The Silver Stream now entitles Maverix to purchase 100% of the silver produced from Northern Vertex’s operating Moss mine, until a minimum of 3.5 million ounces of silver have been purchased, after which Maverix will be entitled to purchase 50% of the life of mine production.
Transaction Highlights
Expanded Asset Base and Immediate Increase to Cash Flow: With the Moss mine recently achieving commercial production in September 2018, the Silver Stream will generate immediate revenue for Maverix; adding to its already strong and growing cash flow.
Low-Cost Operating Asset in Stable Jurisdiction: The Moss mine is on track to become a low-cost open pit mining and heap leach operation, as it continues to optimize post start up. Moss is located in northwest Arizona, a stable mining jurisdiction with a long history of mining operations.
Accretive Transaction: The Silver Stream is accretive to Maverix across all key metrics, including net asset value, cash flow, and attributable gold equivalent production per share.
Long Mine Life with Significant Exploration and Expansion Potential: In October 2017, Northern Vertex announced the results of a Preliminary Economic Assessment (“PEA”) which outlined a 10 year operation producing a total of approximately 313,000 ounces of gold and 3,000,000 ounces of silver at an AISC (all-in sustaining cost) of US$603 per gold equivalent ounce. Additionally, Maverix will be exposed to the significant regional exploration potential around the Moss mine, which is comprised of a package of mineral claims covering approximately 4,150 hectares.
Maverix CEO Dan O’Flaherty said: “Maverix is excited to partner with Northern Vertex by offering a financing solution that will allow them to significantly delever their balance sheet and keep the operating team at Moss fully focused on unlocking the mine’s long term potential.
“The addition of this cash flowing asset in a stable jurisdiction further strengthens our portfolio and meaningfully increases our attributable precious metals production per share.”
Silver Stream Terms
Maverix has entered into a definitive silver purchase agreement (the Stream Agreement) with Northern Vertex and its operating subsidiary, Golden Vertex Corp. (Golden Vertex). Pursuant to the terms of the Stream Agreement:
Maverix will pay an upfront cash payment of US$20,000,000 to Golden Vertex, the owner and operator of the Moss mine as consideration for the right to purchase, initially, 100% of the silver produced from the mine.
Once Maverix has purchased 3,500,000 ounces of silver, Maverix will have the right to purchase 50% of the life of mine silver produced from the Moss mine.
Maverix will make ongoing cash payments to Golden Vertex equal to 20% of the average price of silver for the 5 consecutive trading days prior to delivery.
The Silver Stream is effective from October 1, 2018.
The Silver Stream applies to all current and future phases of operations at the Moss mine.
The obligations of Golden Vertex under the Stream Agreement are secured against all assets of Golden Vertex in favor of Maverix, in a first ranking priority.
The transaction is expected to close in mid-December 2018, and Maverix intends to fund the upfront cash payment through current cash on hand and the Company’s revolving credit facility.
Moss Mine
The Moss mine is 100% owned by Northern Vertex and is located near Bullhead City in northwest Arizona. Moss is a 5,000 tonnes per day, open pit, heap leach, gold-silver operation, that achieved commercial production effective September 1, 2018.
Source: Company Press Release
