Nunavut miner TMAC Resources has evaluated a number of options to strengthen its balance sheet before deciding on the $40-million royalty agreement with Maverix Metals and CEO Jason Neal said this week that the royalty amendment would give the company the “greatest financial and strategic flexibility” to fund its growth plans in the Hope Bay greenstone belt.

The royalty amendment, which provides Maverix with an additional 1.5% net smelter royalty, strengthens the balance sheet with gross proceeds of C$57-million, enabling the miner to fund ongoing investment at Hope Bay, which comprises the Doris, Madrid and Boston gold deposits.

TMAC is expecting to spend C$16-million more on capital expenditure (capex) this year, than previously guided, mostly owing to the addition of two key projects. During the second quarter, the board approved the buying of additional mining equipment for advanced exploration at Madrid North – a project that is key to advancing a potential second mine at Hope Bay.

The board also approved additional capex for the engineering, procurement and installation of scavenger columns being added to treat the solutions tails from the concentrate treatment plant.

Together, these two project account for C$9-million of the C$16-million increase in the expansion capital budget for the year.

A further C$5-million of the increase relates to additional costs for the marine outfall pipeline, including a scope change to include a filtration station to remove suspended solids prior to discharge, while the remaining C$2-million relates to an increase in capital for the gravity concentrator project, which concluded at the end of the second quarter, and an increase to the budget for infrastructure development costs related to the Naartok East crown pillar recovery.

TMAC has also budgeted C$45-million for sustaining capex and C$25-million for exploration and evaluation this year.

Meanwhile, TMAC produced 38 520 oz in the June quarter from the Doris mine and sold 37 730 oz, generating revenue of C$66.1-million and incurred cost of sales of C$55.9-million, resulting in net profit from mining operations of $10.2-million.

The company’s net profit for the June quarter was C$1.2-million, or C$0.01 a share.

TMAC’s guidance for the year is to produce between 160 000 oz and 170 000 oz at a cash cost of $650/oz to $700/oz and an all-in sustaining cost of $90/oz to $1 050/oz.