Kinross Inks Deal With Maverix to Sell Royalty Portfolio

Zacks

Kinross Gold Corporation KGC signed a deal to sell its royalty portfolio to Maverix Metals Inc. MMX for the total consideration of $74 million. The total consideration includes $25 million in cash and 11.2 million Maverix common shares, which represent a 9.4% ownership stake in Maverix.

Per Kinross, the deal realizes the value of its royalty portfolio as well as provides it with upside exposure through its equity position in Maverix.

As part of the deal, Kinross will enter an investor rights agreement with Maverix on transaction closing, which will grant it with pre-emptive rights to engage in any equity financing to retain its ownership position in the future.

The transaction is slated to be closed on or before the end of 2019, subject to customary closing terms and conditions.

Paradigm Capital served as the financial advisor for Kinross in connection with the deal.

Shares of Kinross have rallied 54.4% in the past year compared with the industry’s 50.3% growth.

Last month, Kinross stated that it is on track to attain the production target of 2.5 million (+/- 5%) gold equivalent ounces for 2019. All-in sustaining costs are expected to be $995 (+/- 5%) per gold equivalent ounce.

The company also expects to meet the lower end of its 2019 production cost of sales guidance of $730 (+/- 5%) gold equivalent ounces and the top end of its 2019 capital expenditure projection of $1,050 million (+/- 5%).

Kinross Gold Corporation Price and Consensus

Zacks Rank & Other Stocks to Consider

Kinross currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Impala Platinum Holdings Ltd. IMPUY, currently sporting a Zacks Rank #1 (Strong Buy), and Franco-Nevada Corporation FNV, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has a projected earnings growth rate of 255.2% for 2019. The company’s shares have rallied 224.5% in a year.

Franco-Nevada has a projected earnings growth rate of 46.2% for 2019. The company’s shares have rallied 42.7% in a year.

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