- A pure gold play royalty investment
- A global portfolio and experienced management
- Low overheads and track record of growth
What Maverix Metals does:
Maverix Metals Inc (CVE:MMX) is a rapidly growing gold royalty and streaming firm with high margins and growing free cash flow.
In return for making an upfront payment, Maverix receives a royalty on the underlying precious metal sold by an operator, or in the case of a precious metal stream, the right to purchase an agreed-upon amount of gold, silver or other precious metal, at a significant discount to the spot commodity price.
Such agreements provide Maverix, and its shareholders, with exposure to precious metals price rises and the exploration upside of the mine or project without any additional capital outlay, while also fixing the ongoing costs of acquiring precious metals in the case of a stream.
Since being founded in 2016 by chairman Geoff Burns and CEO Daniel O’Flaherty, Vancouver-based Maverix - which has just nine employees - has completed 10 transactions to acquire 105 royalties and streams, 13 of which are paying. Its assets lie throughout Australia and the Americas.
How is it doing:
For its second quarter to June 30, 2020, Maverix reported strong numbers with record revenue of US$11 million, up 57% on 2Q 2019, which it said demonstrated the strength and diversity of its asset portfolio despite some impact due to the coronavirus pandemic.
Amid a period of rising gold prices, the firm's net income for the three months jumped to nearly US$3.1 million from the US$610,000 it recorded during the same period a year earlier. The firm also saw record cash flow from operating activities, excluding changes in non-cash working capital, of US$8.5 million and cash operating margins of US$1,572 per ounce.
Maverix received US$15.6 million in cash payments during the quarter after Pan American Silver Corp (NASDAQ:PAAS), a significant shareholder with around a 20% stake, exercised its warrants in the company, increasing Maverix's liquidity. Maverix also said it would pay a dividend of US$0.01 per share by September 15.
The group's second-quarter financials built on robust first quarte results, which saw operating cashflow for the three months to March 31, 2020, at US$4.8 million compared to US$2.1 million in the same period a year earlier, and a similar cash dividend to shareholders of US$0.01 per share.
- Further acquisitions of royalties/streams
- Ongoing gold price advances
What the boss says:
Following the group's first-quarter numbers, revealed in June, Maverix president Ryan McIntyre spoke about the royalty company's strong performance.
"With 13 paying assets now, it's quite a broad set of assets, doing quite well, and we look to be generating pretty good cashflow going forward here," he said.
McIntyre added that all of its paying assets had continued during the coronavirus pandemic, except for two in Mexico due to regulations there.