The definitive agreement aims to position Triple Flag as a leading emerging senior streaming and royalty company by combining two complementary portfolios of predominantly gold and silver streams and royalties.
Maverix shares rallied on the news, rising 9.6% or 46 cents to $5.23 on volume of 240,310. The shares trade in a 52-week range of $6.88 and $4.12.
Triple Flag shares were almost unchanged, rising 0.338% or $0.05 to $14.85. The shares are currently trading in a 52-week range of $20.83 and $11.72.
By combining the two companies, Triple Flag aims to:
- Deliver increased scale and enhanced diversification, with 29 paying assets and 228 assets overall.
- Feature gold and silver assets in good mining jurisdictions by net asset value, with 93% of the portfolio located in precious metals and 82% located in the Americas and Australia.
- Strengthen Triple flag’s already robust organic growth pipeline in gold equivalent ounces (GEOs), while targeting tangible pre-tax synergies of around $7 million annually.
Under the terms of the transaction, Maverix shareholders may elect to receive either US$3.92 in cash or 0.360 of a Triple Flag share for each Maverix share held, representing a share consideration of US$3.92 per Maverix share based on the closing price of Triple Flag shares on November 9, 2022 of US$10.89.
The shareholder election will be subject to pro-ration such that that cash consideration will not exceed 15% of the total consideration and the share consideration will not exceed 85% of the total consideration.
Maverix shareholders who do not elect to receive either Triple Flag shares or cash will be deemed to have elected a default consideration of 0.360 Triple Flag shares per Maverix share.
Prior to Thursday’s announcement, Triple Flag had emerged as a gold-focused streaming and royalty company offering bespoke financing solutions to the metals and mining sector. It aimed to be a sought after, long term funding partner to mining companies throughout the commodity cycle.
Since the company’s inception in 2016, the Triple Flag has assembled a diversified portfolio of streams and royalties, offering exposure primarily to gold and silver in the Americas and Australia.
Maverix held interests in various properties in the Americas, Australia, Mexico and Canada.
The combined company will continue as Triple Flag Precious Metals Corp., headquartered in Toronto and led by Shaun Usmar as CEO. After the transaction closes it is expected that Maverix founder and Chair Geoff Burns will join the Triple Flag board of directors, along with another Maverix nominee.
The combined company will also continue to pay an annual dividend of US$0.20 per Triple Flag share, resulting in an effective dividend increase of over 40% for Maverix shareholders pro forma, based on the exchange ratio.