(All dollar amounts are in Canadian dollars
unless otherwise indicated)
TSXV: MTA
NYSE American: MTA
VANCOUVER, BC, Oct. 9, 2020
/CNW/ - Metalla Royalty & Streaming
Ltd. ("Metalla" or the "Company") (TSXV:
MTA) (NYSE American: MTA) announces its operating and financial
results for the three months ended August
31, 2020. For complete details of the consolidated financial
statements and accompanying management's discussion and analysis
for the three months ended August 31,
2020, please see the Company's filings on SEDAR
(www.sedar.com) or on EDGAR (www.sec.gov). Shareholders are
encouraged to visit the Company's website at
http://www.metallaroyalty.com/.
Brett Heath, President and CEO
of Metalla commented, "Fiscal Q1 represents another major step in
growth for Metalla's royalty portfolio with the addition of two
producing royalties, Wharf and Higginsville, and the highly coveted
Fosterville royalty. We are
excited about the new opportunities in front of us and to see many
of our assets having exploration success while being advanced
toward production by our first-class counterparties."
FINANCIAL HIGHLIGHTS
During the three months ended August
31, 2020, and the subsequent period, the Company:
- increased the number of royalties and streams held to a total
of 50 precious metal assets through the following notable
transactions:
-
- acquired a net 1.0% Gross Value Royalty interest on the
operating Wharf mine ("Wharf") in South Dakota from third parties for total
consideration of US$1.0 million in
cash and 899,201 common shares. Wharf is operated by Coeur
Mining, Inc. ("Coeur");
- acquired an existing 2.5% Net Smelter Return ("NSR")
royalty on the northern and southern portions of Kirkland Lake Gold
Ltd.'s ("Kirkland Lake")
operating Fosterville mine
("Fosterville") in
Victoria, Australia, from NuEnergy
Gas Limited for total consideration of AUD$2.0 million in cash and
467,730 common shares; and
- announced that it had entered into a purchase and sale
agreement with Morgan Stanley Capital Group Inc. to acquire an
existing 27.5% price participation royalty interest on Karora
Resources Inc.'s operating Higginsville Gold Operations
("Higginsville") for up to US$6.5
million in common shares of Metalla based on the fifteen day
VWAP on the NYSE prior to closing, less any royalty payments
received by Morgan Stanley prior to the closing of the
transaction. The royalty is a 27.5% price participation
royalty interest on the difference between the London PM fix gold
price and AUD$1,340/oz on the first 2,500 ounces per quarter until
a cumulative total of 34,000 ounces of gold has been delivered to
Metalla. Higginsville is a low-cost open pit gold operation
in Higginsville, Western Australia. The transaction has
received the required regulatory approvals and is expected to close
in the calendar fourth quarter of 2020.
- recognized revenue on 252 (August 31,
2019 – 118) attributable gold equivalent ounces at an
average realized price of US$1,763.69
(August 31, 2019 - US$1,391.29) and average cash cost of
US$42.81 (August 31, 2019 - US$316.49) per gold equivalent oz. (see non-IFRS
Financial Measures);
- generated operating cash margin of US$1,720.88 (August 31,
2019 - US$1,074.80) per
attributable gold equivalent ounce from the Wharf Gross Value
Royalty, Joaquin NSR, New Luika Gold Mine stream held by Silverback
Ltd., and other royalty interests (see non-IFRS Financial
Measures);
- recognized revenue from royalty and stream interests of
$0.5 million (August 31, 2019 - $0.2
million), net loss of $1.9
million (August 31, 2019 -
$0.5 million), and adjusted EBITDA of
negative $0.3 million (August 31, 2019 - negative $0.6 million) (see non-IFRS Financial
Measures);
- completed a secondary public offering for Coeur for a total of
3,910,000 common shares of the Company previously held, at a price
of US$5.30 per common share for gross
proceeds of US$20.7 million (the
"Secondary Offering"). The net proceeds of the
Secondary Offering were paid directly to Coeur; and
- completed an amendment of the convertible loan facility with
Beedie Capital ("Beedie") whereby Beedie converted
$6.0 million of the $7.0 million initial advance at $5.56 per share for a total of 1,079,136 shares.
The Company drew down the remaining $5.0
million from the original loan facility with a revised
conversion price of $9.90 and Beedie
will make an additional $20.0 million
available to the Company to fund future acquisitions.
Following the conversion and the additional drawdown the Company
has a total of $6.0 million
outstanding and $20.0 million
available under the amended loan facility.
ASSET UPDATES
COSE & Joaquin Royalties
Metalla received its first royalty payments on Cap-Oeste Sur
East ("COSE") and Joaquin for production in fiscal 2020.
Revenue was related to mainly development ore shipped to the
Manantial Espejo plant. Both mines were scheduled to ramp up to
commercial production during the first two calendar quarters of
2020 but have been delayed due to a mandatory shut down of
operations by the Argentina
government as a result of COVID-19. Pan American
reported by news release on August 5,
2020, operations at Pan American's COSE & Joaquin mines
resumed on May 4, 2020, with
high-grade ore being stockpiled on-site.
Metalla holds an NSR royalty of 1.5% and 2.0% on COSE and
Joaquin mines, respectively.
New Luika Silver Stream
On September 3, 2020, Shanta Gold
Limited ("Shanta") reported an updated reserve and resource
estimate for the New Luika Gold Mine ("NLGM") in
Tanzania. As of June 30, 2020,
Shanta reported Ore Reserves of 3,941 Kt at 3.23 g/t for 410 Koz of
gold and Resources exclusive of Reserves of 6,724 Kt at 2.45 g/t
for 531 Koz of gold. Shanta also released assay results from recent
drilling within the NLGM which Shanta expects to incorporate into
an updated mine plan. Significant results included 5.5 g/t gold
over 8.12 metres and 6.59 g/t gold over 6.06 metres. On
September 22, 2020, Shanta reported
their intentions to expand the processing capacity at the NLGM. The
expansion, which is expected to begin commissioning in Q1 2021,
will increase mill throughput capacity by 14% to an annual
projected processing rate of 783 KTPA.
Metalla holds a 15% interest in Silverback Ltd. whose sole
business is receipt and distribution of a silver stream on NLGM at
an ongoing cost of 10% of the spot silver price.
Wasamac
On September 10, 2020, Monarch
Gold Corporation ("Monarch") announced their intentions to
undertake a review of the silver potential at the Wasamac Gold
project in Quebec, Canada. 2012
drilling and resampling programs identified silver mineralization
associated with gold-rich sections. The best values recorded
include 7.01 g/t silver over 75.9 metres and 10.72 g/t silver over
10.2 metres. Monarch believes a thorough review of the silver
potential could add value to the property as the 2018 Wasamac
feasibility report had not considered silver in the economic
analysis.
Metalla holds a 1.5% NSR on the Wasamac project subject to a buy
back of 0.5% for $7.5 million.
Beaufor Mine
On October 1, 2020, Monarch
reported initial drilling results totalling 1,425.6 metres of the
42,500-metre drill program at the Beaufor Mine in Val-d'Or, Quebec. Significant intercepts
included 783 g/t gold over 0.2 metres and 293 g/t gold over 0.5
metres.
Metalla holds a 1.0% NSR on the Beaufor mine once Monarch has
produced 100 Koz of gold from the property.
Fosterville
On July 30, 2020, Kirkland Lake announced results from drilling
in the Harrier system which continued to return encouraging
results, demonstrating a sustained growth opportunity down dip and
in the southern extensions. New drilling returned high-grade
mineralization outside of the existing mineral reserves, and also
demonstrated the continuity of the Harrier structure for 400 metres
down plunge while remaining open at depth with intercept of 8.1 g/t
gold over 4.5 metres. Additional high-grade intercepts from ongoing
drilling include 20.9 g/t gold over 5.9 metres including 295 g/t
gold over 0.3 metres and 22.8 g/t gold over 4.3 metres.
Furthermore, drilling at depth outlined a new sulfide structure in
the footwall of the Harrier Base fault called Wagtail presenting
additional future targets at depth.
Metalla holds a 2.5% NSR royalty on the northern and southern
sections of the Fosterville Mining Lease.
Redhill
On September 23, 2020, NuLegacy
Gold Corporation ("NuLegacy") announced they had received
permits to begin a drill program on the highly prospective Rift
Anticline target which spans 5-6 sq. km in the Cortez gold-trend of
Nevada. NuLegacy plans to drill
three to five core holes in the most developed targets commencing
mid-October with the balance the 16-hole program scheduled for
completion in Spring 2021.
Metalla holds a 1.5% royalty on the Red Hill project.
Goodfish-Kirana
On September 23, 2020, Warrior
Gold Inc. reported mineralization at the "A" zone was extended 50
meters to the east, 100 metres to the west and 100 metres down dip,
confirming continuity of the deposit. High grade intercepts include
6.7 g/t gold over 7.4 metres within 2.65 g/t over 22.3 metres
within a new high-grade vein system. Other significant intercepts
include 3.69 g/t gold over 2.3 metres and 4.07 g/t gold over 7
metres.
Metalla holds a 1% NSR Royalty on the "A" Zone Goodfish-Kirana
property.
Lourdes
On October 5, 2020 Pucara Gold
Ltd. announced the receipt of final authorization to begin drilling
at the Lourdes project in Peru.
The phase 1 drill program will consist of 5,430 meters in 23 RC
holes and is expected to commence in October
2020.
Metalla holds a 1% NSR royalty on the Lourdes Gold project.
Aureus East
On October 6, 2020, Aurelius
Minerals Inc. reported assay results from previously unsampled and
unassayed underground drill core from the Aureus East project.
Significant intercepts include 28.4 g/t gold over 1.78 metres, 32.2
g/t gold over 1.10 metres and 3.3 g/t gold over 7.25 metres. The
10,000 metres phase 1 program at the Aureus Gold project is
ongoing.
Metalla holds a 1% NSR royalty on the Aureus East project.
CHANGE IN YEAR-END
In order to better align the Company's reporting cycle with its
peers and its royalty and stream partners, the Company will be
changing its year-end to December 31,
beginning with December 31,
2020. As such the Company will have a four-month period
ending December 31, 2020 as its next
reporting period, at which time it will be producing statements for
the seven months ended December 31,
2020. For additional information please see the Notice filed
by the Company on October 9, 2020,
which is available on SEDAR at www.sedar.com.
AT-THE-MARKET EQUITY PROGRAM
In September 2020, the Company
announced that it had entered into an equity distribution agreement
(the "Distribution Agreement") with a syndicate of agents to
establish an At-The-Market equity program (the "ATM
Program"). Under the ATM Program, the Company may
distribute up to US$20.0 million
until June 1, 2022. From September 4, 2020, to October 8, 2020, the Company had distributed
3,000 shares under the ATM Program at an average price of
$11.27 per share for aggregate net
proceeds of $32,974.
QUALIFIED PERSON
The technical information contained in this news release has
been reviewed and approved by Charles
Beaudry, geologist M.Sc., member of the Association of
Professional Geoscientists of Ontario and of the Ordre des Géologues du
Québec and a director of Metalla. Mr. Beaudry is a QP as defined in
National Instrument 43-101 Standards of Disclosure for Mineral
Projects.
ABOUT METALLA
Metalla is a precious metals royalty and streaming company.
Metalla provides shareholders with leveraged precious metal
exposure through a diversified and growing portfolio of royalties
and streams. Our strong foundation of current and future
cash-generating asset base, combined with an experienced team gives
Metalla a path to become one of the leading gold and silver
companies for the next commodities cycle.
For further information, please visit our website at
www.metallaroyalty.com
ON BEHALF OF METALLA ROYALTY & STREAMING LTD.
(signed) "Brett Heath"
President and CEO
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the Exchange) accept
responsibility for the adequacy or accuracy of this
release.
Non-IFRS Measures
The items marked above are alternative performance measures
and readers should refer to non-international financial reporting
standards ("IFRS") financial measures in the Company's Management's
Discussion and Analysis for the three months ended August 31, 2020 as filed on SEDAR and as
available on the Company's website for further details. Metalla has
included certain performance measures in this press release that do
not have any standardized meaning prescribed by IFRS including
average cash cost per ounce of attributable gold equivalent ounces,
average realized price per ounce of attributable gold equivalent
ounce, and cash margin. Average cash cost per attributable gold
equivalent ounce is calculated by dividing the Company's total cash
cost of sales, excluding depletion by the number of attributable
gold equivalent ounces sold. Gold equivalent ounces are composed of
gold ounces attributable to the Company, plus an amount calculated
by taking the revenue earned by the Company in the period from
payable gold equivalent ounces attributable to the Company divided
by the average London fix price of
gold for the relevant period. In the precious metals
mining industry, this is a common performance measure but does not
have any standardized meaning. The Company believes that, in
addition to conventional measures prepared in accordance with IFRS,
certain investors use this information to evaluate the Company's
performance and ability to generate cash flow. Cash margin is
calculated by subtracting the average cash cost per ounce of
attributable gold equivalent ounce from the average realized price
per ounce of attributable gold equivalent ounce. The Company
presents cash margin as it believes that certain investors use this
information to evaluate the Company's performance in comparison to
other companies in the precious metals mining industry who present
results on a similar basis. The presentation of these non-IFRS
measures is intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. Other companies may
calculate these non-IFRS measures differently.
Technical and Third-Party Information
Metalla has limited, if any, access to the properties on
which Metalla holds a royalty, stream or other interest. Metalla is
dependent on (i) the operators of the mines or properties and their
qualified persons to provide technical or other information to
Metalla, or (ii) publicly available information to prepare
disclosure pertaining to properties and operations on the mines or
properties on which Metalla holds a royalty, stream or other
interest, and generally has limited or no ability to independently
verify such information. Although Metalla does not have any
knowledge that such information may not be accurate, there can be
no assurance that such third-party information is complete or
accurate. Some information publicly reported by operators may
relate to a larger property than the area covered by Metalla's
royalty, stream or other interest. Metalla's royalty, stream or
other interests can cover less than 100% and sometimes only a
portion of the publicly reported mineral reserves, resources and
production of a property.
The disclosure was prepared in accordance with Canadian
National Instrument 43-101 ("NI 43-101"), which differs
significantly from the current requirements of the U.S. Securities
and Exchange Commission (the "SEC") set out in Industry Guide 7.
Accordingly, such disclosure may not be comparable to similar
information made public by companies that report in accordance with
Industry Guide 7. In particular, this news release may refer to
"mineral resources", "measured mineral resources", "indicated
mineral resources" or "inferred mineral resources". While these
categories of mineralization are recognized and required by
Canadian securities laws, they are not recognized by Industry Guide
7 and are not normally permitted to be disclosed in SEC filings by
U.S. companies that are subject to Industry Guide 7. U.S. investors
are cautioned not to assume that any part of a "mineral resource",
"measured mineral resource", "indicated mineral resource", or
"inferred mineral resource" will ever be converted into a
"reserve." In addition, "reserves" reported by the Company under
Canadian standards may not qualify as reserves under Industry Guide
7. Under Industry Guide 7, mineralization may not be classified as
a "reserve" unless the mineralization can be economically and
legally extracted or produced at the time the "reserve"
determination is made. Accordingly, information contained or
referenced in this news release containing descriptions of mineral
deposits may not be comparable to similar information made public
by U.S. companies subject to the reporting and disclosure
requirements of Industry Guide 7.
"Inferred mineral resources" have a great amount of
uncertainty as to their existence and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or
any part of an inferred mineral resource will ever be upgraded to a
higher category. Further, while NI 43-101 permits companies to
disclose economic projections contained in preliminary economic
assessments and pre-feasibility studies, which are not based on
"reserves", U.S. companies have not generally been permitted under
Industry Guide 7 to disclose economic projections for a mineral
property in their SEC filings prior to the establishment of
"reserves". Disclosure of "contained ounces" in a resource is
permitted disclosure under Canadian reporting standards; however,
Industry Guide 7 normally only permits issuers to report
mineralization that does not constitute "reserves" by Industry
Guide 7 standards as in-place tonnage and grade without reference
to unit measures. Historical results or feasibility models
presented herein are not guarantees or expectations of future
performance.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian and U.S. securities legislation. The forward-looking
statements herein are made as of the date of this press release
only, and the Company does not assume any obligation to update or
revise them to reflect new information, estimates or opinions,
future events or results or otherwise, except as required by
applicable law.
Often, but not always, forward-looking statements can be
identified by the use of words such as "plans", "expects", "is
expected", "budgets", "scheduled", "estimates", "forecasts",
"predicts", "projects", "intends", "targets", "aims", "anticipates"
or "believes" or variations (including negative variations) of such
words and phrases or may be identified by statements to the effect
that certain actions "may", "could", "should", "would", "might" or
"will" be taken, occur or be achieved. Forward-looking statements
and information include, but are not limited to, statements with
respect to future events or future performance of Metalla, payments
to be paid to Metalla by property owners or operators of mining
projects pursuant to net smelter returns and other royalty
agreements of Metalla, pending and prospective acquisitions, future
sales under the ATM Program, management's expectations regarding
Metalla's growth, results of operations, estimated future revenues,
carrying value of assets, future dividends, and requirements for
additional capital, production estimates, production costs and
revenue, future demand for and prices of commodities, expected
mining sequences, business prospects and opportunities, other
statements regarding the impact of the COVID-19 pandemic and
measures taken to reduce the spread of COVID-19 on the Company's
operations and overall business, and the temporary duration of the
COVID-19 pandemic. Such forward-looking statements reflect
management's current beliefs and are based on information currently
available to management. Forward-looking statements and information
are based on forecasts of future results, estimates of amounts not
yet determinable and assumptions that, while believed by management
to be reasonable, are inherently subject to significant business,
economic and competitive uncertainties, and contingencies.
Forward-looking statements and information are subject to various
known and unknown risks and uncertainties, many of which are beyond
the ability of Metalla to control or predict, that may cause
Metalla's actual results, performance or achievements to be
materially different from those expressed or implied thereby, and
are developed based on assumptions about such risks, uncertainties
and other factors set out herein, including but not limited to:
changes in commodity prices; lack of control over mining
operations; exchange rates; delays in or failure to receive
payments; delays in construction; delays in the sale of the mines;
third party reporting; the world-wide economic and social impact of
COVID-19 is managed and the duration and extent of the coronavirus
pandemic is minimized or not long-term; disruptions related to the
COVID-19 pandemic or other health and safety issues, or the
responses of governments, communities, partner operators, the
Company and others to such pandemic or other issues; and the other
risks and uncertainties disclosed under the heading "Risk Factors"
in the Company's most recent annual information form, annual report
on Form 40-F and other documents filed with or submitted to the
Canadian securities regulatory authorities on the SEDAR website at
www.sedar.com and the U.S. Securities and Exchange Commission on
the EDGAR website at www.sec.gov. Metalla undertakes no obligation
to update forward-looking information except as required by
applicable law. Such forward-looking information represents
management's best judgment based on information currently
available. No forward-looking statement can be guaranteed, and
actual future results may vary materially. Accordingly, readers are
advised not to place undue reliance on forward-looking statements
or information.
Readers are cautioned that forward-looking statements are not
guarantees of future performance. All of the forward-looking
statements made in this press release are qualified by these
cautionary statements.
SOURCE Metalla Royalty and Streaming Ltd.
