Metalla Adds Producing Royalty ON Pan American Silver Property and Announces Brokered Private Placement
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN UNITED STATES
METALLA ADDS PRODUCING ROYALTY ON PAN AMERICAN SILVER PROPERTY AND ANNOUNCES
BROKERED PRIVATE PLACEMENT
(All dollar amounts are in United States dollars unless otherwise indicated)
FOR IMMEDIATE RELEASE TSXV: MTA
OTCQX: MTAFF
December 11, 2018
Frankfurt: X9CP
Vancouver, British Columbia: Metalla Royalty & Streaming Ltd. (“Metalla” or the “Company”) (TSXV:
MTA) (OTCQX: MTAFF) (FRANKFURT: X9CP) is pleased to announce that the Company has entered into a
definitive agreement (the "Royalty Purchase Agreement") to acquire from Patagonia Gold S.A.
("Patagonia Gold”) a 1.5% net smelter return royalty (the "Royalty") for $1.5 million in cash (the “Royalty
Transaction”). The Royalty is in connection with certain mining rights located on the Cap-Oeste Sur East
property located in the province of Santa Cruz, Argentina (the "COSE Property") and includes a net smelter
return on all products mined or otherwise recovered from the COSE Property.
The COSE Property is a gold and silver project that is 100% owned by Minera Triton Argentina S.A. (the
“Royalty Payor”), a wholly-owned subsidiary of Pan American Silver Corp (“Pan American Silver”)
(NASDAQ: PAAS; TSX: PAAS).
Brett Heath, President, and CEO of Metalla commented, “Metalla is pleased to add another producing
royalty on a high-grade deposit with proven operator Pan American Silver. This acquisition consolidates
royalties on two separate properties (COSE and previously acquired Joaquin) that represents all of the
future growth at Pan American Silver’s Manantial Espejo mine complex.” Mr. Heath continued, “The
royalty complements our existing portfolio, will increase our cash flow, and will further enhance our strong
growth profile. This is consistent with our long-stated strategy of acquiring existing royalties on quality
assets with tier-one operators.”
COSE PROPERTY
The COSE Property is a fully-permitted mine that has been developed by Pan American Silver at a total
cost of $23.9 million, since Pan American Silver acquired the property from Patagonia Gold for $15 million
in May 2017. Pan American Silver recently reported that COSE project remains on time and within budget
for the commencement of commercial production by the end of 2018. The COSE Property is another high-
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grade satellite deposit within trucking distance to Pan American Silver’s Manantial Espejo mine, offering
synergies similar to their Joaquin project on which Metalla holds a 2.0% NSR royalty.
In 2014, a mineral resource estimate on the COSE Property (See Note 1) was prepared as summarized below:
Category Tonnes (T) Grade (g/t) Metal (Ozs)
Au (Gold) Estimate
Indicated 49,000 27.8 44,000
Inferred 20,000 12.5 8,000
Ag (Silver) Estimate
Indicated 49,000 1,466 2,325,000
Inferred 20,000 721 464,000
Au Equivalent Estimate(2)
Indicated 49,000 52.2 83,000
Inferred 20,000 24.5 16,000
(2) Au Equivalent (g/t) = Au (g/t) + Ag(g/t)/60
ROYALTY PURCHASE AGREEMENT
Pursuant to the Royalty Purchase Agreement, a wholly-owned Argentinian subsidiary of Metalla (“Metalla
Argentina”) and Patagonia Gold will enter into an assignment agreement under which the Royalty will be
transferred from Patagonia Gold to Metalla Argentina. Metalla expects to close the purchase of the
Royalty on or about December 21, 2018. The Royalty Purchase Agreement also includes a right of first
refusal in favour of Metalla to acquire a future net smelter returns royalty that may be granted by , or
received by, Patagonia Gold (or an affiliate of Patagonia Gold) on its Cap-Oeste mine and surrounding
property.
PRIVATE PLACEMENT
Metalla is also pleased to announce it has entered into an agreement with Haywood Securities Inc.
("Haywood"), as lead agent on behalf of a syndicate of agents including PI Financial Corp. and Canaccord
Genuity Corp., (together with Haywood, the " Agents"), in connection with a "best efforts" private
placement offering (the "Offering") of up to 3,846,153 units (the "Units") of the Company, at a price of
C$0.78 per Unit (the "Issue Price"), for gross proceeds to the Company of up to C$3,000,000. Each Unit
will consist of one common share in the capital of the Company (a “Common Share”) and one-half of one
Common Share purchase warrant (each whole Common Share purchase warrant, a " Warrant"). Each
Warrant will entitle the holder thereof to acquire one Common Share of the Company at a price of C$1.17
for a period of 24 months from the closing of the Offering (the “Closing”). In the event that the closing
price of the Common Shares on the TSX Venture Exchange (“TSXV”) (or other stock exchange) is greater
than C$1.50 per Common Share for a period of 10 consecutive trading days at any time after the Closing,
the Company may accelerate the expiry date of the Warrants by written notice (or by way of news release
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in lieu of written notice) to the holders of the Warrants and in such case the Warrants will expire on the
30th day after the date of such notice.
The Company has agreed to grant the Agents an over-allotment option (the “Agents’ Option”) at the Issue
Price, to purchase up to 1,923,076 additional Units, on the same terms and conditions as the Offering,
increasing the size of the Offering to a maximum of C$4,500,000 gross proceeds to the Company. The
Agents’ Option may be exercised in whole or in part at any time up to 48 hours prior to Closing.
The Company has agreed to pay to the Agents a cash fee in an amount equal to 6.0% of the gross proceeds
of the Offering, excluding any proceeds raised from a president’s list of subscribers for up to a maximum
of C$2 million in Units (the “President’s List Subscribers”), in respect of which the Company agrees to pay
a cash fee equal to 3.0% of the aggregate proceeds raised from such President’s List Subscribers. The
Company has also agreed to issue compensation options to the Agents entitling the Agents to purchase
that number of Common Shares equal to 6.0% of the aggregate number of Units issued under the Offering
with an exercise price per Common Share that is equal to the Issue Price until the date that is 24 months
after the Closing (other than with respect to President’s List Subscribers, for which the number of
compensation options issuable shall be reduced to 3.0%).
The net proceeds received by the Company from the Offering will be used to finance the Royalty
Transaction and other royalty and stream acquisitions. The Offering is integral to the Royalty Transaction,
and therefore the Company expects to rely on the 'part and parcel pricing' exemption allowed by the TSXV.
The closing of the Offering is expected to occur on or about December 21, 2018, and is subject to the
receipt of any necessary regulatory approvals, including the approval of the TSXV. All securities issued in
connection with the Offering will be subject to a statutory four-month hold period.
The securities to be offered pursuant to the Offering have not been, and will not be, registered under the
U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. state securities laws, and
may not be offered or sold to, or for the account or benefit of, persons in the United States or U.S. persons
(as such term is defined in Regulation S promulgated under the U.S. Securities Act), absent registration or
any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S.
state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to
buy securities to, or for the account or benefit of, persons in the United States or U.S. persons, nor shall
there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be
unlawful.
LOAN AGREEMENT
Metalla has increased its previously announced (November 7th, 2018) syndicated loan agreement with a
group of arm’s length lenders (the “Lenders”) by $250,000 (the “Loan”) for total proceeds of $2,000,000.
The proceeds from the Loan will be used to fund royalty acquisitions.
Terms of the Loan include interest at a rate of 5.0% per annum, calculated annually, and a term one year
from the date of the advance of the Loan (the "Maturity Date") with early repayment provisions. As an
inducement for providing the Loan, Metalla has agreed to provide the Lenders a 3% origination discount
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and, subject to the approval of the Exchange, to issue an aggregate of 75,000 non-transferable common
share purchase warrants (the “Loan Warrants”). Each Loan Warrant will entitle the holder to acquire one
common share of Metalla at an exercise price of C$0.85 for a period of two years. The Company has also
granted as collateral to the Lender, a corporate guarantee on a wholly-owned subsidiary of Metalla.
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 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 silve r 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
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
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.
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Technical and Third-Party Information
Note 1 – See technical report titled "COSE Gold-Silver Project" dated October 29, 2014, and prepared by Brian Fitzpatrick, BSc, and MAusIMM of Cube Consulting
Pty Ltd for Patagonia Gold PLC (the effective date of the mineral resource estimate is August 22, 2014) (the “COSE Technical Report”). Mineral resources which
are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental,
permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The mineral resources in this estimate were calculated in accordance with
the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the
Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia. For more information about this mineral
resource estimate and other technical and scientific aspects of the COSE Property, including, without limitation, key assumptions, parameters and risks
associated with the COSE Property refer to the COSE Technical Report, a copy of which can be obtained from the Company on request.
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 (in cluding 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 transactions contemplated under the
Royalty Purchase Agreement, Loan Agreement, and Offering, anticipated cash flows upon completion of the Royalty Transaction, Loan Agreement and Offering,
the completion of the Royalty Transaction, the Loan Agreement and the Offering and proposed future transactions Metalla may undertake and their expected
timing. 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 requirement for
regulatory approvals and third party consents, the impact of general business and economic conditions, the absence of control over the mining operations from
which Metalla will purchase gold and receive royalties, including risks related to international operations, government relations and environmental regulation,
the inherent risks involved in the exploration and development of mineral properties; the uncertainties involved in interpreting exploration data; the potential
for delays in exploration or development activities; the geology, grade and continuity of mineral deposits; the possibility that future exploration, development
or mining results will not be consistent with Metalla's expectations; accidents, equipment breakdowns, title matters, labor disputes or other unanticipated
difficulties or interruptions in operations; fluctuating metal prices; unanticipated costs and expenses; uncertainties relating to the availability and costs of
financing needed in the future; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity
price fluctuations; currency fluctuations; regulatory restrictions, including environmental regulatory restrictions; liability, competition, loss of key employees
and other related risks and uncertainties. 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. Some of the disclosure in this press release is based on information publicly disclosed by the owners or operators of these properties and
information/data available in the public domain as at the date hereof, and none of this information has been independently verified by Metalla.
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.