US gold and copper producer Newmont Mining has signed an agreement to divest its royalty portfolio to precious metals royalty and streaming company Maverix Metals.
Under the terms of the deal, Maverix will offer 60 million common shares, which are equivalent to an ownership interest of around 28%, $17m in cash, and warrants for an additional ten million common shares to Newmont.
The royalty portfolio being acquired by Maverix includes 54 precious metals and industrial minerals royalties.
Upon closure of the transaction, the company will have rights over royalties at TMAC Resources’ Hope Bay mine in Canada and Premier Gold’s McCoy Cove project in Nevada.
Newmont Mining Strategic Development executive vice-president Randy Engel said: “Our strategic partnership and equity interest in Maverix generates value for both companies’ shareholders.
“Maverix’s management team has a strong track record of managing and growing high-quality royalty and streaming assets in favourable mining districts on four continents.”
As part of the deal, the companies will sign a shareholder agreement which will offer Newmont a seat on Maverix’s board of directors.
Additionally, the company will have pre-emptive rights to participate in future financings to maintain its ownership stake.
The transaction will support Maverix’s portfolio through ongoing exposure from its strategic partnership with Newmont.
Currently, Maverix’s portfolio comprises 27 royalties and streams, ten of which are on producing mines.
Newmont expects the transaction to be completed in the second quarter of this year.
Founded in 1921, the mining company has operations in the US, Australia, Ghana, Peru and Suriname.