maverix with exposure to several new promising projects and exceptional exploration potential at Omolon."
Transaction Summary
Maverix will make a cash payment equal to $23.5 million to increase its effective interest to a 2.5% gross revenue royalty and expand the royalty coverage to include all 13 licenses that currently comprise the Omolon hub and potentially an additional three that are in the application phase. Prior to this transaction, Maverix's 2% gross revenue royalty covered two licenses (Tsokol Kubaka and Birkachan).
Upon sales of one million gold equivalent ounces at Omolon, post completion of the transaction, the effective interest will decrease from 2.5% to 2.0%, and upon sales of 1.2 million gold equivalent ounces, Maverix will make an additional $1.5 million cash payment.
The purchase price will be funded from Maverix's existing cash on hand.
Omolon
The Omolon hub has produced over 4 million ounces of gold and 21 million ounces of silver since 1996. The operation is comprised of the Kubaka processing plant, a mix of open pit and underground mines as well as several near-mine development projects with high-grade open-pittable reserves and resources and significant longer-term exploration potential. All parts of the hub are centred around the 850,000 tonne per annum Kubaka plant, which serves as the processing facility for the operating mines in the area and future near-mine feedstock. In addition, Polymetal operates a one million tonne per annum seasonal heap leaching circuit at the Birkachan mine. Polymetal is currently commissioning a new 2.5 MWh solar power plant at Omolon and is expected to complete the construction of a dry tailings storage facility by the end of 2021.
In 2020, Omolon produced 210,000 gold equivalent ounces at an all-in sustaining cost of $773 per gold equivalent ounce.(1)
As of January 1, 2021, Omolon has proven and probable reserves of 4.2 million tonnes at 4.3 grams per tonne ("g/t") gold and 13 g/t silver containing approximately 0.6 million ounces of gold and 1.8 million ounces of silver. In addition to the mineral reserves, Omolon has measured and indicated resources of 1.9 million tonnes at 5.4 g/t gold and 124 g/t silver containing approximately 0.3 million ounces of gold and 7.6 million ounces of silver and inferred resources of 0.3 million tonnes at 11.5 g/t gold and 117 g/t silver containing approximately 0.1 million ounces of gold and 1.1 million ounces of silver.(1)
For more information on Omolon please visit polymetalinternational.com.
(1) Polymetal 2020 Annual Report.
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.