Maverix Metals Inc. (TSXV:MMX) and CEF Holdings Ltd. have entered into an agreement which includes a US$20 million senior secured term loan facility
and a C$6.75 million non-brokered private placement whereby CEF will obtain 5 million common shares of Maverix for C$1.35 per common share. Upon closing,
expected on or before July 31, 2017, Maverix will receive the first US$10 million while the remaining amount will be received at the option of Maverix
up until 2 years after the closing date. Proceeds from both transactions are to be used to grow the company’s portfolio through additional acquisitions
of royalties and streams. Based on Maverix’s recent acquisitions and funding, we expect to see a strong Q2. Excluding this financing, the company’s
current enterprise value (EV) is sitting at ~C$223.9 million, which implies an EV/EBITDA of ~12.8x-14.9x (based on 2017 guidance), a discount to royalty
peers that trade at 18.6x (2017e EV/EBITDA). Maverix also trades at a discount on a P/NAV basis, or 1.12x vs. peers at 1.31x NAV. In our view, this
valuation is not fully reflective of the company’s growth potential, both when considering its development stage royalties and ability to complete
Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate
Red Cloud Klondike Strike Inc.
105 King Street East, 2nd Floor
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Priced as of prior trading day's market close, EST (unless otherwise noted).
All values in USD unless otherwise noted.
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Company Specific Disclosure Details
Maverix Metals Inc - TSXV:MMX - 2,4
Pan American Silver Corp - TSX:PAA, NasdaqGS:PAAS - None
Gold Fields Ltd - JSE:GFI - None
Silvercorp Metals Inc. - TSX:SVM - None
CEF Holdings Ltd. - CEF - None
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