Metalla Marks Major Step in Growth by Acquiring 18 Royalties from Alamos Gold
Metalla Marks Major Step in Growth by
Acquiring 18 Royalties from Alamos Gold
TSXV: MTA
OTCQX: MTAFF
Frankfurt
: X9CP
VANCOUVER
,
April 1, 2019
/CNW/ -
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 purchase and sale agreement (the "
Royalty Purchase
Agreement
") to acquire a portfolio of 18 royalties (the "
Royalty Portfolio
") from Alamos Gold Inc.
(NYSE:AGI)(TSX:AGI) and its affiliates (collectively "
Alamos
") for total consideration of
US$8.6
million
, (
CAD$11.5 million
) payable in common shares of the Company ("
Common Shares
"). Certain
royalties in the Royalty Portfolio are subject to rights of first refusal, consents, and future options at
agreed to prices.
TRANSACTION HIGHLIGHTS
Increased Size and Scale
: Acquisition of sixteen (16) royalties and two (2) options to acquire
additional royalties expanding Metalla's portfolio up to forty-three (43) royalties and streams
upon closings;
Advanced-Stage Development Portfolio to Add Significant Future Cash Flow
: Addition of
five advanced development royalties enhancing Metalla's pipeline and future cash flow profile;
Strong Counterparties
: Royalty counterparties include Agnico Eagle Mines Limited ("
Agnico
"),
SSR Mining Inc. ("
SSR
"), Kirkland Lake Gold Ltd, Waterton Global Resource Management,
Buenaventura
, Mineral Alamos Inc. ("
Minera Alamos
"), Monarch Gold Corporation
("
Monarch
"), and others;
New Strategic Shareholder
: Alamos is one of the premier intermediate gold producers in
North
America
with a market cap of
CAD$2.7 billion
;
Long-Term Optionality
: Twelve (12) royalties on exploration-stage properties;
Safe Jurisdictions:
Eight (8) royalties in
Canada
, six (6) royalties in
Peru
, three (3) royalties in
Mexico
and one (1) in
Chile
.
ROYALTY PORTFOLIO: KEY ASSETS
El Realito NSR Royalty (
Sonora, Mexico
)
– a 2% NSR royalty on the
El Realito
property
owned and operated by Agnico located adjacent to its operating La India mine;
Wasamac NSR Royalty (
Rouyn-Noranda, Quebec
)
– a 1.5% NSR royalty on the Wasamac
Mine currently under development by Monarch Gold located 15km west of
Rouyn-Noranda
in
Quebec
;
La Fortuna NSR Royalty (
Durango, Mexico
)
– an option to purchase a 1% NSR royalty on
the La Fortuna Mine currently under development by
Minera Alamos
located in Durango State,
Mexico
;
Beaufor Mine NSR Royalty (
Val d'Or, Quebec
)
- a 1% NSR royalty on the producing Beaufor
Mine operated by Monarch Gold, located 20km northeast of
Val d'Or, Quebec
;
San Luis NSR Royalty (Central,
Peru
)
– a 1% NSR royalty on the
San Luis
property owned
by SSR and is located in the Ancash Department, central
Peru
.
"This transaction marks a major step in growth for Metalla," commented Metalla's President &
CEO Brett Heath. "Today's accretive transaction with Alamos significantly enhances Metalla's
existing portfolio and will drive production growth, cash flow, NAV, and increase our precious
metals optionality. We want to welcome Alamos as a strategic shareholder and believe their
endorsement continues to prove our strategy of being the go-to royalty company for third-party
holders. With 43 royalties now in our portfolio, we believe Metalla is well positioned for an exciting
future."
ROYALTY PORTFOLIO: HIGHLIGHTS
El Realito Property (2% NSR royalty)
El Realito
is a satellite deposit located adjacent to Agnico's operating La India mine in
Sonora,
Mexico
. The mine was put into production in 2014 and produced over 100Koz of gold in 2018 at an
AISC of
US$685
/Oz. Agnico declared its first reserve estimate at
El Realito
of 84Koz of gold and
418Koz of silver in
February 2019
in addition to a resource of 112Koz of gold and 642Koz of silver
reported
April 2018
. As of
December 31, 2018
, Agnico completed 15,879 metres of drilling in 2018
on
El Realito
and expects to drill an additional 10,000 metres for further mine-site exploration and
2,000 metres of infill drilling at
El Realito
and other nearby targets in 2019.
Agnico can buyback 1% of the royalty for
US$4 million
at any time and holds a 60-day right of first
refusal on the full 2% royalty. See Agnico's
press release
dated
February 14, 2019
, and
press release
dated
April 26, 2018
.
Wasamac Property (1.5% NSR royalty)
The Wasamac mine located in
Rouyn-Noranda Quebec
is a past-producing mine currently under
development by Monarch. In December of 2018, Monarch Gold released a feasibility study outlining
an underground operation that will produce an average of 142Koz of gold over an 11-year mine life
at an AISC of
US$630
/Oz. The mine is estimated to generate an after-tax NPV at a 5% discount
rate of
CAD$311 million
and generate an 18.5% IRR. Monarch Gold anticipates process plant
commissioning will commence in the second quarter of 2022 and will ramp up to full mine production
by the fourth quarter of 2022. Monarch currently has a reserve estimate of 1.77Moz grading 2.56g/t
gold within a measured and indicated resource of 2.59Moz grading 2.70 g/t gold.
Monarch has the right to buy back 0.5% of the NSR for a one-time payment of
CAD$7.5 million
at
any time.
See Monarch's
press release
, and the technical report titled "Feasibility Study of the
Wasamac Project" prepared by RPA with an effective date of
December 3, 2018
.
La Fortuna Property (1% NSR royalty)
La Fortuna
is high-grade mine currently being moved toward a production decision by
Minera
Alamos
. In a Preliminary Economic Assessment released in
August 2018
,
Minera Alamos
published
a study that envisions an open pit milling operation that will produce an average of 50Koz of gold-
equivalent ounces over a 5-year mine life at an AISC of
US$440
/Oz. The study estimates an after-
tax NPV at a 7.5% discount rate of
US$69.8M
, IRR of 93% and an 11-month payback.
Minera
Alamos
currently has a measured and indicated resource estimate at
La Fortuna
of 3.5Mt grading
2.78g/t gold, 16.51g/t silver and 0.22% copper.
Metalla secured an option to purchase the 1% NSR royalty from Alamos Gold for
US$0.6 million
for
a period of two years.
See Minera Alamos'
press release
, and the technical report prepared by CSA
Global Consultants and titled "Mineral Resource Update and Preliminary Economic Assessment of
the La Fortuna Gold Project, Durango State,
Mexico
" with an effective date of
December 12, 2018
.
Beaufor Property
(1% NSR royalty)
Beaufor is an operating underground gold mine in
Val-d'Or, Quebec
operated by Monarch. Since
1933, Beaufor produced more than 1.16 Moz at a historical grade of 7.5g/t gold. Production
activities have been extended to
April 2019
with the goal to increase the high-grade resource via
drilling. Beaufor currently has a reserve of 30.6Koz of gold grading 6.83g/t within an M&I resource of
85.4Koz of gold grading 7.67g/t.
For more information, please see Monarch's
press release
, and the technical report titled "NI 43-101
Technical Report on the Mineral Resource and the Mineral Reserve Estimates of the Beaufor Mine"
prepared InnovExplo Inc. with an effective date of
September 30, 2017
.
San Luis Property
(1% NSR royalty)
San Luis
is owned and operated by SSR and located in the Ancash Department in central
Peru
. A
feasibility study on the
San Luis
project was completed in the second quarter of 2010, outlining a
3.5-year underground mine plan focused on the high-grade, silver-gold Ayelén vein. The project has
a mineral reserves of 7.2 million ounces of silver at an average grade of 447.2 g/t and 0.29 million
ounces of gold at a grade of 18.06 g/t as at
December 31, 2016
, and indicated mineral resources of
9.0 million ounces of silver at an average grade of 578.1 g/t and 0.35 million ounces of gold at a
grade of 22.40 g/t. Inferred mineral resources of 0.2 million ounces of silver at an average grade of
270.1 g/t.
For more information, please see
Feasibility Study published on
June 4, 2010
, and
Resource Estimate published on
January 9, 2009
(Effective as at
December 31, 2016
).
PORTFOLIO LIST
Asset
Operator
Country
Stage
Terms
El Realito
Agnico Eagle
Sonora, Mexico
Development
2% NSR
1
La Fortuna
Minera Alamos
Durango, Mexico
Development
Option - 1% NSR
Wasamac
Monarch Gold
Rouyn-Noranda, Quebec
Development
1.5% NSR
2
Beaufor Mine
Monarch Gold
Val d'Or, Quebec
Production/Dev
1% NSR
3
San Luis
SSR Mining
Peru
Development
1% NSR
Big Island
Copper Reef Mining
Flin Flon, Manitoba
Exploration
2% NSR
Biricu
Guerrero Ventures
Guerrero, Mexico
Exploration
2% NSR
Boulevard
Independence Gold
Yukon, Ontario
Exploration
1% NSR
Camflo Northwest
Monarch Gold
Val d'Or, Quebec
Exploration
1% NSR
Edwards Mine
Waterton
Wawa, Ontario
Exploration
1.25% NSR
Goodfish Kirana
War Eagle Mining
Kirkland Lake, Ontario
Exploration
1% NSR
Kirkland-Hudson
Kirkland Lake Gold
Kirkland Lake, Ontario
Exploration
2% NSR
Pucarana
Buenaventura
Peru
Exploration
Option -1.8% NSR
Capricho
Pucara Resources
Peru
Exploration
1% NSR
Lourdes
Pucara Resources
Peru
Exploration
1% NSR
Santo Tomas
Pucara Resources
Peru
Exploration
1% NSR
Guadalupe/Pararin
Pucara Resources
Peru
Exploration
1% NSR
Choquelimipie
Vilacollo
Chile
Exploration
1%-5%
1
Subject to a 60-day right of first refusal period, 1% can be repurchased for US$4 million
2
0.5% can be repurchased for CAD$7.5 million
3
Production expected to halt in Q219
POST CLOSING CAPITAL STRUCTURE
As consideration for the Royalty Portfolio, Metalla will issue a total of 8,239,698 Common Shares
priced at
CAD$1.30
per share for a total of
US$8 million
. The price of the Common Shares is based
on a ten (10) day volume weighted average price of the Common Shares traded on the TSX Venture
Exchange (the "
Exchange
"). Metalla has secured an option, exercisable by the Company on
completion of diligence, to complete the acquisition of the
La Fortuna
royalty for a period of two
years for an additional
US$0.6 million
.
After the completion of the transaction, Alamos will hold approximately 6.3% of the issued and
outstanding common shares of Metalla. It is expected that Metalla will have a total of approximately
131.5 million shares issued and outstanding following the closing of the transaction. The Common
Shares issued to Alamos will be subject to a statutory four-month and one day hold period from the
date of their issuance and will be subject to restrictions on transfer on sales greater than 1.0% of
Metalla shares.
ADVISORS AND COUNSEL
Haywood Securities Inc. acted as financial advisor, and Gowling WLG (
Canada
) LLP acted as legal
counsel for Metalla in connection with the transaction.
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 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.
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) on 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 often 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
timing and completion of the transaction, Exchange acceptance of the transaction, any exercise of
options on royalties granted to Metalla by Alamos, anticipated cash flows upon completion of the
transaction, future financial reporting by Metalla, the receipt of payments from Metalla's mining
royalty and streaming portfolio, the requirement for regulatory approvals and third-party consents,
the Company's financial guidance, outlook, proposed plans for acquiring additional stream and
royalty interests and the potential of such streams and royalty interests to provide returns and the
completion of mine expansion under construction phases at the mines or properties that the
Company holds an interest in. 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.
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 08:30e 01-APR-19