Stifel GMP has repeated a 'Buy' on Maverix Metals Inc (NYSEAMERICAN:MMX) (TSE:MMX) (FRA:7781) and lifted the target price, highlighting that the planned production growth at the Beta Hunt mine in Australia will boost the value of the company and its royalty there.
Maverix holds a 4.75% gold royalty and 1.5% nickel net smelter royalty (NSR) on Karora Resources Inc's (TSE:KRR) (OTCMKTS:KRRGF) (FRA:5RN1) Beta Hunt gold mine.
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On July 6, Maverix highlighted recent news concerning its royalty assets and noted that Karora aimed to double mining throughput at the mine to around 2 million tonnes per year (Mtpy) by the end of 2024.
At the Beta Hunt mine, planned expansion is unlocking more value out of the royalty and highlights no-cost upside within Maverix's royalty/streaming portfolio," said Stifel analysts.
The analysts now forecast the Beta Hunt royalty will provide 7,900 gold-equivalent ounces (GEOs) in 2024 and 8,100 GEOs in 2025, boosting Stifel's prior 2024 revenue GEO estimates for Maverix by almost 10% to nearly 34,000 ounces.
"Updates on advanced exploration projects highlight the potential to boost revenue GEOs in the mid-to-longer term. Over the medium term, we see potential for attributable revenue GEOs growing to between 40-50k," added the analysts.
Stifel also noted that in June this year, both Montage Gold Corp's (CVE:MAU) (OTCMKTS:MAUTF) Koné project (Maverix has a 2% NSR) and Newcore Gold Ltd's (CVE:NCAU) (OTCMKTS:NCAUF) (FRA:PI8) Enchi project (Maverix holds a 2% NSR) had completed their respective preliminary economic assessments (PEAs).
"As the two West African projects continue to be de-risked, their ongoing progress highlights that MMX's royalties on these two assets can boost mid-term attributable GEOs," said Stifel analysts.
"We estimate that once in production, Koné and Enchi can add approximately 7,000 GEOs to MMX's account. We value Koné and Enchi royalties at approximately $65M," they added.
Stifel upped the target price on Maverix to C$8.50 a share, from C$8.25 previously.
Shares in the royalty and streaming group closed on July 7 at C$6.65 each.
Contact the author at giles@proactiveinvestors.com