VANCOUVER, British Columbia, Nov. 22, 2017 (GLOBE NEWSWIRE) -- Maverix Metals Inc. (the “Company” or “Maverix”) (TSX-V:MMX) is pleased to announce that it has entered into a binding Royalty Purchase Agreement dated November 22, 2017 pursuant to which Maverix will acquire a 2.0% net smelter return royalty on Endeavour Mining Corporation’s (“Endeavour”) interest in the Karma gold mine (the “Royalty”) for consideration of US$20,000,000 in cash (the “Transaction”).
The Karma gold mine (“Karma”) is located in north-central Burkina Faso, near the city of Ouahigouya and is 90% owned and operated by Endeavour. The mine and surrounding tenements were acquired by Endeavour in April 2016 and commenced commercial production in October 2016. According to production guidance provided by Endeavour, Karma is expected to produce 100,000 to 110,000 ounces of gold in 2017.
Transaction Highlights
- Adds another cash flowing royalty, with immediate additional leverage to gold;
- Increases Maverix’s attributable gold equivalent production per share;
- Accretive to Maverix’s net asset value and cash flow per share;
- Adds a long life asset with substantial mineral inventory and exploration potential; and
- Adds a strong operating partner.
Dan O’Flaherty, President and CEO of Maverix commented, “Maverix is pleased to add another producing gold royalty on a long-life mine with substantial exploration upside. Endeavour is a proven operator and we look forward to continued success at Karma. The acquisition complements our existing portfolio, will meaningfully increase our cash flow, and will further enhance our strong growth profile in 2018 and beyond.”
Karma Mine (1)
Karma is a shallow open pit, heap leach operation with a moderate strip ratio, making it a low cost operation. The property consists of two exploitation and six contiguous exploration permits totaling more than 856 square kilometers. Karma has achieved a run-rate of approximately 115,000 ounces of gold annually. In February 2017, Endeavour announced that the mine life at Karma had been extended to over ten years. On November 13, 2017, Endeavour announced that drilling has confirmed mineralization at the Yabongso target and has also discovered a parallel oxide structure east of the North Kao deposit, both of which are expected to be delineated into resources in Q1-2018 and add further potential to extend Karma’s mine life.
Karma Mineral Reserves and Resources as at December 31, 2016 (1):
| Categories | Tonnes (Mt) |
Au (g/t) |
Contained Gold (koz) |
|
| Proven Reserves | 0.4 | 0.59 | 8 | |
| Probable Reserves | 37.4 | 0.92 | 1,109 | |
| Total Reserves | 37.9 | 0.92 | 1,117 | |
| Measured Resources | 0.4 | 0.59 | 8 | |
| Indicated Resources | 83.8 | 1.10 | 2,973 | |
| Total Measured & Indicated Resources | 84.3 | 1.10 | 2,981 | |
| Inferred Resources | 19.3 | 1.27 | 791 |
| Notes to the Mineral Reserves and Resources Table: | ||
| i. | Source: www.endeavourmining.com/our-portfolio/reserves-and-resources/default.aspx | |
| ii. | Mineral reserves and resources shown on a 100% basis. | |
| iii. | Mineral resources are shown inclusive of mineral reserves. | |
| iv. | Rounding may result in minor discrepancies in totals. | |
(1) For more information on the Karma Mine, please visit the Endeavour Mining Corporation website at www.endeavourmining.com, and refer to the press releases dated February 23, 2017 and November 13, 2017.
Terms of the Transaction
Closing of the Transaction is expected to occur before the end of the year (the “Closing Date”). Closing of the Transaction is conditional upon Maverix, the seller, and the Endeavour subsidiaries that own the Karma gold mine entering into an assignment agreement on or before the Closing Date.
Maverix will use current cash on hand to fund the payment of the consideration for the Transaction.
Qualified Person
Doug Ward, B.Sc., Mining Engineering, MMSA, Vice President Technical Services for the Company, and a “Qualified Person” under NI 43-101 has reviewed and approved the scientific and technical disclosure contained in this press release.
About Maverix:
Maverix Metals Inc. is a gold royalty and streaming company. Maverix’s primary purpose is to acquire and hold predominantly precious metals streams and royalties, and in so doing provide significant leverage to gold and silver prices for its shareholders. Maverix’s mission is to increase underlying per share value by adding high-quality streams and royalties that offer robust returns to Maverix’s portfolio.
