This is another bagger potential IMO.
MAXIMUS RESOURCES (MXR)
I read with great interest that in response to a subscriber, a gold expert tipster on newsletter did not think that there exist a gold stock on ASX on royalty payments.
Guess What?
It DOES exist. The company is Maximus Resources (MXR) - as in Maximus character in Gladiator.
This $16m company (now trading at 20c) is so under the radar from even the expert , has cleverly structured a royalty payment stream from two ASX listed companies below, the first Yandal is a 15% NST owned company and the second Terramin has already completed feasibility studies. MXR estimates the royalty payment is worth at least $8 million. So that accounts for half of its existing valuation. On top of that, it has also announced a high grade intercept at its Spargoville tenement which is adjacent to Ramelius's Wattle Dam gold mine in Kambalda.
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Royalties Maximus has two near-term gold royalty opportunities to bring significant cash flow into the Company.
The Company considers these royalties to be a significant value credit to the Company as they exceed the current market cap of the Company with over ~$8million in potential value.
Maximus owns two gold royalties over two gold-focused ASX listed companies.
The two gold royalties are; the Flushing Meadows Royalty and the Bird in Hand Royalty.
These 2 gold royalties are becoming increasingly more valuable as the price of gold sits near all-time highs and gold focused Companies accelerate their efforts towards production.
Flushing Meadows Royalty – Yandal Resources (ASX:YRL)
Resource (JORC 2012) - 190,000ozs (Further Resource Upgrade Pending)
The entitlement is structured as follows: -
$200,000 payable to MXR upon commencement of gold production
- Maximus is entitled to $40 per oz for the first 50,000ozs
- Maximus is entitled to $20 per oz for a further 100,000ozs
- 3% NSR to MXR for any gold by-products (silver etc.)
- Royalty capped at $4 million
(YRL ASX Announcement November 22, 2019) Yandal Resources Flagship prospect is the Flushing Meadows prospect which sits mostly within a granted Mining Lease. As per the Company announcement (ASX Announcement February 11, 2020) the Company’s 1st goal is to define an open pit development at Flushing Meadows. The deposits are shallow and have been modelled for 1.8km along strike and to an average depth of 130m.* A 10,000m drilling program commenced in May as part of an open pit mining feasibility study work streams including Resource and Reserve definition, grade control simulation, metallurgical, geotechnical and hydrogeological studies (ASX Announcement 17 March 2020).
Maximus is pleased with the success of Yandal Resources recent drilling campaign and looks forward to the Companies updates on its feasibility studies at the Flushing Meadows prospect and future resource upgrades. *(YRL ASX Announcement February 11, 2020)
Bird in Hand Royalty – Terramin (ASX:TZN)
Resource (JORC 2012) - 265,000 ounces @ 12.6g/t
Maximus has an entitlement to a series of contingent payments and a royalty from Terramin Australia Limited (Terramin) in respect of the development of the Bird in Hand Gold Project (BIHGP) in South Australia.
The entitlement is structured as follows:
- $1million payable to MXR on first approval of Program for Environmental Protection and Rehabilitation (PEPR)
- $1million payable to MXR on commencement of bullion production
- Ongoing royalty of 0.5% on >50,000ozs Terramin advised the market in its’ March 2020 quarterly report that it has continue to advance its Mining Lease Application which was submitted to the South Australian Department for Energy and Mining (DEM) in June 2019 and is currently progressing a response to questions raised by DEM.
Terramin has also advised that it is finalising a definitive feasibility study for BIHGP. Maximus remains confident that the prospects for the development are very high. Terramin is committed to the development of BIHGP due to its high gold grades (circa 12gms gold per tonne), low capital expenditure requirements and very high returns. In the BIHGP Scoping Study released in October 2018, Terramin advised that based on an A$1700 gold price the project generated an NPV(8) of $101 million with a modest pre-production capital expenditure of $34 million.
Maximus Resources Limited (“Maximus” or “the Company”, ASX:MXR) is pleased to announce encouraging initial reconnaissance air-core drilling gold assay results across the S5 and S13 drill targets including a very high grade intercept of 245g/t, adjacent to the historical high-grade Wattle Dam Gold Mine at Maximus’ 100% owned Spargoville tenement, located 20km from Kambalda, Western Australia’s premier gold and nickel mining district.
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