Metalla Reports Financial Results for the
Metalla Reports Financial Results for the
Period Ended August 31, 2020 and Provides
Asset Updates
(All dollar amounts are in Canadian dollars unless otherwise indicated)
TSXV: MTA
NYSE American: MTA
VANCOUVER, BC,
Oct. 9, 2020
/CNW/ -
Metalla Royalty & Streaming Ltd.
("
Metalla
" or the
"
Company
") (TSXV: MTA) (NYSE American: MTA) announces its operating and financial results for
the three months ended
August 31, 2020
. For complete details of the consolidated financial
statements and accompanying management's discussion and analysis for the three months ended
August 31, 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/
.
Brett Heath
, President and CEO of Metalla commented, "Fiscal Q1 represents another major step
in growth for Metalla's royalty portfolio with the addition of two producing royalties, Wharf and
Higginsville, and the highly coveted
Fosterville
royalty. We are excited about the new opportunities
in front of us and to see many of our assets having exploration success while being advanced
toward production by our first-class counterparties."
FINANCIAL HIGHLIGHTS
During the three months ended
August 31, 2020
, and the subsequent period, the Company:
increased the number of royalties and streams held to a total of 50 precious metal assets
through the following notable transactions:
acquired a net 1.0% Gross Value Royalty interest on the operating Wharf mine ("
Wharf
") in
South Dakota
from third parties for total consideration of
US$1.0 million
in cash and
899,201 common shares. Wharf is operated by Coeur Mining, Inc. ("
Coeur
");
acquired an existing 2.5% Net Smelter Return ("
NSR
") royalty on the northern and southern
portions of Kirkland Lake Gold Ltd.'s ("
Kirkland Lake
") operating
Fosterville
mine
("
Fosterville
") in
Victoria, Australia
, from NuEnergy Gas Limited for total consideration of
AUD$2.0 million in cash and 467,730 common shares; and
announced that it had entered into a purchase and sale agreement with Morgan Stanley
Capital Group Inc. to acquire an existing 27.5% price participation royalty interest on
Karora Resources Inc.'s operating Higginsville Gold Operations ("
Higginsville
") for up to
US$6.5 million
in common shares of Metalla based on the fifteen day VWAP on the NYSE
prior to closing, less any royalty payments received by Morgan Stanley prior to the closing
of the transaction. The royalty is a 27.5% price participation royalty interest on the
difference between the London PM fix gold price and AUD$1,340/oz on the first 2,500
ounces per quarter until a cumulative total of 34,000 ounces of gold has been delivered to
Metalla. Higginsville is a low-cost open pit gold operation in Higginsville, Western
Australia. The transaction has received the required regulatory approvals and is expected
to close in the calendar fourth quarter of 2020.
recognized revenue on 252 (
August 31, 2019
– 118) attributable gold equivalent ounces at an
average realized price of
US$1,763.69
(
August 31, 2019
-
US$1,391.29
) and average cash
cost of
US$42.81
(
August 31, 2019
-
US$316.49
) per gold equivalent oz. (see non-IFRS
Financial Measures);
generated operating cash margin of
US$1,720.88
(
August 31, 2019
-
US$1,074.80
) per
attributable gold equivalent ounce from the Wharf Gross Value Royalty, Joaquin NSR, New
Luika Gold Mine stream held by Silverback Ltd., and other royalty interests (see non-IFRS
Financial Measures);
recognized revenue from royalty and stream interests of
$0.5 million
(
August 31, 2019
-
$0.2
million
), net loss of
$1.9 million
(
August 31, 2019
-
$0.5 million
), and adjusted EBITDA of
negative
$0.3 million
(
August 31, 2019
- negative
$0.6 million
) (see non-IFRS Financial
Measures);
completed a secondary public offering for Coeur for a total of 3,910,000 common shares of the
Company previously held, at a price of
US$5.30
per common share for gross proceeds of
US$20.7 million
(the "
Secondary Offering
"). The net proceeds of the Secondary Offering
were paid directly to Coeur; and
completed an amendment of the convertible loan facility with Beedie Capital ("
Beedie
") whereby
Beedie converted
$6.0 million
of the
$7.0 million
initial advance at
$5.56
per share for a total of
1,079,136 shares. The Company drew down the remaining
$5.0 million
from the original loan
facility with a revised conversion price of
$9.90
and Beedie will make an additional
$20.0 million
available to the Company to fund future acquisitions. Following the conversion and the
additional drawdown the Company has a total of
$6.0 million
outstanding and
$20.0 million
available under the amended loan facility.
ASSET UPDATES
COSE & Joaquin Royalties
Metalla received its first royalty payments on Cap-Oeste Sur East ("
COSE
") and Joaquin for
production in fiscal 2020. Revenue was related to mainly development ore shipped to the Manantial
Espejo plant. Both mines were scheduled to ramp up to commercial production during the first two
calendar quarters of 2020 but have been delayed due to a mandatory shut down of operations by
the
Argentina
government as a result of COVID-19. Pan American reported by news release on
August 5, 2020
, operations at Pan American's COSE & Joaquin mines resumed on
May 4, 2020
,
with high-grade ore being stockpiled on-site.
Metalla holds an NSR royalty of 1.5% and 2.0% on COSE and Joaquin mines, respectively.
New Luika Silver Stream
On
September 3, 2020
, Shanta Gold Limited ("
Shanta
") reported an updated reserve and resource
estimate for the New Luika Gold Mine ("
NLGM
") in Tanzania. As of
June 30, 2020
, Shanta reported
Ore Reserves of 3,941 Kt at 3.23 g/t for 410 Koz of gold and Resources exclusive of Reserves of
6,724 Kt at 2.45 g/t for 531 Koz of gold. Shanta also released assay results from recent drilling
within the NLGM which Shanta expects to incorporate into an updated mine plan. Significant results
included 5.5 g/t gold over 8.12 metres and 6.59 g/t gold over 6.06 metres. On
September 22, 2020
,
Shanta reported their intentions to expand the processing capacity at the NLGM. The expansion,
which is expected to begin commissioning in Q1 2021, will increase mill throughput capacity by 14%
to an annual projected processing rate of 783 KTPA.
Metalla holds a 15% interest in Silverback Ltd. whose sole business is receipt and distribution of a
silver stream on NLGM at an ongoing cost of 10% of the spot silver price.
Wasamac
On
September 10, 2020
, Monarch Gold Corporation ("
Monarch
") announced their intentions to
undertake a review of the silver potential at the Wasamac Gold project in
Quebec, Canada
. 2012
drilling and resampling programs identified silver mineralization associated with gold-rich sections.
The best values recorded include 7.01 g/t silver over 75.9 metres and 10.72 g/t silver over 10.2
metres. Monarch believes a thorough review of the silver potential could add value to the property as
the 2018 Wasamac feasibility report had not considered silver in the economic analysis.
Metalla holds a 1.5% NSR on the Wasamac project subject to a buy back of 0.5% for
$7.5 million
.
Beaufor Mine
On
October 1, 2020
, Monarch reported initial drilling results totalling 1,425.6 metres of the 42,500-
metre drill program at the Beaufor Mine in
Val-d'Or, Quebec
. Significant intercepts included 783 g/t
gold over 0.2 metres and 293 g/t gold over 0.5 metres.
Metalla holds a 1.0% NSR on the Beaufor mine once Monarch has produced 100 Koz of gold from
the property.
Fosterville
On
July 30, 2020
,
Kirkland Lake
announced results from drilling in the Harrier system which
continued to return encouraging results, demonstrating a sustained growth opportunity down dip and
in the southern extensions. New drilling returned high-grade mineralization outside of the existing
mineral reserves, and also demonstrated the continuity of the Harrier structure for 400 metres down
plunge while remaining open at depth with intercept of 8.1 g/t gold over 4.5 metres. Additional high-
grade intercepts from ongoing drilling include 20.9 g/t gold over 5.9 metres including 295 g/t gold
over 0.3 metres and 22.8 g/t gold over 4.3 metres. Furthermore, drilling at depth outlined a new
sulfide structure in the footwall of the Harrier Base fault called Wagtail presenting additional future
targets at depth.
Metalla holds a 2.5% NSR royalty on the northern and southern sections of the Fosterville Mining
Lease.
Redhill
On
September 23, 2020
, NuLegacy Gold Corporation ("
NuLegacy
") announced they had received
permits to begin a drill program on the highly prospective Rift Anticline target which spans 5-6 sq.
km in the Cortez gold-trend of
Nevada
. NuLegacy plans to drill three to five core holes in the most
developed targets commencing mid-October with the balance the 16-hole program scheduled for
completion in Spring 2021.
Metalla holds a 1.5% royalty on the Red Hill project.
Goodfish-Kirana
On
September 23, 2020
, Warrior Gold Inc. reported mineralization at the "A" zone was extended 50
meters to the east, 100 metres to the west and 100 metres down dip, confirming continuity of the
deposit. High grade intercepts include 6.7 g/t gold over 7.4 metres within 2.65 g/t over 22.3 metres
within a new high-grade vein system. Other significant intercepts include 3.69 g/t gold over 2.3
metres and 4.07 g/t gold over 7 metres.
Metalla holds a 1% NSR Royalty on the "A" Zone Goodfish-Kirana property.
Lourdes
On
October 5, 2020
Pucara Gold Ltd. announced the receipt of final authorization to begin drilling at
the Lourdes project in
Peru
. The phase 1 drill program will consist of 5,430 meters in 23 RC holes
and is expected to commence in
October 2020
.
Metalla holds a 1% NSR royalty on the Lourdes Gold project.
Aureus East
On
October 6, 2020
, Aurelius Minerals Inc. reported assay results from previously unsampled and
unassayed underground drill core from the Aureus East project. Significant intercepts include 28.4
g/t gold over 1.78 metres, 32.2 g/t gold over 1.10 metres and 3.3 g/t gold over 7.25 metres. The
10,000 metres phase 1 program at the Aureus Gold project is ongoing.
Metalla holds a 1% NSR royalty on the Aureus East project.
CHANGE IN YEAR-END
In order to better align the Company's reporting cycle with its peers and its royalty and stream
partners, the Company will be changing its year-end to
December 31
, beginning with
December 31
,
2020. As such the Company will have a four-month period ending
December 31, 2020
as its next
reporting period, at which time it will be producing statements for the seven months ended
December 31
, 2020. For additional information please see the Notice filed by the Company on
October 9, 2020
, which is available on SEDAR at
www.sedar.com
.
AT-THE-MARKET EQUITY PROGRAM
In
September 2020
, the Company announced that it had entered into an equity distribution
agreement (the "
Distribution Agreement
") with a syndicate of agents to establish an At-The-
Market equity program (the "
ATM Program
"). Under the ATM Program, the Company may
distribute up to
US$20.0 million
until
June 1, 2022
. From
September 4, 2020
, to
October 8, 2020
,
the Company had distributed 3,000 shares under the ATM Program at an average price of
$11.27
per share for aggregate net proceeds of
$32,974
.
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 three months ended
August 31, 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 gold equivalent ounces,
average realized price per ounce of attributable gold equivalent ounce, and cash margin. Average
cash cost per attributable gold equivalent ounce is calculated by dividing the Company's total cash
cost of sales, excluding depletion by the number of attributable gold equivalent ounces sold. Gold
equivalent ounces are composed of gold ounces attributable to the Company, plus an amount
calculated by taking the revenue earned by the Company in the period from payable gold
equivalent ounces attributable to the Company divided by the average
London
fix price of gold for
the relevant period.
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 gold equivalent ounce from the
average realized price per ounce of attributable gold equivalent ounce. 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.
The disclosure was prepared in accordance with Canadian National Instrument 43-101 ("NI 43-
101"), which differs significantly from the current requirements of the U.S. Securities and
Exchange Commission (the "SEC") set out in Industry Guide 7. Accordingly, such disclosure may
not be comparable to similar information made public by companies that report in accordance with
Industry Guide 7. In particular, this news release may refer to "mineral resources", "measured
mineral resources", "indicated mineral resources" or "inferred mineral resources". While these
categories of mineralization are recognized and required by Canadian securities laws, they are not
recognized by Industry Guide 7 and are not normally permitted to be disclosed in SEC filings by
U.S. companies that are subject to Industry Guide 7. U.S. investors are cautioned not to assume
that any part of a "mineral resource", "measured mineral resource", "indicated mineral resource",
or "inferred mineral resource" will ever be converted into a "reserve." In addition, "reserves"
reported by the Company under Canadian standards may not qualify as reserves under Industry
Guide 7. Under Industry Guide 7, mineralization may not be classified as a "reserve" unless the
mineralization can be economically and legally extracted or produced at the time the "reserve"
determination is made. Accordingly, information contained or referenced in this news release
containing descriptions of mineral deposits may not be comparable to similar information made
public by U.S. companies subject to the reporting and disclosure requirements of Industry Guide 7.
"Inferred mineral resources" have a great amount of uncertainty as to their existence and great
uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of
an inferred mineral resource will ever be upgraded to a higher category. Further, while NI 43-101
permits companies to disclose economic projections contained in preliminary economic
assessments and pre-feasibility studies, which are not based on "reserves", U.S. companies have
not generally been permitted under Industry Guide 7 to disclose economic projections for a mineral
property in their SEC filings prior to the establishment of "reserves". Disclosure of "contained
ounces" in a resource is permitted disclosure under Canadian reporting standards; however,
Industry Guide 7 normally only permits issuers to report mineralization that does not constitute
"reserves" by Industry Guide 7 standards as in-place tonnage and grade without reference to unit
measures. Historical results or feasibility models presented herein are not guarantees or
expectations of future performance.
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, 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, pending and prospective acquisitions, future sales under the ATM Program,
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, and 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 16:36e 09-OCT-20