Mako Mining Announces Gold Purchase Agreement with Sailfish Royalty

Mako Mining Corp., a publicly listed gold mining, development, and exploration company, has announced a non-binding letter of intent to enter into a gold purchase agreement with Sailfish Royalty Corp. The agreement aims to facilitate shareholder returns and accretive acquisitions for Mako.

Under the terms of the proposed agreement, Sailfish will purchase refined gold from Mako over a 240-month period. The agreement is structured in four parts, with the first part covering the period from September 2026 to August 2028, during which Sailfish will receive 650 troy ounces of refined gold per month. The second part, from September 2028 to February 2031, will see the monthly delivery of 750 troy ounces. The third part, from March 2031 to February 2037, will increase the monthly delivery to 900 troy ounces. Finally, from March 2037 onwards, Sailfish will receive 1,000 troy ounces of refined gold per month.

For each ounce of refined gold delivered, Sailfish will pay Mako a price equal to 25% of the London Bullion Market Association PM Fix price on the date of delivery. Mako has the flexibility to satisfy its obligations by delivering refined gold from any source, including London Bullion Market Association gold delivery bars.

In exchange for the gold, Sailfish proposes to issue 70 million common shares to Mako at a price per share of $5.76, based on a five-day volume-weighted average price (VWAP) ending on the trading day immediately prior to signing the letter of intent. These shares will be subject to a four-month and one-day statutory hold period. Following the acquisition, Mako is anticipated to hold approximately 49% of Sailfish's issued and outstanding common shares.

Mako Mining's CEO, Akiba Leisman, stated that the transaction is expected to accelerate the company's acquisition and shareholder return strategies. Since early 2024, Mako has completed three acquisitions, which form the majority of its corporate net asset value. The company's cash and securities balance has grown significantly, and the transaction is expected to enable Mako to return the majority of its $112 million in cash and securities to shareholders in the form of dividends, or use the Sailfish shares as a strategic financing currency for accretive acquisitions.

The transaction is subject to several conditions, including the negotiation and execution of a definitive gold purchase agreement. The agreement will contain certain conditions precedent, such as obtaining required special committee and board approvals, obtaining TSXV approval, disinterested shareholder approval, and receiving a fairness opinion. Additionally, the obligations of Mako under the agreement will be secured against all present and after-acquired property, with the exception of specific projects.

As both Mako and Sailfish are controlled by Wexford Capital LP, the transaction is considered a related party transaction. Mako has appointed an independent special committee to assist in the evaluation and supervision of the transaction. The committee will consider and make recommendations to the board of directors.

The transaction is expected to enhance Mako's ability to access lower-cost financing structures and pursue acquisition opportunities of a size and quality that have historically been unavailable to the company. The company's San Albino gold mine in Nicaragua, the Moss Mine in Arizona, and the Mt. Hamilton Project in Nevada are among its assets. Additionally, Mako holds a 100% interest in the PEA-stage Eagle Mountain Project in Guyana, South America.