Under the transaction, Maverix would make an advance payment of $7.5m for the right to purchase 22.5% of the silver produced from El Mochito, and depending on certain conditions, a further $7.5m is paid for an additional 17.5% of the silver produced.
Maverix will pay 25% of the silver price, for each silver ounce delivered at the time of delivery. The Silver Stream is expected to be effective from 1 January 2019.
Maverix said that it expects average annual silver deliveries of approximately 165,000 ounces over the first three years at a silver stream rate of 22.5%.
Maverix CEO Dan O’Flaherty said: “We are very pleased to partner with the team at Ascendant and we look forward to participating with them in the long-term potential of El Mochito.
“This transaction is consistent with our stated strategy of acquiring long life precious metal streams that are immediately accretive to both our cash flow and net asset value.”
Maverix intends to fund the transaction through a combination of cash on hand and its existing credit facility. Closing of the transaction is anticipated to take place in April 2019.
In October 2018, a preliminary economic assessment (PEA) for the expansion and optimization of the El Mochito Mine was conducted, which showed a 10 year mine life and a plan to increase throughput by 27% to 2,800 per day and reduce all-in sustaining costs by 18% to $0.96/lb ZnEq produced.
As of 1 January 2018, El Mochito possessed measured and indicated resources of 10.7 million ounces of silver and inferred resources of 5.4 million ounces of silver.
El Mochito mine is located on a land package of 10,000 hectares near the town of Las Vegas in north-western Honduras. The mine is 100% owned and operated by Ascendant, which has made several improvements at the mince since it has acquired the mine in December 2016.
The mine is currently capable of producing 2,300 tons of zinc-lead-silver operation per day.
