Metalla Announces 2020 Third Quarter Results
Metalla Announces 2020 Third Quarter Results
(All dollar amounts are in Canadian dollars unless otherwise indicated)
TSXV: MTA
NYSE American: MTA
VANCOUVER
,
April 9, 2020
/CNW/ -
Metalla Royalty & Streaming Ltd.
("
Metalla
" or the
"
Company
") (TSXV: MTA) (NYSE American: MTA) announces its operating and financial results for
the third quarter ended
February 29, 2020
. For complete details of the consolidated financial
statements and accompanying management's discussion and analysis for the quarter ended
February 29, 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/
.
"During these unparalleled times, we are monitoring our partners' operations closely" commented
Brett Heath
, President and CEO of Metalla. "With the majority of our royalties on projects in
development being advanced by counterparties with strong balance sheets, we believe Metalla is
well-positioned with a NAV heavy portfolio and strategy that allows for growth in volatile capital
markets. In this unbelievably challenging period, we hope everyone stays healthy and safe."
FINANCIAL HIGHLIGHTS
During the three months ended
February 29, 2020
, the Company:
acquired a 2.0% NSR royalty on future gold production from a portion of the
La Fortuna
deposit
(the "Cantarito Claim") and prospective exploration grounds forming part of the NuevaUnión
project located in the Huasco Province in the Atacama region of
Chile
("NuevaUnión").
NuevaUnión is jointly owned by Newmont Corporation ("
Newmont
") and Teck Resources
Limited ("
Teck
"), and is one of the largest undeveloped copper-gold-molybdenum projects in the
world;
completed a consolidation of its common shares on the basis of one new share for four old
shares (1:4) and the listing of its common shares on the NYSE American;
recognized revenue on 59,143 (2019 - 76,775) attributable silver ounces ("oz.") at an average
realized price of
US$17.40
(2019 -
US$15.23
) and average cash cost of
US$6.39
(2019 -
US$6.23
) per oz. (see non-IFRS Financial Measures);
generated operating cash margin of
US$11.01
(2019 -
US$9.00
) per attributable silver oz. from
the Endeavor silver stream, New Luika Gold Mine ("
NLGM
") stream held by Silverback Ltd.
("
Silverback
"), and other royalty interests (see non-IFRS Financial Measures);
recognized revenue from royalty and stream interests of
$1,264,175
(2019 -
$1,442,006
), net
loss of
$2,081,951
(2019 -
$446,105
), and adjusted EBITDA of negative
$68,387
(2019 -
positive
$490,168
) (see non-IFRS Financial Measures); and
recorded fiscal year-to-date cash flow used in operating activities, before net change in non-
cash working capital items, of
$284,165
(2019 -
$2,178,358
provided) along with its financing
activities, resulted in working capital of
$6,674,988
(
May 31, 2019
-
$862,799
).
UPDATES ON ROYALTIES AND STREAMS
Since
March 2020
, several measures have been implemented in
Canada
,
Australia
,
Argentina
,
Mexico
, and in other jurisdictions where we hold royalties and streams in response to the increased
impact from the coronavirus ("COVID-19"). These measures, which include the implementation of
travel bans, self-imposed quarantine periods and social distancing, have caused material disruption
to business globally resulting in an economic slowdown. Global equity markets have experienced
significant volatility and weakness. Governments and central banks have reacted with significant
monetary and fiscal interventions designed to stabilize economic conditions. There are significant
uncertainties with respect to future developments and impact to the Company related to the COVID-
19 pandemic, including the duration, severity and scope of the outbreak and the measures taken by
governments and businesses to contain the pandemic. While the impact of COVID-19 is expected to
be temporary, the current circumstances are dynamic and the impacts of COVID-19 on our business
operations cannot be reasonably estimated at this time, such as the duration and impact on future
production for our partner operators at their respective mining operations.
Santa Gertrudis
In Q4 of calendar year 2019, Agnico Eagle Mines Limited ("
Agnico
") announced the discovery of a
new high-grade deposit called
Espiritu Santo
, 500 metres southeast of Amelia, including high-grade
shallow mineralization with intersections such as 5.9 grams per tonne ("g/t") gold and 159 g/t silver
over 6.5 metres and 6.8 g/t gold and 42 g/t silver over 3 metres.
Agnico also released an updated resource estimate at
Santa Gertrudis
with its first indicated
resource of 104,000 ounces (5.1 million tonnes at 0.64 g/t gold) and an inferred resource of 1.2
million ounces (22.1 million tonnes at 1.64 g/t gold). The resource estimate does not encompass its
Q4 drilling that extended mineralization along strike, depth and the new discovery at
Espiritu Santo
.
Agnico's largest drill program in
Mexico
was at
Santa Gertrudis
in 2019, drilling a total of 42,778
metres. Drilling completed throughout the 44,145-hectare property was greater than the original
budget of 29,000 metres due to the discovery of the Amelia deposit. Drilling at Amelia deposit
totaled 19,352 metres at the end of 2019 and resulted in an increase in the strike length to a total of
900 metres; the deposit remains open along strike and at depth. Through the success of drilling in
2019, Agnico declared an initial inferred resource estimate of 521,000 ounces of gold at Amelia.
Agnico is planning a 25,000-metre drill program in 2020 to test the new discovery at
Espiritu Santo
and expand the current mineral resources. Geological mapping and surface sampling continue to find
additional target areas for drilling on the property. Notable highlights from Agnico's news release
dated
February 13, 2020
include 13.4 g/t gold over 3.8 metres and 9.6 g/t gold over 6 metres on the
property.
Agnico's disclosure on its website states that it believes the
Santa Gertrudis
project has the potential
to be a similar size operation to La India and is currently evaluating plans to incorporate a heap
leach operation for the low-grade ore and a mill for the high-grade underground ore.
Metalla holds a 2.0% NSR on the
Santa Gertrudis
property.
El Realito
Agnico announced ongoing drilling success at its
El Realito
project located adjacent to its operating
La India Mine in
Sonora, Mexico
. The success has resulted in a new probable reserve estimate of
106,000 ounces of gold and 485,000 ounces of silver (4.7 million tonnes at 0.71 g/t gold and 3.24 g/t
silver).
El Realito
currently has measured and indicated resources in addition to the aforementioned
reserve of 37,000 ounces of gold and 228,000 ounces of silver (1.9 million tonnes at 0.31 g/t gold
and 3.74 g/t silver) and an inferred resource of 4,000 ounces of gold and 24,000 ounces of silver
(0.3 million tonnes at 0.47 g/t gold and 2.64 g/t silver).
Agnico has budgeted
US$3.3 million
for 17,000 metres of drilling at La India for 2020.
Metalla holds a 2.0% NSR on the
El Realito
property.
Following the Government of
Mexico's
decree that all non-essential business suspend operations
until
April 30, 2020
, Agnico announced on
April 2, 2020
that it is ramping down activities at its La
India mining operation and suspending exploration activities in
Mexico
during this period. This could
delay development on the properties underlying the
Santa Gertrudis
and
El Realito
royalty assets
held by the Company.
NuevaUnión
Shortly after announcing our acquisition of a gold royalty on NuevaUnión by press release on
February 18, 2020
, Newmont and Teck, who jointly operate the project, filed an environmental
impact statement for the project with the Chilean authorities. The filing involves a planned
expenditure of
US$152 million
for drilling and other work intended to form the basis for development
of a mining plan.
Metalla holds a 2.0% gold NSR on a portion of the
La Fortuna
project.
COSE & Joaquin
Metalla received its first royalty payment on COSE and Joaquin for production in the fourth quarter
of 2019. The payment was related to mainly development ore shipped to the Manantial Espejo plant.
Pan American Silver Corporation ("
Pan American
") disclosed by news 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 with ore being processed at the Manantial Espejo mill.
Pan American later reported by news release on
March 23, 2020
, operations at Pan American's
COSE and Joaquin mines in
Argentina
have been temporarily suspended in order to comply with a
mandatory national quarantine and on
April 1, 2020
confirmed that temporary suspension was
extended until
April 13, 2020
and could be subject to further extension. On
April 2, 2020
, a new
decree was issued by the government of
Argentina
to expand the list of exemptions that will include
mining production as essential for the Argentine economy. Although mining production is now
permitted again, the impact of these suspensions on mining production levels and resulting cash flow
to Metalla is difficult to predict. COSE and Joaquin were both expected to be ramping up production
in the first half of 2020. While we expect near-term cash flow on Metalla's royalties on these assets
to be lighter than previously anticipated, we believe the Company's balance sheet is more than
adequate to sustain any extended suspension at the COSE and Joaquin mines.
Metalla holds a NSR royalty of 1.5% and 2.0% on COSE and Joaquin mines, respectively.
Fifteen
Mile Stream
St Barbara Limited ("
St Barbara
") disclosed in their news release on
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.
St Barbara plans on releasing an updated project timeline in
June 2020
.
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.
Wasamac
Monarques Gold Corporation ("
Monarques
") has begun the permitting process for the Wasamac
project in
Rouyn-Noranda Quebec
. The expectation is a permitting timeline of 2 years, the project
was selected as a pilot project by the Government of
Quebec
for permitting process support.
Metalla holds a 1.5% NSR on the Wasamac project.
Beaufor
Monarques has outlined their intentions to re-start underground operations at the Beaufor mine in
Val-d'Or, Quebec
within 12-18 months. Concurrently, Monarques will begin a drilling program to
focus expanding resource blocks with a focus on high-grade zones.
Metalla holds a 1.0% NSR on the Beaufor mine.
San Luis
SSR Mining Inc. ("
SSR
") have declared they plan to initiate a detailed mapping program in 2020 at
the
San Luis
project located in
Peru
. The mapping program will focus on the land near the mineral
resources on the project to potentially expand the mineral resource on the project.
Metalla holds a 1% NSR on the
San Luis
project.
Goodfish-Kirana
Warrior Gold Inc. ("
Warrior
") advises that it continues to intersect high-grade gold at the "A" Zone,
Goodfish-Kirana property in
Kirkland Lake, Ontario
. Mineralization in the main zone has been
extended by
100 m
to the east and 50 metres to the west for a total strike length of
300 m
and
vertical depth of 225 metres. Notable intercepts in the drill program include 11.52 g/t gold over 3
metres and 11.25 g/t gold over 1.5 metres in the newly discovered south footwall of "A" zone which
appears to be a subparallel zone to the main zone 50 metres to the south.
Metalla holds a 1% NSR Royalty on the "A" Zone Goodfish-Kirana property.
Lourdes
On
March 10, 2020
, Pucara Resources Corporation ("
Pucara
") outlined their intentions to merge
with Magnitude Mining Ltd. Concurrently, Pucara will raise gross proceeds of
$3.5 million
upon listing
on the TSX-V. Proceeds of the raise will be used on exploration activities on the Lourdes property in
Ayacucho,
Peru
. Field work has outlined four potential targets on the property associated with Au-
Cu-Mo anomalies, a two-phase drill program testing nine drill targets has been recommended.
Metalla holds a 1% NSR on the Lourdes property.
Endeavor
Mine Silver Stream
The operator of the Endeavor Mine in Cobar,
Australia
, CBH Resources Limited ("
CBH
") is currently
running a formal sale process on the Endeavor Mine. The focus at Endeavor is the new discovery of
the Deep Zinc Lode at depth and potential open pit scenario that was originally outlined in a historic
study completed in 2007. The Endeavor Mine will remain on care and maintenance until the sale is
completed.
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
per 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 Au oz. and a 65% increase in its
exploration budget to
US$5 million
over 2019.
Metalla holds a 15% interest in a silver stream on NLGM at an ongoing cost of 10% of the spot
silver price.
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 nine months ended
February 29, 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 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.
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, disclosure regarding the precious metal purchase
agreements and royalty 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, 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, statements regarding 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.
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 18:15e 09-APR-20