Canadian companies Triple Flag and Maverix merge to strengthen their portfolio of gold producers

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Toronto-based Triple Flag Precious Metals Corp. has signed an agreement with Vancouver-based Maverix Metals Inc. to acquire all of its shares for approximately US$600 million and nearly double the number of its gold-focused production assets .

“It’s a much bigger deal for us strategically and from a value creation perspective,” said Shaun Usmar, Triple Flag’s chief executive. “Our assets are big, big, cash-generating assets, long portfolio life…and they’re very dispersed, they have a big portfolio in numbers, so they have a lot of options.”

Combined, the companies will have 29 paying assets and 228 projects in development. Maverix will own approximately 23% of Triple Flag upon closing of the agreement.

“The merger of Maverix and Triple Flag represents this rare opportunity to combine the best with the best,” Geoff Burns, president of Maverix, said in a press release. “The industrial logic behind this combination is inescapable.”

Maverix shareholders can choose to receive either $3.92 in cash per share or 0.36 Triple Flag shares for each Maverix share. The deal represents a 10% premium based on the royalty and streaming companies’ closing prices on the New York Stock Exchange on Nov. 9.

Royalty and streaming companies such as Triple Flag and Maverix invest in mines around the world in exchange for silver and metals. The merger, according to Triple Flag, will “solidify” the company’s position as the world’s fourth largest streaming and royalty company.

“We believe the combined company will benefit from strong cash flow from the resulting high-margin, high-growth, inflation-resistant and diversified portfolio,” the companies said in a press release.

The deal between the gold-focused companies is just the latest merger in the gold industry. The sector has seen at least eight notable mergers since 2018, when Barrick Gold Corp. and Randgold Resources Ltd. announced an $18 billion, premium-free, all-stock merger.

In July, Canadian gold mining companies GCM Mining Corp. and Aris Gold Corp. signed an equity deal that created Colombia’s largest gold mining company and one of the largest producers in the Americas.

Earlier this week, Yamana Gold Inc. signed an agreement with Canadian miners Agnico Eagle Mines Ltd. and Pan American Silver Corp. to sell all of its shares, after South African miner Gold Fields Ltd. ended his interest in taking over the company.

Shares of Maverix rose 48 cents or 10 percent to $5.25 on the Toronto Stock Exchange, their highest price in three months, Thursday morning. Shares of Triple Flag were trading at $14.78, down two cents. The company has a market capitalization of approximately $2.3 billion.

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