Metalla Acquires an Existing Royalty on Kirkland Lake's Fosterville Mine NYSE AMERICAN: MTA
Metalla Acquires an Existing Royalty on
Kirkland Lake's Fosterville Mine
NYSE AMERICAN:
MTA
TSXV:
MTA
VANCOUVER, BC
,
July 27, 2020
/CNW/ - Metalla Royalty & Streaming Ltd. ("
Metalla
" or the
"
Company
") (NYSE American: MTA) (TSXV: MTA) is pleased to announce it has entered into a
purchase and sale agreement with NuEnergy Gas Limited ("
NuEnergy
")(ASX:NGY) to acquire an
existing 2.5% net smelter return royalty interest (the "
Royalty
") on the northern and southern
portions of Kirkland Lake Gold Ltd.'s ("
Kirkland Lake
") (NYSE: KL) operating
Fosterville
mine
("
Fosterville
") for a total consideration of AUD$6 million, consisting of AUD$4 million in common
shares of Metalla ("
Metalla Shares
") and AUD$2 million in cash.
Brett Heath
, President & CEO of Metalla commented, "
This transaction marks our 50
th
royalty
asset in less than four years and we are pleased to add a royalty on an iconic mine for the gold
sector and major counterparty in
Kirkland Lake
into our growing portfolio.
Kirkland Lake
has made
an incredible discovery on the Fosterville Mine in the last few years, and we are excited to have
exposure to the southern and northern extensions of the high-grade deposits which include the
Swan zone, Harrier, and Robbin's Hill. This transaction provides shareholders with exposure to
one of the highest-margin gold mines on the planet, and with nine rigs currently drilling at
Fosterville
we see strong potential for further high-grade discoveries
(1,2)
.
"
Mr. Heath continued, "
We are excited to partner with NuEnergy using our third-party model
and
welcome them as a new shareholder of Metalla. The transaction provides NuEnergy with a more
efficient way to maximize long-term value through holding the royalty through our equity, provides
for immediate and long-term liquidity, exposure to the diversified growing portfolio, and more
attractive public market premiums."
TRANSACTION STRUCTURE
Metalla has agreed to acquire a 2.5% Royalty from NuEnergy for a total purchase price of AUD$6
million. Metalla will satisfy the consideration for the Royalty by paying AUD$2 million in cash and
issuing 467,730 Metalla Shares representing AUD$4 million in value based on the ten (10) trading
day volume weighted average price of the Metalla Shares on the TSX Venture Exchange (the
"
TSXV
") prior to this announcement. The transaction is subject to other customary closing
conditions, including obtaining the requisite TSX Venture Exchange and NYSE American approvals,
Foreign Investment Review Board ("
FIRB
") approval from the Government of
Australia
and is
expected to close in
October 2020
.
FOSTERVILLE
MINE
(1)(2)
Fosterville
is a high-grade, low cost underground gold mine in
Victoria, Australia
which has been in
production since 2005. In 2019,
Fosterville
produced 619koz gold at a grade of 39.6 g/t and a cash
cost of
US$119
/oz and AISC of
US$291
/Oz.
Kirkland Lake
recently reissued its guidance for 2020
at
Fosterville
where it anticipates producing 590 – 610koz of gold at an operating cost of
US$130
-
US$150
/Oz of gold
(2)
. In 2015, drilling at depth on the
Phoenix
decline led to the discovery
of the high-grade Eagle/Swan Zone, containing mineralization which resulted in a large increase in
reserve grade for the mine and production. Similar zones at depth have been documented at the
Harrier Zone which continues to extend south toward Metalla's royalty claims. A ramp up in mining in
the Harrier zone is anticipated to begin once development and ventilation upgrades are completed.
Kirkland Lake
has stated they are undergoing
US$70
–
US$80 million dollars
of exploration and
development drilling at
Fosterville
with a focus on the highly prospective Harrier south area where
they have disclosed they have intersected quartz veins with visible gold similar in texture to those
found in the Swan Zone.
(2)
ROYALTY MAP
(7)
Metalla Fosterville Royalty Map (CNW Group/Metalla Royalty and Streaming Ltd.)
The Royalty covers the southeastern and northeastern sections of the
Fosterville
mining lease and a
large area east and south of the mining lease. Mineralization at the Harrier and
Phoenix
/Swan Zone
are on strike with the royalty grounds in the south. We expect the Harrier mineralization to continue
onto the royalty area after further resource conversion drilling is completed. The Royalty claims
currently do not cover any publicly disclosed and NI 43-101 compliant reserves or resources. The
Russell's Reef and Hallanan's prospects are within the southern royalty grounds. In the north,
Robbin's Hill is on strike with the royalty grounds as well with the Goornong South prospect further
north.
FOSTERVILLE
RESERVES
(1)(2)(3)(4)(5)(6)
Reserves
Tonnes
Gold
(000's)
(g/t)
(Koz)
Phoenix Proven Reserves
168
17.4
94
Phoenix Probable Reserves
2,120
37.1
2,530
Phoenix Proven & Probable Reserves
2,290
35.6
2,630
Harrier Proven Reserves
8
4.7
1
Harrier Probable Reserves
350
6.9
77
Harrier Proven & Probable Reserves
358
6.8
79
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 the Ordre des Géologues du Québec and a consultant to Metalla. Mr. Beaudry is a
Qualified Person as defined in National Instrument 43-101 Standards of disclosure for mineral
projects.
ABOUT METALLA
Metalla was created for the purpose of providing shareholders with leveraged precious metal
exposure by acquiring royalties and streams. Our goal is to increase share value by accumulating a
diversified portfolio of royalties and streams with attractive returns. 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"
Neither the TSXV nor it's Regulation Services Provider (as that term is defined in the policies of the
Exchange) accept responsibility for the adequacy or accuracy of this release.
Notes:
(1)
For details on the estimation of mineral resources and reserves, including the key assumptions, parameters and methods used to estimate the Mineral Resources and
Mineral Reserves, Canadian investors should refer to the NI 43-101 Technical Reports for Fosterville and on file at www.sedar.com and the
Kirkland Lake Annual Information Form December 31, 2019
.
(2)
See
Kirkland Lake news release filed on December 3,2019
and
Kirkland Lake news release filed on June 30, 2020.
(3)
Numbers may not add due to rounding.
(4)
Mineral resources which are not mineral reserves do not have demonstrated economic viability.
(5)
Mineral resource are exclusive of mineral reserves.
(6)
See technical report titled "Updated NI 43-101 Technical Report for the Fosterville Gold Mine" dated April 1, 2019.
(7)
Royalty claims outside the Fosterville mining lease in the map cover historical claims currently subject to a tender process in the state of Victoria, Australia and are not
guaranteed to be covered
TECHNICAL AND THIRD-PARTY INFORMATION
Except where otherwise stated, the disclosure in this press release relating to
Fosterville
is based
on information publicly disclosed by the owners or operators of this property and information/data
available in the public domain as at the date hereof and none of this information has been
independently verified by Metalla. Specifically, as a royalty holder, Metalla has limited, if any,
access to the property subject to the Royalty. 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 the operator may relate to a larger
property than the area covered by Metalla's Royalty interest. Metalla's royalty interests often cover
less than 100% and sometimes only a portion of the publicly reported mineral reserves, mineral
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
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 the
closing of the proposed transactions, stock exchange acceptance, FIRB approval, , continuance of
commercial production at
Fosterville
, future development, production, recoveries, cash flow, the
profitability margins achieved at
Fosterville
, other anticipated or possible future developments at
Fosterville
and the properties on which the Company currently holds royalty and stream interests
or relating to the companies owning or operating such properties; and current and potential future
estimates of mineral reserves and resources, and the future value of the Company's stock on the
stock exchanges. 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: the risk that the parties may be unable to satisfy the closing conditions
for the contemplated transactions or that the transactions may not be completed; risks associated
with the impact of general business and economic conditions; the absence of control over mining
operations from which Metalla will purchase precious metals or from which it will receive stream or
royalty payments and risks related to those mining operations, including risks related to
international operations, government and environmental regulation, delays in mine construction
and operations, actual results of mining and current exploration activities, conclusions of economic
evaluations and changes in project parameters as plans are refined; problems related to the ability
to market precious metals or other metals; industry conditions, including commodity price
fluctuations, interest and exchange rate fluctuations; interpretation by government entities of tax
laws or the implementation of new tax laws; regulatory, political or economic developments in any
of the countries where properties in which Metalla holds a royalty, stream or other interest are
located or through which they are held; risks related to the operators of the properties in which
Metalla holds a royalty or stream or other interest, including changes in the ownership and control
of such operators; risks related to global pandemics, including the novel coronavirus (COVID-19)
global health pandemic, and the spread of other viruses or pathogens; influence of
macroeconomic developments; business opportunities that become available to, or are pursued by
Metalla; reduced access to debt and equity capital; litigation; title, permit or license disputes
related to interests on any of the properties in which Metalla holds a royalty, stream or other
interest; the volatility of the stock market; competition; future sales or issuances of debt or equity
securities; use of proceeds; dividend policy and future payment of dividends; liquidity; market for
securities; enforcement of civil judgments; and risks relating to Metalla potentially being a passive
foreign investment company within the meaning of U.S. federal tax laws; 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.
SOURCE
Metalla Royalty and Streaming Ltd.
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%SEDAR: 00005157E
For further information:
CONTACT INFORMATION: Metalla Royalty & Streaming Ltd., Brett
Heath, President & CEO, Phone: 604-696-0741, Email: [email protected]; Kristina Pillon,
Investor Relations, Phone: 604-908-1695, Email:
[email protected]; Website:
www.metallaroyalty.com
CO: Metalla Royalty and Streaming Ltd.
CNW 23:45e 27-JUL-20