Metalla Announces 2020 Second Quarter Results
Metalla Announces 2020 Second Quarter
Results
(All dollar amounts are in Canadian dollars unless otherwise indicated)
TSXV: MTA
NYSE American: MTA
VANCOUVER
,
Jan. 23, 2020
/CNW/ -
Metalla Royalty & Streaming Ltd.
("
Metalla
" or the
"
Company
") (TSXV: MTA) (NYSE American: MTA) announces its operating and financial results for
the second quarter ended
November 30, 2019
. For complete details of the consolidated financial
statements and accompanying management's discussion and analysis for the quarter ended
November 30, 2019
, 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/
.
"In our second fiscal quarter of 2020, Pan American Silver made significant advancements in
moving the Joaquin and COSE mines toward production. This included the first shipment of
development ore to the Manantial Espejo mill. We anticipate this will result in cash flow to Metalla
starting in the first calendar quarter of 2020 from Joaquin and COSE" commented
Brett Heath
,
President, and CEO of Metalla Royalty. "We are excited about the progress Agnico Eagle has
made on
Santa Gertrudis
and
El Realito
and expect increases in reserves and resources on the
majority of the key royalty assets in our portfolio in the first calendar quarter of 2020."
"On
January 8, 2020
, Metalla completed a successful listing on the NYSE American, a major
milestone for the Company. This has significantly increased Metalla's market profile, liquidity,
access to larger institutional investors, and a more diverse group of retail investors. We are
looking forward to capitalizing on the benefits the NYSE American platform provides Metalla,
enhancing our ability to scale our business through more accretive royalty transactions in 2020."
FINANCIAL HIGHLIGHTS
During the three months ended
November 30, 2019
, the Company:
shipped 103,285 (2018 - 57,814) attributable silver ounces ("oz.") at an average realized price
of
US$17.43
(2018 -
US$15.06
) and average cash cost of
US$7.21
(2018 -
US$5.90
) per oz.
(see non-IFRS Financial Measures);
generated operating cash margin of
US$10.22
(2018 -
US$9.16
) per attributable silver oz. from
the Endeavor silver stream and New Luika Gold Mine ("
NLGM
") stream held by Silverback Ltd.
("
Silverback
") (see non-IFRS Financial Measures);
had 61,296 (
May 31, 2019
- 59,515) attributable silver oz. remaining and to be sold in
subsequent periods;
recognized revenue from stream interest of
$2,137,581
(2018 -
$1,623,140
), income from
operations of
$729,190
(2018 -
$578,898
), net loss of
$1,054,540
(2018 -
$496,948
), and
adjusted EBITDA of
$400,539
(2018 -
$609,163
) (see non-IFRS Financial Measures); and
recorded fiscal year-to-date cash flow from operating activities, before net change in non-cash
working capital items, of
$129,167
(2018 -
$1,895,630
) along with its financing activities,
resulted in working capital of
$7,167,746
(
May 31, 2019
-
$862,799
).
UPDATES ON ROYALTIES AND STREAMS
COSE & Joaquin
Pan American Silver Corp. ("
Pan American
") has disclosed by new release on
January 15, 2020
that pre-production underground development at both COSE and Joaquin mines progressed during
2019 along with the purchase of the necessary mining equipment and the completion of the
infrastructure facilities. Pan American stated that both mines will enter the production phase in early
2020 and there is no further project capital spending anticipated.
Metalla holds a net smelter return ("
NSR
") royalty of 1.5% and 2.0% on COSE and Joaquin mines,
respectively.
El Realito
Agnico Eagle Mines Limited ("
Agnico
") disclosed in their news release on
October 23, 2019
that
recent drilling at
El Realito
project located adjacent to the operating La India mine in
Sonora Mexico
suggests there could be an improved strip ratio and increased mineral resources inside the current
life of mine reserve pit design. The highlight of the pit expansion drilling is 1.3 g/t gold and 4 g/t silver
over 17.7 metres. At the end of the third quarter of 2019, 11,278 metres were drilled at
El Realito
.
The company also drilled its first two exploration holes at the Los Tubos target directly south of the
El Realito
deposit during the third quarter of 2019.
Metalla holds a 2.0% NSR on the
El Realito
property.
Santa Gertrudis
Agnico conducted its largest drill program in
Mexico
at
Santa Gertrudis
in 2019, drilling a total of
35,709 metres as of the end of the third quarter. Drilling was completed throughout the 42,000-
hectare
Santa Gertrudis
property greater than the 29,000 metres that were budgeted due to the
success at the Amelia deposit discovery. Drilling at the Amelia deposit totaled 15,056 metres at the
end of Q3 2019 and resulted in an increase in the strike of the Amelia deposit to a total of 800
metres; the deposit remains open along strike and at depth. Notable highlights from Agnico's news
release dated
October 23, 2019
include 6.4 g/t gold over 7 metres and 9.6 g/t gold over 6 metres.
Metalla holds a 2.0% NSR on the
Santa Gertrudis
property.
Agnico will be releasing further updates on
El Realito
and
Santa Gertrudis
in their year-end update
on
February 14, 2020
, along with expected updated mineral resource estimates for both assets.
Metalla expects an increase to the resource base for both
Santa Gertrudis
and
El Realito
.
Fifteen
Mile Stream
St Barbara Limited ("
St Barbara
") disclosed in their news release
January 22, 2020
, they continue
to have exploration success at Fifteen Mile Stream as it continues to enlarge the planned reserve
pits and delineate potential satellite pits along trend.
At Seloam Brook, 700 metres west of the Plenty deposit, significant mineralization was intercepted
suggesting the potential to be a pit extension of the main Fifteen Mile Stream proposed pits. Notable
near surface highlights include 1.19 g/t over 6 metres and 2.85 g/t over 3 metres.
At the main
Hudson and Egerton MacLean
zones, shallow high-grade mineralization has been
discovered that will aid in connecting the Egerton and Hudson pits. The best result was 3.21 g/t at 6
metres. West of Egerton, St Barbara intercepted lateral continuity of shallow mineralization 100
metres west of the current resource with a 1.98 g/t over 7 metres. East of Egerton-MacLean and
west of 149, the gap continues to be shortened as mineralization was intercepted at 6.84 g/t over 1
metre.
At the 149 deposit, drilling continued to confirm the potential for 149 to be a satellite pit for Fifteen
Mile Stream. Extensional drilling 60 metres to the east intercepted 0.86 g/t over 56 metres and 1.03
g/t over 16 metres near surface. Drilling to the south of identified a disseminated halo of
mineralization extending over 230 metres of strike length with notable hits of 1.41 g/t over 6 metres
and 1.39 g/t over 11 metres. 400 metres east of the 149 Deposit, initial results suggest that
mineralization may be extended into a new zone call 149 extension intercepting 1.31 g/t over 22
metres.
Metalla holds a 1% NSR on the Hudson, Egerton-Maclean, 149 and the majority of the Plenty
deposit and a 3% NSR on the remainder of Plenty and Seloam Brook.
Endeavor
Mine Silver Stream
(1)
The operator of the Endeavor Mine in Cobar,
Australia
, CBH Resources Limited ("
CBH
"), has
completed their internal studies and reports that has outlined a substantial mineralized zone known
as the Deep Zinc Lode "
DZL
", located roughly 200 meters below the limits of the current mine
infrastructure. The silver stream held by Metalla covers 100% of the silver within the DZL mineralized
zone. CBH has disclosed to Metalla that the DZL will add an indicated resource of 1.93 million
ounces of silver (1.37 million tonnes @ 43.8 g/t) and inferred resource of 1.68 million ounces of
silver (1.31 million tonnes @ 39.9 g/t) with expected recoveries of 90% on zinc and 30% on silver.
June 2019 DZL Resources
Mt
Zn%
Pb%
Ag g/t
Pb+Zn%
Ag Moz
Indicated
1.37
8.2
0.7
43.8
8.9
1.9
Inferred
1.31
7.3
0.8
39.9
8.1
1.7
Source: CBH Resources, reported net of a 5% Pb + Zn cutoff
CBH has estimated a total of
US$28.7M
in capital and operating costs will need to be spent before
the start of production on the DZL and timeline of approximately 18 months to complete
development. CBH has initiated a formal sale process that is now underway for the Endeavor mine
which is expected to be completed in the first half of 2020. As part of this process CBH has further
implemented a reduction in the workforce and the mine has been placed on care and maintenance
until a decision is made to develop the DZL.
Metalla has the right to buy 100% of the silver production up to 20 million ounces from the Endeavor
Mine for an operating cost contribution of
US$1.00
each ounce of payable silver, indexed annually
for inflation, plus a further increment of 50% of the silver price in excess of
US$7.00
per oz.
New Luika Silver Stream
Shanta Gold Limited ("
Shanta
") disclosed in their news release on
January 16, 2020
that their
annual production for 2019 totaled 84.5 thousand oz. of gold, ahead of their guidance of 80-84
thousand oz. for the year at NGLM located in
Tanzania
. Shanta also announced that it added 135
thousand oz. of gold reserves to the current mine plan during the year, net of depletion.
For 2020, Shanta has disclosed guidance of 80-85 thousand oz. and a 65% increase in its
exploration budget to
US$5M
over 2019.
Metalla holds a 15% interest in a silver stream on NLGM at an ongoing cost of 10% of spot.
Zaruma
Titan Minerals Ltd. ("
Titan
") announced by news release on
January 14, 2020
they have been
successful in their offer to purchase all of the issued and outstanding common shares of Core Gold,
the owner of the Zaruma mine in
Ecuador
. Titan has stated they will become an emerging Latin
American focused gold explorer, developer and producer with greater scale
.
Metalla holds a 1.5% NSR on the Zaruma mine.
Dufferin East
On
November 18, 2019
Aurelius Minerals Inc. announced an agreement to acquire the Dufferin gold
mine from Sprott Resource Lending for
US$8M
in total consideration, which transaction is expected
to close in the first quarter of 2020.
Metalla holds a 1.0% NSR on the Dufferin East deposit.
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 six months ended
November 30, 2019
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 silver, average realized
price per ounce of attributable silver, and cash margin. Average cost per ounce of attributable
silver is calculated by dividing the cash cost of sales, plus applicable selling charges, by the
attributable ounces sold. 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 silver from the average realized
price per ounce of attributable silver. 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.
Note 1 – The disclosure herein and relating to the Endeavor mine is based on information
prepared and disclosed by CBH and their parent company TOHO Zinc and can be found at
http://www.toho-zinc.co.jp/
. The information and data is available in the public domain as at the
date hereof, and none of this information has been independently verified by the Company or is
supported by a technical report prepared in accordance with National Instrument 43-101 Standards
of Disclosure for Mineral Projects. While the Company has requested additional information from
CBH, it has not received access to the necessary data from CBH and is not able to obtain the
necessary information from the public domain to prepare a technical report. Mineral resources are
not mineral reserves and by definition do not demonstrate economic viability. Readers are
cautioned that inferred resources have a great amount of uncertainty as to their existence and as to
whether they can be mined economically. As a result, the Company cautions readers that there is
no certainty that the projected silver production will be realized. Specifically, as a stream holder,
the Company has limited, if any, access to the Endeavor mine. The Company is dependent on (i)
CBH and their qualified persons to provide information to the Company, or (ii) publicly available
information to prepare disclosure pertaining to the Endeavor mine and generally has limited or no
ability to independently verify such information. Although the Company 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.
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
exploration potential, future development, production, recoveries and other anticipated or possible
future developments on the properties on which the Company holds royalty and stream interests or
relating to the companies owning or operating such properties; current and potential future
estimates of mineral reserves and resources; future cash generation; the timing of the sale or
other disposition of companies or mining properties; and the potential for Metalla to become one of
the leading precious metal royalty and streaming companies. 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; 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.
View original content to download multimedia:
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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 16:30e 23-JAN-20