Canada-based Triple Flag Precious Metals has entered into a definitive agreement to acquire all the issued and outstanding common shares of Maverix Metals, under a plan of arrangement.

Under the terms of the transaction agreement, Maverix shareholders can receive either $3.92 in cash or 0.360 of a Triple Flag share in exchange for each Maverix share held.

The cash portion in the total consideration will not be more than 15%.

The shareholders who do not elect either Triple Flag shares or cash will be considered to receive a default consideration of 0.360 Triple Flag shares for each Maverix share.

The purchase price implies a total equity value of $606m for Maverix, on a fully diluted basis.

Triple Flag shareholder Elliott Investment Management and Maverix shareholders Newmont Corp., Pan American Silver Corp. and Kinross Gold are in support of the combination.

As part of the transaction, Maverix founder and chair Geoff Burns, and other nominees will be appointed to the Triple Flag board of directors.

Triple Flag founder and CEO Shaun Usmar said: “This transaction creates the world’s leading gold-focused emerging senior streaming and royalty company, bringing together two complementary portfolios in a compelling combination.

“Triple Flag’s portfolio, with a strategic emphasis on larger, cash-generating assets, with more than 90% by NAV associated with producing mines, is complemented by Maverix’s highly diversified portfolio of 148 royalties and streams, with paying assets equating to around 60% of NAV.

“The combination builds on Triple Flag’s 26% compound annual growth rate in GEOs over the past five years, increasing from 84koz in 2021 to an expected average of over 140koz over the next five years, before factoring in the additional organic growth potential from the significant portfolio of exploration and development stage assets.”

The transaction will combine two complementary portfolios of predominantly gold and silver streams and royalties, to create an emerging senior streaming and royalty company.

Upon completion, the Triple Flag shareholders would own around 77%, while the Maverix shareholders would own around 23% of the combined company.

The combined company will continue as Triple Flag Precious Metals Corp., based in Toronto, Ontario, and will be led by Shaun Usmar as CEO.

It will have 29 paying assets and 228 assets overall, located in Latin America, North America and Australia.

The acquisition is expected to strengthen Triple Flag’s organic growth pipeline in gold equivalent ounces (GEOs) and diversify its portfolio and shareholder base.

National Bank Financial served as financial advisor and Torys as legal counsel to Triple Flag, on the transaction.

Raymond James served as a financial advisor and Blake, Cassels & Graydon and Davis Graham & Stubbs as Canadian and U.S. legal counsel, respectively to Maverix.

Geoff Burns said: “Since their respective inceptions, roughly 6.5 years ago, both companies have steadfastly stuck to their objectives of building pure play precious metals streaming and royalty companies, while simultaneously exercising prudent financial discipline.

“The increased scale of the combined company, with its highly complementary portfolios and a knowledgeable and supportive shareholder base, will provide real competitive advantages and should attract a premium valuation, to the benefit of both sets of shareholders.”