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• Sailfish Royalty announced that it entered into amended agreements with Mako to restructure its Mt. Hamilton asset.
• The agreement now includes an 11-year stream consisting of a 5-year stream of 341.7oz per month and a 6-year stream of 100oz per month. This increased our NAV for the asset by ~$1.0M.
• We have also increased our commodity price assumptions in our model, resulting in an increased NAVPS and increased target price.
This morning, Sailfish Royalty (FISH:TSXV, SROYF:OTC) announced that it has entered into amended agreements with Mako Mining Corp. to restructure the consideration related to the transaction on the Mt. Hamilton Gold-Silver Project in Nevada. The amended transaction replaces the previous five-year gold stream followed by a 2% NSR royalty with an expanded 11-year gold stream, eliminating the royalty component of the deal.
Under the original agreement announced in September (read our note on this here), Sailfish was to receive ~341.7oz of gold per month for five years at 20% of the gold price, subject to a $2,700/oz floor and $3,700/oz cap, after which the stream would convert into a 2% NSR on all life of mine production from Mt. Hamilton. Now, under the amended structure, Sailfish will instead receive a 132-month stream (11-year) consisting of 341.7oz per month for the first 60 months with the same $2,700/oz-$3,700/oz collar, followed by 100oz per month for 72 months at 20% LBMA pricing with no floor or cap, with the 2% NSR being terminated. We are maintaining our BUY rating and increasing our target price to C$5.25/share (previously C$4.25/share) on Sailfish Royalty.
A key change under the amended agreement is that Mako may satisfy its gold delivery obligations using refined gold from any source, rather than being tied exclusively to production from Mt. Hamilton. This effectively decouples Sailfish’s cash flow from the development timeline, construction risk, and operational performance of the project. While the original structure provided longer-term upside through the 2% NSR, the amended agreement shifts the consideration toward a long-duration, defined, and secured stream with greater payment certainty and improved visibility over the next decade.
FISH: Restructuring Mt. Hamilton Stream; Increasing Target Price
What you need to know:• Sailfish Royalty announced that it entered into amended agreements with Mako to restructure its Mt. Hamilton asset.
• The agreement now includes an 11-year stream consisting of a 5-year stream of 341.7oz per month and a 6-year stream of 100oz per month. This increased our NAV for the asset by ~$1.0M.
• We have also increased our commodity price assumptions in our model, resulting in an increased NAVPS and increased target price.
This morning, Sailfish Royalty (FISH:TSXV, SROYF:OTC) announced that it has entered into amended agreements with Mako Mining Corp. to restructure the consideration related to the transaction on the Mt. Hamilton Gold-Silver Project in Nevada. The amended transaction replaces the previous five-year gold stream followed by a 2% NSR royalty with an expanded 11-year gold stream, eliminating the royalty component of the deal.
Under the original agreement announced in September (read our note on this here), Sailfish was to receive ~341.7oz of gold per month for five years at 20% of the gold price, subject to a $2,700/oz floor and $3,700/oz cap, after which the stream would convert into a 2% NSR on all life of mine production from Mt. Hamilton. Now, under the amended structure, Sailfish will instead receive a 132-month stream (11-year) consisting of 341.7oz per month for the first 60 months with the same $2,700/oz-$3,700/oz collar, followed by 100oz per month for 72 months at 20% LBMA pricing with no floor or cap, with the 2% NSR being terminated. We are maintaining our BUY rating and increasing our target price to C$5.25/share (previously C$4.25/share) on Sailfish Royalty.
A key change under the amended agreement is that Mako may satisfy its gold delivery obligations using refined gold from any source, rather than being tied exclusively to production from Mt. Hamilton. This effectively decouples Sailfish’s cash flow from the development timeline, construction risk, and operational performance of the project. While the original structure provided longer-term upside through the 2% NSR, the amended agreement shifts the consideration toward a long-duration, defined, and secured stream with greater payment certainty and improved visibility over the next decade.
Underlying
Sailfish Royalty Corp.
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Atrium Research Corporation
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Ben Pirie
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