Mako Mining Corp. has entered into a non-binding letter of intent with Sailfish Royalty Corp. to sell a corporate-level, 240-month gold stream in exchange for 70 million common shares of Sailfish valued at $5.76 per share.

Under the proposed transaction, Mako will hold approximately 49% of Sailfish's issued and outstanding common shares upon completion. The gold stream requires Mako to deliver refined gold over a 240-month term across four phases, starting at 650 ounces per month until August 2028, increasing to 750 ounces until February 2031, stepping up to 900 ounces until February 2037, and concluding at 1,000 ounces per month. For each ounce, Sailfish will pay 25% of the London Bullion Market Association PM Fix price. Mako can satisfy deliveries using gold from any source except its Mt. Hamilton Project.

The transaction aims to capitalise on the valuation differential between gold royalty and operating companies. Sailfish intends to amend its dividend policy following the closing to provide an annual cash equivalent of one ounce of gold for every 18,000 shares owned, payable quarterly. Mako plans to use the Sailfish shares as lower-cost financing currency for acquisitions or to return the majority of its US$112 million in cash and securities to shareholders via dividends.

Because both companies are controlled by Wexford Capital LP, the arrangement constitutes a related-party transaction requiring an independent formal valuation, a fairness opinion, and minority shareholder approvals. The agreement also remains subject to a definitive gold purchase agreement and regulatory and stock exchange approvals. Mako intends to hold a meeting of shareholders to vote on the transaction.

Mako operates the San Albino gold mine in Nicaragua and owns the Moss Mine in Arizona, alongside development and exploration assets including the Mt. Hamilton Project and the Eagle Mountain Project.

"This transaction with Sailfish is expected to accelerate our acquisition and shareholder return strategies. With this transaction, we anticipate either securing lower-cost financing to return the majority of the US$112 million on our balance sheet to shareholders via dividends, or using the Sailfish Shares as lower-cost capital for accretive acquisitions, opening up the opportunity to do similar transactions with Sailfish in the future."

— Akiba Leisman, CEO

Read the full announcement: Mako Mining Announces a Non-Binding Letter of Intent to Enter a Gold Purchase Agreement with Sailfish Royalty to Lower its Cost of Capital and Facilitate Shareholder Returns and Accretive Acquisitions