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Thursday, June 01, 2017 Derek Macpherson

Maverix Benefits from Portfolio Growth in Q1


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Maverix Metals Inc. (TSXV:MMX) announced Q1 2017 financial results reporting revenue of C$3.8 million, implying EBITDA of C$2.9 million, which is slightly below the run-rate suggested by the companies guidance (revenue of C$17.5-C$20.0 million, implying EBITDA of C$15.0-17.5 million). However, the company’s recent acquisitions of three cash flowing royalties (Florida Canyon and Beta Hunt in Q1, along with a 2.5% NSR on the Silvertip mine subsequent to quarter end) suggests that it should be well positioned to meet its 2017 guidance. Based on Maverix’s expanding portfolio, we expect to see a strong Q2, as royalty revenues ramp up. The company’s current enterprise value (EV) is sitting at ~C$181.5 million, which implies an EV/EBITDA of ~10.4x-12.1x (based on 2017 guidance), a discount to royalty peers that trade at 18.2x (2017e EV/EBITDA). Maverix also trades at a discount on a P/NAV basis, or 0.91x vs. peers at 1.22x 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 do accretive acquisitions.



Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate
 
Red Cloud Klondike Strike Inc.
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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

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