Maverix Metals (TSXV: MMX; US-OTC: MACIF) has acquired a 1.5% net smelter returns royalty on the McCoy-Cove gold project in Nevada that was originally supposed to be a part of the 50-royalty portfolio it acquired from Newmont Mining (NYSE: NEM) in early July.
Premier Gold Mines (TSX: PG; US-OTC: PIRGF), owner and operator of the McCoy-Cove property, had initially decided to exercise a right of first refusal on the royalty worth US$12 million, but later reversed its decision. Newmont subsequently transferred the royalty to Maverix.
McCoy-Cove is subject to an option agreement whereby Barrick can earn a 60% interest by spending US$6 million on exploration by June 30, 2019, plus an optional US$16.5 million in exploration by June 30, 2022. Barrick would become the operator if it agreed to the second payment.
McCoy has seen limited modern exploration. Echo Bay Mines mined it from 1987 to 2001, producing 2.6 million oz. gold and 100 million oz. silver.
Cove, however, contains 900,000 indicated tonnes grading 11.2 grams gold per tonne for 342,000 oz. gold and 3.7 million inferred tonnes at 11.2 grams gold for 1.3 million oz. gold as of March 2018.
Maverix recorded a record $8.5 million in revenue in 2018’s second quarter. The company expects to produce between 18,000 and 19,000 gold equivalent ounces in 2018, as much as 60% more than in 2018. It expects to generate as much as $8 million in cash flow in 2018 from the recently acquired Newmont gold portfolio.
Shares of Maverix are currently trading at $1.67 with a 52-week range of $1.33 to $2.35. The company has a $356 million market capitalization.
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