A lesser known corner of mine financing is having a moment in the sun, with two royalty and streaming deals announced on Thursday.
Shaun Usmar’s Triple Flag Precious Metals agreed to buy fellow Toronto-based Maverix Metals in a $606-million transaction. Separately, Vox Royalty said it will buy a Canadian royalty portfolio from First Quantum Minerals for C$605 000.
Streaming gives lenders the right to buy future production at a discount. While two doesn’t make a trend, the deal activity reflects demand for such arrangements when inflation-fighting measures and China’s ongoing Covid restrictions are dimming economic outlooks and cooling conventional funding for mining.
Streaming deals are taking place in the wake of a battle to buy mid-sized miner Yamana Gold as the industry faces spiraling operating and development costs. Almost all metal prices -- both precious and industrial -- are down this year on slowdown concerns and dollar strength.
For Triple Flag, which Usmar founded in 2016 with the backing of billionaire Paul Singer’s Elliott Management, Maverix is a chance to gain scale and unlock value.
To be sure, not everyone’s a royalty and streaming fan. This week, Newcrest Mining labeled such an arrangement by SolGold to develop a gold and copper mine in South America as “expensive” and “negative".