Metalla Acquires Existing Royalty on Coeur's Producing Wharf Mine
Metalla Acquires Existing Royalty on Coeur's
Producing Wharf Mine
TSXV:
MTA
NYSE AMERICAN:
MTA
Unless otherwise specified, all references to dollars set forth herein shall mean United
States (U.S.) dollars.
VANCOUVER, BC
,
June 22, 2020
/CNW/ - Metalla Royalty & Streaming Ltd. ("
Metalla
" or the
"
Company
") (TSXV: MTA) (NYSE American: MTA) is pleased to announce it has entered into
agreements with Coeur Mining, Inc. ("
Coeur
") (NYSE: CDE) and third-parties to jointly acquire an
existing 1.3875% royalty interest (the "
Royalty
") on the operating Wharf mine ("
Wharf
") for total
consideration of
$8.0 million
consisting of
$7.0 million
in existing Metalla common shares ("
Metalla
Shares
") and Metalla Shares from treasury, and
$1.0 million
in cash. Metalla and Coeur will retain
1.0% and 0.3875% of the Royalty for total consideration of
$5.77 million
and
$2.23 million
,
respectively.
Brett Heath
, President & CEO of Metalla commented, "
We are pleased to add a high-quality
producing gold royalty on one of the premier gold mines located in
the United States
with a proven
operator such as Coeur. Wharf has been in production for more than three decades with an
established track record of generating free cash flow. This transaction provides shareholders with
immediate exposure to cash flow on a strong performing and well-run gold asset on an accretive
basis.
"
Wharf is an open pit, heap leach operation located in the Northern Black Hills of
South Dakota
acquired by Coeur in
February 2015
from Goldcorp Inc. for cash consideration of approximately
$99.5 million
. The mine has been a consistent free cash flow generating asset for Coeur and
consists of several areas of adjoining gold mineralization, which have been mined as a series of
open pits. The mine produced 84,172 ounces of gold in 2019
(1)
.
TRANSACTION STRUCTURE
Metalla has agreed to acquire a 1.3875% royalty on the Wharf mine from third-parties for a total
purchase price of
$8.0 million
. In conjunction with this transaction, Metalla has agreed to sell a
0.3875% royalty to Coeur, which will be satisfied through the transfer of 421,554 Metalla Shares
currently held by Coeur, representing
$2.23 million
in value based on a price of
$5.30
per Metalla
Share (the "
Consideration Share Price
") to the third-party sellers. Metalla will satisfy the remainder
of the consideration for its 1.0% royalty by paying
$1.0 million
in cash and issuing 899,201 Metalla
Shares representing
$4.77 million
in value based on the Consideration Share Price. As part of the
transaction, Coeur has agreed to waive its pre-emptive right with respect to the Royalty, concurrent
with the completion of the secondary offering announced on
June 22, 2020
. The transaction is
subject to other customary closing conditions, including obtaining the requisite TSX Venture
Exchange and NYSE American approvals, and is expected to close by
June 30
, 2020.
Mr. Heath continued, "We are also proud to showcase a successful case-study on how our third-
party royalty model can generate a significant amount of value from start to finish for our partners
and shareholders. In 2017 Metalla acquired a non-core royalty portfolio from Coeur in a share-
based transaction at a price of
C$2.16
(7)
. We now welcome the third-parties as new shareholders
as we continue to build Metalla into a leading precious metals royalty company."
WHARF MINE
(1)(2)
Wharf has been in production since 1983. Coeur acquired the asset in 2015 from Goldcorp Inc. (now
Newmont Corporation) and subsequently increased plant efficiency and replaced reserves through
exploration. During Coeur's ownership, it has generated cumulative free cash flow from Wharf of
approximately
$175.0 million
. Additionally, Wharf has a mine life of approximately seven years.
ROYALTY MAP
Wharf Royalty Map (CNW Group/Metalla Royalty and Streaming Ltd.)
WHARF RESERVES AND RESOURCES
(1)(2)(3)(4)(5)(6)
Reserves & Resources
Short
Tons
Gold
(000's)
(Oz/t)
(Koz)
Proven Reserves
23,436
0.024
571
Probable Reserves
7,530
0.026
197
Proven & Probable Reserves
30,965
0.025
768
Measured Resources
6,631
0.027
178
Indicated Resources
4,926
0.032
156
Measured & Indicated Resources
11,557
0.029
334
Inferred Resources
2,483
0.033
81
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.
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 Wharf and on file at www.sedar.com and the
Annual Report of Coeur
filed on February 19, 2020
.
(2)
See
Coeur news release filed on February 19, 2020
and
Coeur news release filed on April 22, 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 The Technical Report for the Wharf Operation" dated February 7, 2018.
(7)
See Metalla's condensed consolidated interim financial statements ending August 31, 2017.
TECHNICAL AND THIRD-PARTY INFORMATION
Except where otherwise stated, the disclosure in this press release relating to Wharf 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, waiver of Coeur's pre-emptive
right and completion of a secondary offering, continuance of commercial production and payments
related thereto at Wharf, future development, production, recoveries, cash flow and other
anticipated or possible future developments at Wharf 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. 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:
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 16:53e 22-JUN-20