Metalla Reports Financial Results for Fiscal 2018
Metalla Reports Financial Results for Fiscal
2018
TSXV: MTA
OTCQX: MTAFF
Frankfurt
: X9CP
VANCOUVER
,
Sept. 27, 2018
/CNW/ -
Metalla Royalty & Streaming Ltd.
("
Metalla
" or the
"
Company
") (TSXV: MTA) (OTCQX: MTAFF) (FRANKFURT: X9CP) announces its financial results
for the fiscal year 2018. For complete details of the consolidated financial statements and
accompanying management's discussion and analysis for the year ended
May 31, 2018
, please see
the Company's filings on SEDAR or the Company's website (
www.metallaroyalty.com
).
Brett Heath
, President and CEO of Metalla commented, "During the 2018 fiscal year, Metalla's
revenue and cash flow grew significantly with several royalties added to the portfolio. The Company
received regulatory approval for its common shares to trade as a Tier 1 TSX-V Issuer and declared
a monthly dividend." Mr. Heath continued, "All of these actions position the Company for our next
stage of growth as we continue to scale the business by accretive acquisitions that will maximize
value for shareholders and provide leverage to gold and silver prices."
All dollar amounts are in Canadian dollars unless otherwise indicated.
FISCAL 2018 FINANCIAL HIGHLIGHTS
During the year ended
May 31, 2018
and subsequently, the Company:
shipped and provisionally invoiced 429,315
(1)(2)
attributable silver ounces ("
oz.
") at an average
price of
US$16.74
per oz. for
US$7,186,541
or
$8,911,310
(see non-IFRS Financial Measures);
had total production of 519,791
(1)(2)
attributable silver oz. for the fiscal year that included
90,476 attributable silver oz. remaining on
May 31, 2018
to be sold in subsequent periods;
generated cash margin of
US$4,154,857
(1)(2)
(equivalent to
$5,152,023
) or
US$9.68
per
attributable silver oz. towards the Company's operating cash flows from the Endeavor silver
stream and New Luika Gold Mine ("
NLGM
") stream held by Silverback Ltd. ("
Silverback
") (see
non-IFRS Financial Measures);
recorded revenue from stream interest of
$7,368,331
(2017 - $Nil) and net loss of
$2,561,756
(2017 net loss of
$3,238,684
), resulting in working capital of
$4,661,792
(2017 -
$1,216,319
)
as at
May 31, 2018
;
completed the acquisition of an additional 1.0% on the Hoyle Pond Extension Royalties;
completed the acquisition of a portfolio of royalty and stream interests from Coeur Mining Inc.
("
Coeur
") that included the Endeavor Silver Stream, Joaquin 2.0% NSR, Zaruma 1.5% NSR,
and Puchuldiza 1.5% NSR;
completed the acquisition of a 2.0% NSR royalty on Agnico Eagle Mine Limited's Akasaba West
Project;
announced the acquisition, through a plan of arrangement, of Valgold Resources for the 2.0%
NSR on Osisko Mining Inc.'s Garrison Project;
provided a mine plan update for its Endeavor Mine silver stream on production through
December 2020
operated by CBH Resources Ltd. ("
CBH
") (please see
news release dated
May 29, 2018
for further information);
provided update on its Joaquin 2.0% NSR royalty, with expected cash flow as early as the
calendar year 2019 in the fourth quarter;
received regulatory approval on its listing application as a Tier 1 TSX-V Issuer and, effective
February 2, 2018
, its common shares began to trade;
declared and paid a monthly dividend for January to
April 2018
of
$0.001
per share to the
shareholders of the Company (please see
news release dated
December 12, 2017
for further
information);
increased the monthly dividend rate effective
June 2018
to
$0.0015
per share to the
shareholders of the Company (please see
news release dated March
19, 2018 for further
information); and
appointed Mr.
Alexander Molyneux
and
Frank L. Hanagarne, Jr.
as members of the Board of
Directors.
QUARTERLY UPDATES ON ROYALTIES AND STREAMS
Endeavor Silver Stream
The Endeavor Mine located in
New South Wales, Australia
was once the region's largest zinc, lead,
and silver producer. Commissioned in 1983 as the Elura Mine, the site has been operated by CBH
Resources since 2003 and was then renamed as the Endeavor Mine. The orebody at the Endeavor
Mine has the form of massive vertical pillars, which is similar to others found in the Cobar Basin.
Extraction of approximately 30 million tonnes has occurred to date.
Metalla has the right to buy 100% of the silver production up to 20.0 million ounces (7.0 million
ounces have been delivered as of
August 2018
) from the Endeavor Mine for an operating cost
contribution of
US$1.00
per ounce of payable silver, indexed annually for inflation, and a further
increment of 50% of the amount by which silver price exceeds
US$7.00
per ounce.
On
May 29, 2018
, the Company announced by news release it had received an updated mine plan
from CBH (the "
Endeavor
Mine Plan
"), which includes 1.6 million Ag ounces forecasted to be
produced through
December 2020
(3)
. CBH also had exploration success at depth with a potential
new zone called the "Deep Zinc Lode," which has the potential to extend the mine life even further
(see news release for additional information on the Endeavor Mine Plan). CBH has adopted a rolling
mine plan with increased drilling and new frequent updates every two to three years.
Joaquin Project NSR
A 2.0% NSR royalty payable by Pan American Silver Corporation ("
Pan American
") on minerals
mined from the concessions which form part of Joaquin Project located in central
Santa Cruz
Province
,
Argentina
, 145 kilometres from Manantial Espejo silver-gold mine owned by Pan American.
Pan American has announced that it finalized a preliminary feasibility study on the La Morocha
deposit, which is part of Joaquin Project. The study recommends the development of the La
Morocha deposit as an underground mine, with processing to occur at Pan American's Manantial
Espejo mill. Pan American's Board of Directors has approved a capital investment of approximately
US$37.8 million
to construct the La Morocha underground mine and obtained authorizations to initiate
construction on the mining project. Pan American filed a technical report
(4)
pursuant to National
Instrument 43-101 -
Standards of Disclosure for Mining Projects
and filed on SEDAR (
www.sedar.com
). The technical report outlines initial 474,000 tonnes of probable reserves at 721
parts per million ("
ppm
") Ag and 0.41 ppm Au, representing contained metal of 11 million oz. Ag and
6,300 oz. Au to be targeted during the first three years of the mine plan (please see Pan American's
news release dated
January 31, 2018
for further information). Pan American has given guidance that
production should start in Q4 of the calendar year 2019.
Garrison Project NSR
A 2.0% NSR royalty payable by Osisko Mining Inc. ("
Osisko
") 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 and consists of a portfolio of
properties spanning a 50 kilometers distance along the Destor-Porcupine Fault Zone, encompassing
16 noncontiguous properties, including the Garrcon and Jonpol properties, 903 Zone, and Buffonta,
and
Golden Pike
advanced exploration properties.
As at 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 the calendar year
2018
(5)
.
Akasaba West Royalty
A 2.0% NSR royalty payable by Agnico Eagle Mines Limited ("
Agnico
") on its Akasaba West Mine.
The mine located less than 30 kilometers from Goldex, the deposit is expected to create flexibility
and synergies for the Company's operations in the Abitibi region by using extra milling capacity at
both Goldex and LaRonde, while reducing costs. Akasaba West currently hosts probable gold
reserves of approximately 145,000 ounces (5.2 million tonnes at 0.87 g/t gold and 0.49% copper)
and an indicated gold resource of approximately 49,000 ounces (2.2 million tonnes at 0.70 g/t gold
and 0.41% copper) as of
December 31, 2017
(6)
. The Akasaba NSR will be payable after the first
210,000 ounces of gold have been produced, and Agnico has a buy-back right of 1.0% for
US$7.5
million
.
On
June 28, 2018
,
Canada's
Minister of Environment and Climate Change, the Hon.
Catherine
McKenna
announced the cabinet's decision to approve the Akasaba West Copper-Gold Mining
Project, following a federal environmental assessment. The project, as proposed by Agnico, will
include the construction, operation, and decommissioning of an open-pit copper and gold mine
located 15 kilometers east of
Val-d'Or, Quebec
. This project, when it is operational, is projected to
create approximately 100 direct jobs, according to its proponent.
Zaruma Gold Mine NSR
A 1.5% NSR royalty payable by Core Gold Inc. ("
Core Gold
," formerly Dynasty Metals & Mining) on
minerals mined from the Zaruma gold mine located in the Zaruma-Portovelo Mining District of
southern
Ecuador
, 3 kilometers north of the town of Zaruma. Between the years 2012 and 2014, the
Zaruma mine produced 72,430 oz. of gold and 152,292 oz. of silver. The Zaruma gold mine is
estimated to contain a measured and indicated resource of 2.62 million tonnes with an average gold
grade of 12.97 grams per tonne ("
g/t
") and an inferred resource of 3.7 million tonnes with an
average grade of 12.2 g/t (totaling approximately 1.094 million oz. of gold) in a technical report
(7)
pursuant to National Instrument 43-101 -
Standards of Disclosure for Mining Projects
and filed on
September 17, 2014
.
Core Gold's local subsidiary Elipe S.A has been deemed in corporate good standing by
Ecuador's
government once again. Elipe S.A is the subsidiary of Core Gold that owns the Zaruma gold mine.
This reactivation of Elipe S.A allows Core Gold to regain total control of all operations including
financial and administrative operations, and to appoint the General Manager of Elipe S.A. Metalla
believes that this is a major step for Core Gold to be able to raise the capital needed to restart
operations at Zaruma. Metalla has received royalty payments from Core Gold on production that
occurred between 2012 and 2014 from the judgment it acquired as part of the Coeur transaction.
NLGM Silver Stream
A 15% ownership interest in Silverback which owns a 100% silver stream on the New Luika Gold
Mine ("
NLGM
") operated and owned by Shanta Gold Limited ("
Shanta
"). The low-cost New Luika
Gold Mine, which is located in the Songwe District of South Western Tanzania approximately 700
kilometers south-west of Dar es Salaam, achieved its first commercial production in 2012. The ore
bodies at New Luika comprise high grade (>6 g/t gold), medium grade (3 to 6 g/t gold), and low
grade (1 to 3 g/t gold) ore which overall averages 3.9 g/t gold.
Shanta has commenced underground development at the Ilunga underground mine. Ilunga will shortly
be the third active source of high-grade ore at NLGM and has a JORC mineral reserve grading 5.56
g/t, which is higher than the Luika deposit. The current mine design of Ilunga has the potential to
contribute up to 25,000 tonnes per month of high grade ore with an estimated average contribution
of 20,000 oz. per planned level of development. This will enhance the economics at NLGM but not
increase overall production.
Hoyle Pond Extension NSR
A 2.0% NSR royalty payable by Goldcorp Inc. ("
Goldcorp
") on the Hoyle Pond Extension Royalties
which are located on claims that are beneath the Kidd metallurgical complex and immediately
adjacent to the east and northeast of the Hoyle Pond mine complex. There is a 500,000 oz. Au
exemption on the leased mining rights. Currently, there are no publicly disclosed reserves/resources
on the extension property. In Goldcorp's 2017 Mineral Reserves and Mineral Resources estimates
update
(8)
(please see Goldcorp's news release dated
October 25, 2017
), Goldcorp stated that
reserve replacement for the Porcupine camp will be focused on the down plunge extension at Hoyle
Pond. Metalla is expecting a significant amount of drilling to take place in the calendar year 2018 on
the extension property with the potential to be able to quantify reserves/resources in the calendar
year 2019.
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 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
(1)
Non-IFRS Financial Measures
-
The items marked with a "
(1)
" are alternative performance measures and do not have any standardized meaning prescribed by
international financial reporting standards ("IFRS"). Readers should refer to non-IFRS financial measures in the Company's Management's Discussion and Analysis for
the year ended May 31, 2018, as filed on SEDAR and as available on the Company's website for further details. Metalla has included certain of these 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.
(2)
Includes attributable silver oz. from the Endeavor silver stream that was shipped and provisionally invoiced during June and July 2017, where the Company is entitled to
the associated trade receivable amounts (see non-IFRS Financial Measures).
(3)
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 and CBH has not indicated the mineral resource and/or mineral reserve category, if any, on which the information in
table on "Projected Silver Production" is based.
Mineral resources are not mineral reserves and by definition do not demonstrate economic viability. The project silver
production contained herein may be based on mineral resource estimates that include inferred mineral resources, which are 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 inferred mineral resources,
if used by CBH in preparing the mine plan, will be converted to the measured and indicated resource categories, 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
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
(4)
https://www.panamericansilver.com/wp-content/uploads/2018/01/Joaquin-2018-technical-report.pdf
(5)
See https://www.osiskomining.com/news/osisko-mining-provides-ontario-exploration-update/
(6)
See Agnico's website at: https://www.agnicoeagle.com/English/operations-and-development-projects/operations/goldex/default.aspx and the technical report titled "NI 43-
101 Technical Report on the Akasaba Project" as filed on Agnico's SEDAR profile.
(7)
https://www.coregoldinc.com/assets/docs/reports/2014-09-18-Zaruma-Independent-Preliminary-Assessment.pdf
(8)
https://www.goldcorp.com/English/investors/news-releases/default.aspx#2017#Goldcorp-reports-2017-reserve-and-resource-estimates-and-provides-exploration-update
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
No securities regulatory authority has either approved or disapproved of the contents of this news
release. The securities being offered have not been, and will not be, registered under the United
States Securities Act of 1933, as amended (the ''U.S. Securities Act''), or any state securities laws,
and may not be offered or sold in
the United States
, or to, or for the account or benefit of, a "U.S.
person" (as defined in Regulation S of the U.S. Securities Act) unless pursuant to an exemption
therefrom. This press release is for information purposes only and does not constitute an offer to
sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction.
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 information in this press release includes, but is 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 including royalty
payments from Core Gold relating to its Zaruma mine, continued ramp-up at the Endeavor Mine,
initiation and completion of construction at La Morocha deposit as well as commencement of
production in late 2019, 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. Such forward-looking statements reflect management's current beliefs and are
based on information currently available to management.
Forward-looking statements involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of the Company to be materially
different from any future results, performance, or achievements expressed or implied by the
forward-looking statements. The forward-looking statements contained in this press release are
based on reasonable assumptions that have been made by management as at the date of such
information and is subject to unknown risks, uncertainties and other factors that may cause the
actual actions, events or results to be materially different from those expressed or implied by such
forward-looking information, including, without limitation: the impact of general business and
economic conditions; the ongoing operation of the properties in which the Company holds a
royalty, stream, or other production-base interest by the owners or operators of such properties in
a manner consistent with past practice; absence of control over mining operations; the accuracy of
public statements and disclosures made by the owners or operators of such underlying properties;
no material adverse change in the market price of the commodities that underlie the asset
portfolio; and other risks and uncertainties disclosed under the heading "Risk Factors" in the
Management's Discussion and Analysis of the Company for the year ended
May 31, 2018
dated
September 26, 2018
filed with the Canadian securities regulatory authorities on the SEDAR
website at
www.sedar.com
.
Although Metalla has attempted to identify important factors that could cause actual actions, events
or results to differ materially from those contained in forward-looking information, there may be
other factors that cause actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that such information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such information. Investors are
cautioned that forward-looking statements are not guarantees of future performance. The Company
cannot assure investors that actual results will be consistent with these forward-looking statements.
Accordingly, investors should not 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.
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%SEDAR: 00005157E
For further information:
Metalla Royalty & Streaming Ltd., Brett Heath, President & CEO, Phone:
604-696-0741, Email: [email protected], Website: www.metallaroyalty.com
CO: Metalla Royalty and Streaming Ltd.
CNW 19:44e 27-SEP-18