Maverix Metals Inc (TSX:MMX)’s acquisition by Triple Flag Precious Metals (TSX:TFPM) Corp will create a robust royalty company positioned for valuation multiple re-rate from near-to-mid growth, diversification, and sector-leading dividend yield in the royalty space, according to analysts at Stifel GMP.
Maverix on Thursday announced the approximately US$600 million acquisition, which the company said would position Triple Flag as the leading emerging senior streaming and royalty company with a portfolio of 29 paying assets and 228 assets overall.
In a note to clients following the news, Stifel’s analysts reiterated their ‘Buy’ rating for the stock with a price target of C$7.75. Maverix’s Toronto-listed stock is currently trading at about C$5.20, while its US-listed shares are trading at about US$3.90.
The analysts wrote that they viewed the transaction as positive and that the combined company could see greater potential for index inclusion.
“Maverix is contributing a strong portfolio that has shown year-over-year growth, has further organic mid-term growth that we’ve previously noted can deliver more than 50,000 gold equivalent ounces (GEOs), plus additional optionality,” the analysts wrote.
“Building from the combined asset base, organic growth and no-cost optionality, the five-year average annual GEO rate is estimated at more than 140,000 ounces.”
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