Maverix Metals Inc (TSX:MMX) said it has acquired a package of three royalties on gold projects in Nevada from an indirect, wholly-owned subsidiary of Waterton Precious Metals Fund II Cayman LP for a $5 million cash payment.
"This royalty package fits Maverix's strategy perfectly,” said Maverix CEO Dan O'Flaherty in a statement.
“The properties have excellent exploration and development potential for gold in a great jurisdiction while, uniquely, providing immediate cash flow via advance royalty payments while the projects continue to be advanced."
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The company said the three assets are Lewis, which is at resource stage, as well as Dixie Creek and Railroad, both of which are at exploration stage.
Lewis
A 3.5% to 4% net smelter return (NSR) royalty on the Lewis property owned by Gold Standard Ventures Corp (TSX-V:GSV). Also, there’s an advanced royalty payment of $97,000 per year in 2021, increasing each year in line with the Consumer Price Index
The royalty ground covers 367 claims immediately adjacent to the high-quality Phoenix gold mine operated by Nevada Gold Mines (NGM), which is a joint venture between Barrick Gold Corporation and Newmont Corporation.
There is an existing resource on the property identified as the Virgin deposit -- which has an inferred mineral resource of 205,827 contained ounces of gold and 3,537,268 contained ounces of silver in 7.74 million tonnes at a grade of 0.83 grams per tonne (g/t) of gold and at a grade of 14.22 g/t of silver. Gold Standard believes that the Lewis inferred mineral resource estimate at the Virgin deposit is a continuation of the Phoenix-Fortitude mineralization currently being mined by NGM in the Phoenix mine.
In 2021, the Phoenix mine produced approximately 177,000 ounces (oz) of gold at an all-in sustaining cost of $533 per oz. Open-pit laybacks for the Phoenix mine's approved environmental impact statement cross onto the Lewis property and may include mining portions of the inferred mineral resource.
Lewis also has several known mineralized zones and has the potential for new gold and silver discoveries on the 2,161-hectare land package.
Dixie Creek
A 4% royalty on 105 claims, covering approximately 846 hectares, including the Dixie Creek prospect, which is currently leased by Gold Standard and form part of the South Railroad project land package. Also, there’s an advanced royalty payment of $90,000 per year until 2023, increasing to $100,000 per year in 2024.
On February 23, 2022, Gold Standard released a feasibility study on the South Railroad open pit heap leach gold project that showed a NPV5% of $315 million and an IRR of 44% using a gold price of $1,650 per oz. Annual production is expected to be 152,000 oz of gold per year over the first four years and approximately 100,000 oz of gold per year over its projected 10.5-year mine life.
The Dixie Creek claims have good exploration potential given they are located approximately 2 kilometres (km) south of the Dark Star and Pinion deposits. The historic drilling on the claims showed the mineralization intersected at Dixie Creek is hosted in rocks that are similar in nature to the host rocks for the Dark Star gold mineralization (the key deposit for the South Railroad project).
Railroad
A 4% royalty on two claims near the Railroad prospect area, currently leased by Gold Standard, approximately 7 km north of the Pinion deposit on Gold Standard's South Railroad project. Also, there’s an advanced royalty payment of $75,000 per year from 2022 to 2031, increasing to $100,000 per year in 2032
Contact the author: patrick@proactiveinvestors.com
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