Newmont sells its royalty portfolio to Maverix Metals for $17 million, stake in the junior

Newmont Mining (NYSE:NEM) has agreed to sell its full royalty portfolio to Canada’s Maverix Metals (TSX-V: MMX), a precious metals royalty and streaming junior, in a transaction that gives the US miner $17 million cash and a 28%-stake in the Vancouver-based company.

The Greenwood Village, Colorado-based miner, the only gold company that forms part of the S&P500 index, has a portfolio of 54 precious metals and industrial minerals royalties, located in 11 different countries. It includes royalties from major assets, such as Barrick's Hemlo gold mine, TMAC Resources’ Hope Bay mine in Canada and Premier Gold’s McCoy Cove project in Nevada.

Newmont's portfolio consists of 54 precious metals and industrial minerals royalties, located in 11 different countries.

“Our strategic partnership and equity interest in Maverix generates value for both companies’ shareholders,” Randy Engel, Newmont’s Executive Vice President, Strategic Development, said in the statement. “Maverix’s management team has a strong track record of managing and growing high-quality royalty and streaming assets in favorable mining districts on four continents.”

Upon completion of the sale, which triples the number of royalties in Maverix’s portfolio, Newmont will have 60 million common shares in the junior, representing an ownership interest about 28%, as well as warrants for an additional 10 million common shares. The latter will be exercisable for five years from the date the Transaction closes at a price of $1.64 (Cdn $2.10) per common share, Maverix Metals said in a separate statement.

Newmont is the third major miner to become a shareholder of Maverix. The other two are Pan American Silver and Gold Fields.

Over the past three years, Newmont has built new mines at Merian (in Suriname) and Long Canyon (in the US), and delivered profitable expansions at Tanami and Cripple Creek & Victor, also in the US.

Last year alone, it increased its exploration and advanced projects investments by about 25%, with roughly two-thirds of that amount going to fund more brownfield and greenfield exploration.