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TMAC adds 1.5% to Maverix's net smelter royalty from Hope Bay gold project

TMAC Resources Inc. said Aug. 14 that it amended its agreement with Maverix Metals Inc., increasing the latter's net smelter royalty by 1.5% from the existing 1% along with a US$3 million concurrent equity issuance at a price of C$6.0 per share, for total proceeds of US$43 million to support investments growth in the Hope Bay gold project in Canada while providing a buffer against operational volatility and funding TMAC's seasonal sea lift.

The transaction, which is expected to close on Aug. 16, was approved by Sprott Resource Lending Corp., which has the sole discretion to approve additional royalties from the project.

Under the agreement, there will be a short term incremental 0.25% net smelter royalty until the additional 1.5% is registered against the property, which is expected once TMAC completes its payment of debt to Sprott in 2021.

A full buyback right will be given to TMAC for US$50 million in the event of a change of control transaction announced before June 30, 2021.

The agreement includes a step down of the additional 1.5% NSR, regardless of whether the partial buyback right has been exercised, to 0.75% after three million ounces of gold is produced from the project starting from the effective date.