Metalla Announces Friendly Acquisition of Valgold and Royalty ON the Garrison Project
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METALLA ANNOUNCES FRIENDLY ACQUISITION OF
VALGOLD AND ROYALTY ON THE GARRISON PROJECT
May 10, 2018
Vancouver, British Columbia and Toronto, Ontario - Metalla Royalty & Streaming Ltd. (“Metalla”)
(TSXV:MTA) (OTCQX:MTAFF) (Frankfurt:X9CP) and ValGold Resources Ltd. (“ValGold”)
(TSXV:VAL) are pleased to announce that they have entered into a definitive arrangement agreement (the
"Arrangement Agreement") whereby Metalla will acquire all of the issued and outstanding common shares
of ValGold (the "Arrangement"). Under the terms of the Arrangement Agreement, all of ValGold’s issued
and outstanding common shares will be exchanged for Metalla common shares on the basis of 0.1667 of a
Metalla common share for each ValGold common share (the "Exchange Ratio"). All currency is in
Canadian Dollars unless otherwise noted.
The Exchange Ratio implies a consideration of $0.13 per ValGold common share, based on the 40-day
volume weighted average price (“VWAP”) of the Metalla common shares on the TSX Venture Exchange
(“TSXV”) for the period ending May 9, 2018. This represents a 79% premium to the 40-day VWAP of
ValGold common shares and 62.5% premium as of market close on May 9, 2018, on the TSXV. The
undiluted equity value of the transaction is approximately $7.2 million.
BENEFITS TO METALLA SHAREHOLDERS
• Acquisition of a 2% NSR royalty on the Garrison Project in a world-class mining district in Ontario,
Canada
• Addition of a proven mine builder and high-quality counterparty Osisko Mining Inc. (TSX:OSK)
the management team largely responsible for the discovery, development, financing, and
commissioning of the Canadian Malartic Mine
• Enhances and expands growth-profile with a royalty on a gold development asset with
approximately 1.2 million oz. measured and indicated resource and a 0.8 million oz. inferred
resource
• Maintains cash balance through an all-share transaction
• Accretive to existing Metalla shareholders on a per share basis
BENEFITS TO VALGOLD SHAREHOLDERS
• An immediate premium of 79% to Valgold’s 40-day VWAP
• Enhanced market liquidity
• Access to Metalla’s dividend stream and policy on closing
• Significant asset diversification from Metalla’s portfolio of producing, development, and
exploration royalties and streams with top-tier operators
• Maintains upside exposure to the Garrison Project through a Metalla ownership position and
expected re-valuation of the related royalty through enhanced price discovery reflected in Metalla
shares
Brett Heath, President, and CEO of Metalla, stated, "The acquisition of ValGold is an exciting transaction
that strengthens Metalla’s development pipeline of royalties and adds a top-tier operator in a world-class
mining jurisdiction with significant potential upside. This acquisition is consistent with our long-term
strategy of executing accretive deals in known mining camps with strong counterparties.”
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Kevin Snook, Chairman, and CEO of ValGold stated, “Metalla’s management team and board has built an
impressive and diversified royalty and streaming portfolio in only 20 months. ValGold shareholders can
look forward to seeing the full value of the Garrison royalty recognized in Metalla’s share price as well as
improved market liquidity and exposure to Metalla’s dividend and diversified royalty and streaming assets”.
GARRISON ROYALTY
ValGold holds a 2% net smelter return (“NSR”) royalty on certain claims of the Garrison Project (the
“Garrison Royalty”), which covers the Garrcon and Jonpol properties, and the eastern portion of the 903
Zone. The Garrison Project is located approximately 100 kilometers east of Timmins Ontario, and 40
kilometers north of Kirkland Lake. It resides along the famous Golden Highway in the Timmins and
Kirkland Lake region which has historically produced over 100 million ounces of gold.
The Garrison Project is 100% owned by Osisko Mining Inc. (“Osisko”) and consists of a portfolio of
properties spanning a 50 km distance along the Destor-Porcupine Fault Zone, encompassing 16 non-
contiguous properties including the Garrcon and Jonpol properties, 903 Zone, and Buffonta, and Golden
Pike advanced exploration properties.
The Garrison Royalty covers 35 patented mining claims and three deposits known as the Garrcon and Jonpol
properties, and the eastern portion of the 903 Zone. These claims were the subject of a National Instrument
(NI) 43-101 resource estimate dated March 2014 by ACA Howe International Inc. which estimated the
mineral resource according to CIM standards at the Garrcon and Jonpol properties to be:
Domain Category Tonnes Au Grade
(g/tonne)
Au (troy
oz)
Garrcon Measured 15,100,000 1.07 521,000
Garrcon and Jonpol Total Indicated 14,972,000 1.40 676,000
Garrcon and Jonpol Total Measured + Indicated 30,072,000 1.24 1,197,000
Garrcon and Jonpol Total Inferred 7,873,000 3.19 808,000
For further details, see technical report entitled “Technical Report on the Golden Bear Project - Garrison Property Larder Lake Mining Division
Garrison Township, Ontario, Canada for Northern Gold Mining Inc.” dated March 3, 2014, filed by Northern Gold Mining Inc. on May 2, 2014
and available under Northern Gold Mining Inc.’s profile on SEDAR. This is a summary table for the Garrison Property (Garrcon and Jonpol
deposits). These mineral resources were estimated using a 0.4 gpt Au cut -off grade for open pit and 1.5 gpt Au for underground resources .
Moreover, all raw assays were top-cut to 112 g/tonne Au and 114 g/tonne Au for higher grade and lower grade domains, respectively. Mineral
resources are not mineral reserves and by definition do not demonstrate economic viability. This mineral resource estimate includes inferred mineral
resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be
categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to the measured and indicated
resource categories through further drilling, or into mineral reserves, once economic considerations are applied. 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 of the end of January 2018, Osisko has completed 85,000 meters of new drilling since the 2014 resource
update to complement the 108,000 meters drilled at Garrison by previous operators. Osisko has announced
that it expects to release an updated resource estimate in July 2018.
BOARD OF DIRECTORS' RECOMMENDATION
The Arrangement Agreement has been unanimously approved by the board of directors of each of Metalla
and ValGold. The ValGold board of directors recommends that ValGold shareholders vote in favour of the
Arrangement at the special meeting of shareholders to be called to approve the Arrangement (the “Special
Meeting”). Evans & Evans, Inc. has provided an opinion to the board of directors of ValGold, stating that,
as of the date of the opinion and based upon and subject to the assumptions, limitations, and qualifications
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set forth therein, the consideration to be received by the holders of ValGold common shares pursuant to the
Arrangement is fair, from a financial point of view to such holders.
Certain executive officers and directors of ValGold have entered into lockup agreements and have agreed
to vote their ValGold securities in favour of the Arrangement.
TRANSACTION SUMMARY
Under the terms of the Arrangement Agreement, ValGold shareholders will receive 0.1667 common shares
of Metalla for each ValGold common share held as of the effective date of the Arrangement. Holders of
ValGold stock options outstanding at closing will receive Metalla common shares on the basis of the in-
the-money value of their ValGold options. Pursuant to the transaction, Metalla will issue an aggregate of
approximately 9.5 million common shares to ValGold shareholders and optionholders. Upon completion
of the Arrangement, current ValGold shareholders and optionholders will own approximately 11.2% of the
issued and outstanding common shares of Metalla. Under the Arrangement, all existing warrants of
ValGold will become exercisable to acquire Metalla common shares at exercise prices adjusted by the
Exchange Ratio.
The Arrangement will be effected by way of a plan of arrangement under the Business Corporations Act
(British Columbia). The Arrangement will require approval by 66 2/3rds percent of the votes cast at the
Special Meeting and any additional shareholder approvals which may be required under Multilateral
Instrument 61-101 - Protection of Minority Security Holders in Special Transactions. In addition to
shareholder and court approvals, the Arrangement is subject to applicable regulatory approvals (including
approval of the TSX Venture Exchange) and the satisfaction of certain other closing conditions customary
in transactions of this nature.
The Arrangement Agreement includes customary provisions including non -solicitation of alternative
transactions, right to match superior proposals and fiduciary-out provisions. In addition, ValGold has
agreed to pay a termination fee to Metalla of $600,000 in the event of a termination of the Arrangement
Agreement due to the occurrence of certain events. Metalla and ValGold have each agreed to pay a
$150,000 expense reimbursement fee to the other party as reimbursement for certain expenses upon
termination of the Arrangement Agreement due to the occurrence of certain other specified events.
TIMING
Full details of the proposed transaction will be included in ValGold’s management information circular,
which is expected to be mailed to shareholders in early June 2018. It is anticipated that the Special Meeting
and the closing of the proposed transactions will take place in mid-July 2018.
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. Metalla’s
strong foundation of current and future cash-generating asset base, combined with an experienced team
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gives Metalla a path to become one of the leading gold and silver companies for the next commodities
cycle. For further information, please visit Metalla’s website at www.metallaroyalty.com.
ABOUT VALGOLD
ValGold is a royalty and mineral exploration and development company based in Ontario, which holds a
2% net smelter return royalty on certain claims on the Garrison Project on the “Golden Highway”, east of
Timmins, Ontario, a 100% interest in the Tower Mountain Gold Project near Thunder Bay, Ontario, and
exploration properties in Venezuela. For further informat ion, please visit ValGold’s website at
www.valgold.com and filings on SEDAR.
ON BEHALF OF THE BOARD OF ON BEHALF OF THE BOARD OF
METALLA ROYALTY AND STREAMING LTD. VALGOLD RESOURCES LTD.
Brett Heath, President and CEO Kevin Snook, Chairman and CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSXV) accept responsibility for the adequacy or accuracy of this release.
CONTACT INFORMATION
Metalla Royalty & Streaming Ltd.
Brett Heath, President & CEO
Phone: 604-696-0741
Email: [email protected]
Website: www.metallaroyalty.com
Valgold Resources Ltd.
Kevin Snook, Chairman & CEO
Tel: 844-230-6000
Email: [email protected]
Rod Whyte, Director (London, England)
Tel: (44) 207-736-2321
Jonathon Snook
Tel: 905-325-4584
Website: www.valgold.com
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”,
“scheduled”, “estimates”, “projects”, “intends”, “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 information in this press release includes, but is not limited to
Metalla, ValGold and their respective shareholders; the timing and receipt of required shareholder, court, stock exchange and
regulatory approvals for the Arrangement; the ability of ValGold and Metalla to satisfy the other conditions to, and to complete,
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the Arrangement, the anticipated timing of the mailing of ValGold’s information circular regarding the Arrangement; liquidity,
enhanced value and capital markets profile of Metalla; future growth potential for Metalla, ValGold and their respective businesses;
estimates regarding future profitability, release of a new resource estimate on the Garrison property, and expected re-valuation of
Garrison royalty.
In respect of the forward-looking statements and forward-looking information concerning the anticipated completion of the
proposed Arrangement and the anticipated timing for completion of the Arrangement, the parties have provided such statements in
reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the time required to prepare
and mail shareholder meeting materials, including the required information circular; the ability of the parties to receive, in a timely
manner, the necessary shareholder, court, stock exchange and regulatory approvals; and the ability of the parties to satisfy, in a
timely manner, the other conditions to the closing of the Arrangement. These dates may change for a number of reasons, including,
but not limited to, unforeseen delays in preparing meeting materials; inability to secure necessary shareholder, court, stock exchange
and regulatory approvals in the time assumed or the need for additional time to satisfy the other conditions to the completion of the
Arrangement. Accordingly, readers should not place undue reliance on the forward-looking statements and forward-looking
information contained in this news release concerning these times and dates.
Forward-looking statements and forward-looking information relating to any future mineral production, liquidity, enhanced value
and capital markets profile of Metalla, future growth potential for Metalla, ValGold and their respective businesses, future
exploration plans, which are based on such management's experience and perception of trends, current conditions and expected
developments, and other factors that the applicable parties' management believes are relevant and reasonable in the circumstances,
but which may prove to be incorrect. Assumptions have been made regarding, among other things, the price of silver, gold, and
other metals; costs of development and production; Metalla and/or ValGold’s ability to operate in a safe and effective manner and
their ability to obtain financing on reasonable terms.
These statements reflect the parties’ respective current views with respect to future events and are necessarily based upon a number
of other assumptions and estimates that, while considered reasonable by the respective parties, are inherently subject to significant
business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown,
could cause actual results, performance or achievements to be materially different from the results, performance or achievements
that are or may be expressed or implied by such forward-looking statements or forward-looking information and the parties have
made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: satisfaction
or waiver of all applicable conditions to closing of the Arrangement including, without limitation, receipt of all necessary
shareholder, court, stock exchange and regulatory approvals or consents and lack of material changes with respect to Metalla and
ValGold and their respective businesses, all as more particularly set forth in the Arrangement Agreement; the synergies expected
from the Arrangement not being realized; business integration risks; fluctuations in general macro -economic conditions;
fluctuations in securities markets and the market price of Metalla’s common shares. In addition, the failure of a party to comply
with the terms of the Arrangement Agreement may result in that party being required to pay a fee to the other party, the result of
which could have a material adverse effect on the paying party’s financial position and results of operations and its ability to fund
growth prospects and current operations. Readers are cautioned against attributing undue certainty to forward-looking statements
or forward-looking information. Although the parties have attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be anticipated, estimated or intended. The parties do not intend
and do not assume any obligation, to update these forward-looking statements or forward-looking information to reflect changes
in assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by
applicable law.