Metalla Reports Financial Results FOR the 2022 Fiscal Year and Provides Asset Updates
METALLA REPORTS FINANCIAL RESULTS FOR THE 2022 FISCAL
YEAR AND PROVIDES ASSET UPDATES
(All dollar amounts are in
United States
dollars unless otherwise indicated)
TSXV: MTA
NYSE American: MTA
VANCOUVER, BC
,
March 31, 2023
/CNW/ -
Metalla Royalty & Streaming Ltd.
("
Metalla
" or the "
Company
") (TSXV: MTA) (NYSE American:
MTA) announces its operating and financial results for the year ended
December 31, 2022
. Metalla has also filed with the U.S. Securities and
Exchange Commission (the "
SEC
") its SEC Annual Report on Form 40-F for the year ended
December 31, 2022
. The Form 40-F includes the
Company's Annual Information Form, audited financial statements and management's discussion & analysis for the year ended
December 31,
2022
. For complete details of the consolidated financial statements and accompanying management's discussion and analysis for the year ended
December 31, 2022
, 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/
.
Metalla shareholders may receive a hard copy of the Company's complete audited financial statements for the year ended
December 31, 2022
,
free of charge, upon request. For further information please visit the Company website at
https://www.metallaroyalty.com/financial-reports/
.
Brett Heath
, President, and CEO of Metalla, commented, "2022 was a significant year for Metalla and the precious metals royalty landscape.
During the year Metalla announced five transactions to acquire fifteen new royalties and streams, for a combined purchase price of
$33.5
million
in cash and stock. Looking forward, we see a tremendous opportunity to capitalize on our business strategy and believe Metalla has a
significant advantage in 2023, attracting more high-quality third-party assets, given our size, scale, and track record."
FINANCIAL HIGHLIGHTS
During the year ended
December 31, 2022
, and the subsequent period up to the date of this news release, the Company:
Acquired, or amended agreements for 1 stream and 14 royalties, through the following transactions:
Acquired a portfolio of eight royalties from First Majestic Silver Corp. ("
First Majestic
") for
$20.0 million
in common shares of Metalla
valued at
$4.7984
per share, representing the 25-day volume-weighted average price ("
VWAP
") of shares of Metalla traded on the
NYSE prior to the announcement of the transaction. Upon closing, the Company issued to First Majestic 4,168,056 common shares of
the Company. The royalties acquired in this transaction included:
a 100% Gross Value Return ("
GVR
") royalty on gold production from the producing
La Encantada
mine located in
Coahuila, Mexico
operated by First Majestic limited to 1,000 ounces annually;
a 2.0% Net Smelter Return ("
NSR
") royalty on the past producing
Del Toro
mine located in
Zacatecas, Mexico
owned by First
Majestic;
a 2.0% NSR royalty on the
La Guitarra
mine located in Temascaltepec,
Mexico
owned by
Sierra Madre Gold
and Silver Ltd.;
a 2.0% NSR royalty on the Plomosas project located in
Sinaloa, Mexico
owned by GR Silver Mining Ltd.;
a 2.0% NSR royalty on the past-producing
San Martin
mine located in
Jalisco, Mexico
owned by First Majestic;
a 2.0% NSR royalty on the past producing La Parrilla mine located in
Durango, Mexico
owned by First Majestic and subject to a
binding purchase agreement with Golden Tag Resources Ltd.;
a 2.0% NSR royalty on the
La Joya
project located in
Durango, Mexico
owned by Silver Dollar Resources; and
a 2.0% NSR royalty on the
La Luz
project located in
San Luis Potosi, Mexico
owned by First Majestic.
Acquired an existing 2.5%-3.75% sliding scale Gross Proceeds ("
GP
") royalty over gold and a 0.25%-3.0% NSR royalty on all metals
(other than gold and silver) on the majority of Barrick Gold Corporation's ("
Barrick
") world-class Lama project located in
Argentina
, from
an arm's length seller to for aggregate consideration of
$7.5 million
, to be satisfied by Metalla through the payment on the closing date of
$2.5 million
in cash and
$2.5 million
in common shares valued at
$5.3553
per share, representing the 15-day VWAP of shares of Metalla
traded on the NYSE prior to the announcement of the transaction, the remaining
$2.5 million
, to be paid in cash or common shares, is
payable within 90 days upon the earlier of a 2 Moz gold mineral Reserve estimate on the royalty area or 36 months after the closing
date. The transaction closed on
March 9, 2023
, at which time the Company paid the
$2.5 million
in cash and issued 466,827 common
shares of the Company to the arm's length seller;
Acquired one silver stream and three royalties from Alamos Gold Corp. ("
Alamos
") for
$5.0 million
in common shares of Metalla valued
at
$5.3228
per share, representing the 20-day VWAP of shares of Metalla traded on the NYSE prior to the announcement of the
transaction. The transaction closed on
February 23, 2023
, at which time the Company issued 939,355 common shares of the Company
to
Alamos
. The stream and royalties acquired in this transaction include:
a 20% silver stream over the
Esperanza
project located in
Morales, Mexico
owned by Zacatecas Silver Corp.;
a 1.4% NSR royalty on the Fenn Gibb South project located in
Timmins, Ontario
owned by Mayfair Gold Corp.;
a 2.0% NSR royalty on the Ronda project located in Shining Tree,
Ontario
owned by Platinex Inc.; and
a 2.0% NSR royalty on the Northshore West property located in
Thunder Bay, Ontario
owned by New Path Resources Inc.
Acquired a 1.0% NSR royalty on the
Lac Pelletier
project owned by Maritime Resources Corp. from an arm's length seller for total
consideration of
C$0.3 million
in cash. The
Lac Pelletier
project is located in
Rouyn Noranda, Quebec
and is within ten kilometers of the
Yamana Gold Inc. ("
Yamana
") Wasamac project where Metalla holds a 1.5% NSR royalty; and
Amended an existing 1.0% NSR royalty on Monarch Mining Corporation's ("
Monarch
") Beaufor Mine. In consideration for
$1.0 million
paid in cash to Monarch, Monarch agreed to waive a clause stipulating that payments under the NSR royalty were only payable after 100
Koz of gold have been produced by Monarch following its acquisition of Beaufor Mine.
On
May 12, 2022
, the Company filed a new final short form base shelf prospectus and a corresponding registration statement on Form F-10
that replaced the base shelf prospectus and Form F-10 registration statement previously filed by the Company in 2020, and enhanced the
Company's financial flexibility. In connection with this transition, the Company terminated its At-The-Market ("
ATM
") program announced on
May 14, 2021
(the "
2021 ATM Program
"). From inception on
May 14, 2021
, to the termination on
May 12, 2022
, the Company distributed
1,990,778 common shares under the 2021 ATM program at an average price of
$8.18
per share for gross proceeds of
$16.3 million
; and
On
May 27, 2022
, the Company announced that it had entered into a new equity distribution agreement with a syndicate of agents to
establish an ATM equity program (the "
2022 ATM Program
") under which the Company may distribute up to
$50.0 million
(or the equivalent
in Canadian Dollars) in common shares of the Company. From inception to the date of this press release, the Company distributed 1,048,649
common shares under the 2022 ATM Program at an average price of
$5.18
per share for gross proceeds of
$5.4 million
;
On
March 30, 2023
, the Company signed a binding term sheet with Beedie Capital to amend its loan facility by: (i) extending the maturity
date to 48 months from the close of the amendment; (ii) increasing the loan facility by
C$5.0 million
from
C$20.0 million
to
C$25.0 million
;
increasing the interest rate from 8.0% to 10.0% per annum; amending the conversion price of the
C$3.0 million
fourth drawdown from
C$11.16
per share to a 30% premium to the 30-day VWAP of the Company shares measured at market close on the day prior to
announcement of the amendment; amending the conversion price of
C$4.0 million
of the
C$5.0 million
third drawdown from
C$14.30
per
share to the 5-day VWAP of the Company shares measured at market close on the day prior to announcement of the amendment, and
converting the
C$4.0 million
into shares at the new conversion price; and amending the conversion price of the remaining
C$1.0 million
of the
third drawdown to the 30-day VWAP of the Company shares measured at market close on the day prior to announcement of the amendment.
All other terms remain of the loan facility unchanged, and the amendment is subject to regulatory approvals;
On
March 30, 2023
, the Company signed an amendment with the arm's length seller of the Castle Mountain royalty to extend the maturity
date of the
$5.0 million
loan from
June 1, 2023
, to
April 1, 2024
. As part of the amendment, on
March 31, 2023
, the Company will pay any
accrued interest on the loan, effective
April 1, 2023
, the interest rate will increase to 12.0% per annum, and the principal and accrued interest
will be repaid no later than
April 1, 2024
;
For the year ended
December 31, 2022
, received or accrued payments on 2,681 attributable Gold Equivalent Ounces ("
GEOs
") at an
average realized price of
$1,765
and an average cash cost of
$7
per attributable GEO (
see Non-IFRS Financial Measures
);
For the year ended
December 31, 2022
, recognized revenue from royalty and stream interests, including fixed royalty payments, of
$2.4
million
, net loss of
$10.9 million
, and adjusted EBITDA of negative 1.5 million (
see Non-IFRS Financial Measures
);
For the year ended
December 31, 2022
, generated operating cash margin of
$1,758
per attributable GEO, from the Wharf,
El Realito
,
Joaquin, and COSE royalties, the New Luika Gold Mine ("
NLGM
") stream held by Silverback Ltd. ("
Silverback
"), the Higginsville derivative
royalty asset, and other royalty interests (
see Non-IFRS Financial Measures
); and
For the year ended
December 31, 2022
, recognized payments due or received (not included in revenue) from the Higginsville derivative
royalty asset of
$2.4 million
(
see Non-IFRS Financial Measures
).
ASSET UPDATES
Below are updates during the three months ended
December 31, 2022
, and subsequent period to certain of the Company's assets and is based
on information publicly filed by the applicable project owner:
La Encantada
On
February 23, 2023
, First Majestic announced 107 ounces of gold production from
La Encantada
in the fourth quarter of 2022 for a grand total
of 413 ounces of gold for 2022. Silver production for the mine totaled 3.09 Moz and 2023 guidance is in the range of 2.9 – 3.2 Moz silver. First
Majestic plans to complete 8,000 meters of exploration drilling to continue searching for a new mineralized breccia body as well as extend and de-
risk some of the known veins. First Majestic will continue to advance mining at
La Encantada
towards the Ojuelas and Beca-Zone orebodies to
extract higher-grade ores.
Metalla holds a 100% GVR royalty on gold produced at the
La Encantada
mine limited to 1.0 Koz annually.
El Realito
On
February 16, 2023
, Agnico Eagle Mines Ltd. ("
Agnico
") reported that gold production from La India totaled 16,669 oz gold for the fourth
quarter. Agnico also reported that the 2023 midpoint guidance for the La India mine is expected to be 65 Koz gold. The stripping ratio for early
El
Realito
mining phases was higher than anticipated and resulted in fewer tonnes places on the leach pad. During 2023, Agnico plans to complete
4,000 meters of exploration drilling at the Chipriona deposit, which is currently open along strike with the
El Realito
royalty boundary.
Metalla holds a 2.0% NSR royalty on the
El Realito
deposit which is subject to a 1.0% buyback right for
$4.0 million
.
Wharf Royalty
On
February 22, 2023
, Coeur Mining Inc. ("
Coeur
") reported fourth quarter production of 19.9 Koz gold at 0.65 g/t, in line with full year guidance
for Wharf disclosed by Coeur on
February 16, 2022
. Coeur has guided 2023 production to be in the range of 85 – 95 Koz. Successful exploration
and infill drilling during the year allowed for a 7% increase, net of depletion, at Wharf where Proven & Probable Reserves totaled 908 Koz gold at
0.027 oz/t (0.84 g/t). Additionally, a total of 293 Koz gold at 0.02 oz/t (0.62 g/t) of Measured & Indicated Resources, and Inferred Resources
stand at 63 Koz gold at 0.02 oz/t (0.62 g/t), were declared at Wharf. Exploration efforts in 2023 will focus on geological modelling and planning for
2024.
Metalla holds a 1.0% GVR royalty on the Wharf mine.
New Luika Silver Stream
On
January 18, 2023
, Shanta Gold Limited ("
Shanta
") reported that it produced 16.7 Koz of gold at its NLGM in
Tanzania
in the fourth quarter of
2022, in line with full year production guidance of 68-76 Koz gold. On
February 27, 2023
, Shanta announced the extension of the mine life at
NLGM through to Q1 2028 through the increase in Mineral Reserves at the mine. Total Proven & Probable Mineral Reserves at NLGM now stand
at 394 Koz at 2.85 g/t gold, with Measured & Indicated Resources at 764 Koz at 2.78 g/t gold. In addition, a tailings retreatment project at NLGM
contributed an additional 48 Koz of recoverable gold and extends the NLGM operating life to at least
February 2031
.
Metalla holds a 15% interest in Silverback, whose sole business is receipt and distribution of a 100% silver stream on NLGM at an ongoing cost
of 10% of the spot silver price.
Côté-Gosselin
On
February 2, 2023
, and
February 16, 2023
, IAMGOLD Corporation ("
IAMGOLD
") reported that it had completed 73% of the construction at
the Côté Gold Project and drill results received for the 2022 drill program continue to highlight the resource expansion potential of the Gosselin
deposit both to the south of the recently declared 5Moz Resource estimate and at depth. Significant intercepts include 1.99 g/t gold over 342.2
meters, 1.29 g/t gold over 313 meters, 1.5 g/t gold over 181 meters and 0.66 g/t gold over 388.5 meters.
Additional technical studies are planned to complete metallurgical test work and mining and infrastructure studies to review alternatives to optimize
the inclusion of Gosselin into future Côté life-of-mine plans.
Metalla holds a 1.35% NSR royalty that covers less than 10% of the Côté Reserves and Resources estimate and covers all of the 5 Moz gold
Gosselin Resource estimate.
Lama
On
February 15, 2023
, Barrick reported that drilling of Lama targets continued during the quarter with two drill rigs testing mineralization concepts
at Penelope South and Porfiada targets. Total exploration, evaluation and project expenses for the whole Pascua-Lama project totaled
$52 million
for the year end 2022. For 2023, Barrick has budgeted
$75 million
for exploration at Lama.
Metalla holds a 2.5%-3.75% GP royalty on gold and a 0.25%-3.0% NSR royalty on all other metals (other than gold and silver) at Lama.
Castle Mountain
On
February 21, 2023
, Equinox Gold Corp. ("
Equinox
") reported production in the third quarter of 6,124 ounces of gold and exploration
expenditure for the total year of
$2.2 million
at the Castle Mountain property. The environmental review process and public scoping of the Phase 2
permit amendment is anticipated to begin in the first half of 2023.
Equinox also reported that in 2023, Equinox plans to spend
$8 million
on Castle Mountain phase two optimization, engineering and permitting.
Metalla holds a 5.0% NSR royalty on the South Domes area of the Castle Mountain mine.
Santa Gertrudis
On
February 16, 2023
, Agnico provided a resource update on the
Santa Gertrudis
project near
Hermosillo, Mexico
where Agnico expects to
spend
$7.3 million
for 10,000 meters of drilling in 2023. Measured & Indicated resources at
Santa Gertrudis
totaled 516 Koz at 0.91 g/t gold and
2,106 Koz at 3.71 g/t silver. Inferred resources totaled 1,464 Koz at 2.25 g/t gold and 7,548 Koz at 11.58 g/t silver.
Metalla holds a 2.0% NSR royalty on the
Santa Gertrudis
project.
Garrison
On
January 6, 2023
, Moneta Gold Inc. ("
Moneta
") announced their plans to complete a 190,000 meter drill program to upgrade the resource and
infill drilling to support a pre-feasibility study at the Tower Gold Project. In addition, Moneta plans to assess the expansion of underground
resources through additional exploration drilling at the Garrcon deposit and evaluate opportunities to increase underground production rates from
the PEA results.
On
September 7, 2022
, Moneta announced positive results for a PEA for the Tower Gold Project envisioning a 19,200 tpd combined open pit and
underground mining operation with strong economics. Average annual gold production over the first eleven years is expected to be 368 Koz gold
with the majority of the ounces in the first five to six years sourced from the Garrison open pit.
Metalla holds a 2.0% NSR royalty on the Garrison project.
Wasamac
On
February 16, 2023
, Agnico reported they are reviewing the technical aspects of the project with a focus on processing ore at the Canadian
Malartic mill, which is expected to reduce the project footprint and capital cost. An internal evaluation of the project is expected in the fourth
quarter of 2023 and Agnico expects the project has the potential to produce 200 Koz gold per year. Agnico is in the process of acquiring the
Wasamac project through its acquisition of Yamana's portfolio of Canadian assets.
Metalla holds a 1.5% NSR royalty on the Wasamac project subject to a buy back of 0.5% for
C$7.5 million
.
Amalgamated Kirkland Property
On
February 16, 2023
, Agnico reported it is evaluating the potential to source additional production from Amalgamated Kirkland to be processed
at either Macassa or at the LaRonde complex. Agnico is evaluating the potential to produce between 20 Koz to 40 Koz of gold per year from the
AK deposit commencing in 2024. A total of 16,438 meters of drilling was completed at the AK deposit in 2022. In addition, Agnico declared 100
Koz at 5.2 g/t gold 2P mineral reserves at AK for end 2022.
Metalla holds a 0.45% NSR royalty on the Amalgamated Kirkland property.
Fifteen
Mile Stream
On
February 22, 2023
, St. Barbara Limited ("
St Barbara
") reported a revised permitting timeline for Fifteen Mile Stream of development in FY26
was declared. In addition, St. Barbara will investigate repurposing the Touquoy processing facility for use at Fifteen Mile Stream to lower capital
cost and construction cost. On
October 18, 2022
, St Barbara Limited reported that permitting for the Fifteen Mile Stream was approved under the
Federal Canadian Environmental Assessment Act 2012 (CEAA2012) permitting process and they will target construction of the mine in 2026.
Metalla holds a 1.0% NSR royalty on the Fifteen Mile Stream project, and 3.0% NSR royalty on the Plenty and Seloam Brook deposits.
Tocantinzinho
On
October 18, 2022
, G Mining Ventures Corp. ("
G Mining
") provided an update on its recently concluded drill program at the Tocantinzinho
project ("
TZ
") in Pará,
Brazil
. Infill drilling within the Feasibility Study pit shell returned significant results of 1.48 g/t gold over 193.6 meters and 1.7
g/t gold over 144.7 meters. Drilling outside of the feasibility study pit shell confirmed mineralization with significant intercepts of 1.05 g/t gold over
72.1 meters and 0.98 g/t gold over 10.4 meters. In addition, G Mining identified new targets for greenfield exploration around TZ. The high priority
target called Castor is located directly southeast of TZ. Early exploration on the target has returned significant intercepts of 2.2 g/t gold over 8.4
meters and 1.66 g/t gold over 8 meters. A follow up drill program is planned for Q4 2022 and 2023. On
September 12, 2022
, G Mining
announced a positive construction decision for TZ.
Metalla holds a 0.75% GVR royalty on the Tocantinzinho project.
Fosterville
On
October 26, 2022
, Agnico reported that gold production from
Fosterville
for the full year of 2022 totalled 338 Koz gold. During 2023, Agnico
plans to spend
$20.8 million
for 105,300 meters of capitalized drilling and development of exploration drifts to replace Mineral Reserve depletion
and to add Mineral Resources in the Lower Phoenix, Cygnet and Robbins Hills areas. Agnico will spend another
$4.4 million
for 11,300 meters of
underground and surface expensed exploration with the aim of discovering addition high-grade mineralization at
Fosterville
.
During the third quarter, significant progress was made on exploration down plunge of the Lower Phoenix system and the newly discovered
Cardinal splay zone with significant highlights of 365.5 g/t gold over 1.1 meters, approximately 100 meters down plunge of the Lower Phoenix
Mineral Resource, 226.2 g/t gold over 1.4 meters with visible gold and 168.2 g/t gold over 2.9 meters. In addition, significant intercepts further
down plunge the Lower Phoenix Mineral Resources returned 14.6 g/t gold over 10.6 meters and 5.5 g/t gold over 21.9 meters. Further to an
exploration update by Agnico on
August 11, 2022
, expansion drilling in the Lower Phoenix returned significant results of 31.5 g/t gold over 8
meters and 226.2 g/t gold over 1.4 meters.
Management has estimated the Metalla royalty boundary is approximately 650-800 meters down dip from the reported drill intercepts in the
Lower Phoenix zone.
Metalla holds a 2.5% GVR royalty on the northern and southern extensions of the
Fosterville
mining license and other areas in the land package.
CentroGold
On
February 22, 2023
, Oz Minerals stated that the relocation plan required for progressing the court injunction removal for CentroGold was
approved with the Federal body of the National Institute of Colonization and Agrarian Reform (INCRA). The request to remove the injunction has
been submitted to the court. Oz Minerals plans to complete a feasibility study on the project once the injunction is removed. In addition,
exploration expenses of
$2.3 million
were spent on the project for the quarter.
Metalla holds a 1.0-2.0% NSR royalty on the CentroGold project.
Big Springs
On
November 15, 2022
, Warriedar Resources Limited ("
Warriedar
") (formerly Anova Metals Limited) announced a 21% increase to Measured &
Indicated Resources at the Big Springs project in
Nevada
, coming in at 555 Koz at 2.5 g/t gold. Total Resources including Inferred now stand at
1,014 Koz gold at 2.0 g/t gold. For 2023, Warriedar has stated substantial further resource growth potential is set to be pursued with aggressive
drilling program expected in 2023.
Metalla holds a 1.0-2.0% NSR on the Big Springs and Golden Domes project.
Akasaba West
On
February 16, 2023
, Agnico, who is currently in the process of closing its acquisition of Yamana, announced that removal of overburden and
installation of surface infrastructure was ongoing to bring the Akasaba West project online for early 2024 where it is expected to contribute 12,000
ounces of gold per year to the Goldex operation.
Metalla holds a 2.0% NSR royalty on the Akasaba West project subject to a 210 Koz gold exemption.
Endeavor
On
March 28, 2023
, Polymetals Resources Ltd. ("
Polymetals
") announced the execution of a share sale and purchase agreement in relation to
the proposed acquisition of all of the issued share capital of Orana Minerals Pty Ltd., which is the sole shareholder of Cobar Metals Pty Ltd.
("
Cobar Metals
"). Cobar Metals has in turn entered into an agreement to purchase the Endeavor lead, zinc and silver mine in
Australia
via the
acquisition of three project companies, including Cobar Operations Pty Ltd. ("
Cobar Operations
"). Polymetals announced it is focused on various
aspects of the Endeavor mine with a view to recommencing operations. Completion of Polymetals acquisition of Orana Minerals Pty Ltd. is subject
to approval of Polymetals shareholders, with documents to be sent to shareholders in the near future. As part of Polymetals proposed acquisition
of the Endeavor mine, the Company has entered into an agreement with the holder of the Endeavor mining tenements, Cobar Operations, by
which the Company will convert its 100% silver stream in the Endeavor mine to a 4.0% NSR royalty on all lead, zinc and silver produced from
those tenements, and the closing of that agreement is pending.
Camflo
On
February 16, 2023
, Agnico reported the Canadian Malartic partnership has identified porphyry hosted gold mineralization that could potentially
be mined via an open pit at the Camflo property and provide tonnage to the Canadian Malartic operation by the end of the decade. Additional
studies are underway to fully evaluate the mineralization and additional potential in adjacent rock types. An aggressive drill program of
$5 million
with 22,000 meters is planned in 2023. The Camflo property covers the past producing Camflo mine which had historical production of
approximately 1.6 Moz gold at 5.78 g/t.
Metalla holds a 1.0% NSR royalty on the Camflo mine, located ~1km northeast of the Canadian Malartic operation.
Montclerg
Through press releases dated
February 8, 2023
, and
January 18, 2023
, GFG Resources Inc. reported high grade intervals at the Montclerg Gold
Project located 48 km east of the Timmins Gold District. Significant intercepts include 8.46 g/t gold over 5 meters and 9.85 g/t gold over 16
meters.
Metalla holds a 1.0% NSR royalty on the Montclerg property.
Detour DNA
On
February 16, 2023
, Agnico reported the results from step out drilling approximately 2.4 km west of the Detour West pit where a significant drill
hole intercepted 2.6 g/t gold over 35.3 meters and 13.7 g/t gold over 3.2 meters.
Metalla holds a 2.0% NSR royalty on the Detour DNA property which is approximately 7 km west of the Detour West reserve pit margin.
Green Springs
On
December 9, 2022
, Contact Gold Corp. announced it has entered into a
$10 million
Earn-in with Centerra Gold on the Green Springs project.
Metalla holds a 2.0% NSR royalty on the Green Springs project.
Joaquin and COSE
The Company owns a royalty on the Joaquin project and on the COSE project, both of which are currently owned and operated by Pan American
Silver ("
Pan American
"). The ore from both Joaquin and COSE was trucked to the Manantial Espejo mine where the mill had excess capacity.
On
February 22, 2023
, Pan American released its annual statements and as per those statements it disclosed that mining and processing
activities at Manantial Espejo concluded in
January 2023
and the assets, including Joaquin and COSE, were placed on care and maintenance at
the end of 2022.
The Company considered this announcement as an indicator of impairment on both Joaquin and COSE and as at
December 31, 2022
, fully
impaired both royalties to $nil, and for the twelve months ended
December 31, 2022
, recorded an impairment charge of
$3.7 million
related to
Joaquin and COSE, concurrently the Company has reclassified the royalties as development stage until operations at each project are restarted.
The Company believes there is significant value that remains at these projects based on historical National Instrument 43-101 Standards of
Disclosure of Mineral Projects ("
NI 43-101
") compliant Resources that were excluded from the Pan American mine plan. If the projects are
restarted, or are sold to an entity with a plan to restart mining and processing activities, the Company will do a further analysis to see if any part
of the impairment can be reversed in the future.
Metalla holds a 2.0% NSR royalty on Joaquin and holds a 1.5% NSR royalty on COSE.
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 NI 43-101.
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 Financial Measures
Metalla has included certain performance measures in this press release that do not have any standardized meaning prescribed by
International Financial Reporting Standards (IFRS) including (a) attributable gold equivalent ounces (GEOs), (b) average cash cost per
attributable GEO, (c) average realized price per attributable GEO, (d) operating cash margin per attributable GEO, and (e) adjusted EBITDA.
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.
(a) Attributable GEOs
Attributable GEOs are a non-IFRS financial measure that is 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 silver ounces attributable to the Company divided by the average
London
fix price of gold for the relevant period, plus an amount calculated by taking the cash received or accrued by the Company in the period
from the derivative royalty asset divided by the average
London
fix gold price for the relevant period. Included in the calculation of attributable
GEOs is any cash received from the Higginsville price participation royalty, which is accounted for as a derivative royalty asset, as such any
payments received under this royalty are treated as a reduction in the carrying value of the asset on the Company's statement of financial
position and not shown as revenue on the Company's statement of profit and loss. However, operationally as the Company receives payment
similar to the Company's other royalty interests, the results have been included for more accurate comparability and to allow the reader to
accurately analyze the operations of the Company. The Company presents attributable GEOs as it believes that certain investors use this
information to evaluate the Company's performance in comparison to other streaming and royalty companies in the precious metals mining
industry who present results on a similar basis. The Company's attributable GEO's for the year ended
December 31, 2022
were as follows:
Attributable GEOs during the period from:
Higginsville
1,324
Wharf
639
El Realito
226
NLGM
101
COSE
123
Joaquin
268
Total attributable GEOs
2,681
(b) Average cash cost per attributable GEO
Average cash cost per attributable GEO is a non-IFRS financial measure that is calculated by dividing the Company's total cash cost of sales,
excluding depletion by the number of attributable GEOs.
The Company presents average cash cost per attributable GEO as it believes that
certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies in the
precious metals mining industry who present results on a similar basis. The Company's average cash cost per attributable GEO for the year
ended
December 31, 2022
, was:
Cost of sales for NLGM
$18,213
Total cash cost of sales
18,213
Total attributable GEOs
2,681
Average cash cost per attributable GEO
$7
(c) Average realized price per attributable GEO
Average realized price per attributable GEO is a non-IFRS financial measure that is calculated by dividing the Company's revenue, excluding
any revenue earned from fixed royalty payments, and including cash received or accrued in the period from derivative royalty assets, by the
number of attributable GEOs sold. The Company presents average realized price per attributable GEO as it believes that certain investors use
this information to evaluate the Company's performance in comparison to other streaming and royalty companies in the precious metals mining
industry that present results on a similar basis. The Company's average realized price per attributable GEO for the year ended
December 31,
2022
, was:
Royalty revenue (excluding fixed royalty payments)
$2,164,785
Payments from derivative assets
2,383,974
Revenue from NLGM
182,133
Sales from stream and royalty interests
4,730,892
Total attributable GEOs sold
2,681
Average realized price per attributable GEO
$1,765
(d) Operating cash margin per attributable GEO
Operating cash margin per attributable GEO is a non-IFRS financial measure that is calculated by subtracting the average cast cost price per
attributable GEO from the average realized price per attributable GEO. The Company presents operating cash margin per attributable GEO as
it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty
companies in the precious metals mining industry that present results on a similar basis.
(e) Adjusted EBITDA
Adjusted EBITDA is a non-IFRS financial measure which excludes from net income taxes, finance costs, depletion, impairment charges, foreign
currency gains/losses, share based payments, and non-recurring items.
Management uses Adjusted EBITDA to evaluate the Company's
operating performance, to plan and forecast its operations, and assess leverage levels and liquidity measures. The Company presents Adjusted
EBITDA as it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and
royalty companies in the precious metals mining industry who present results on a similar basis. However, Adjusted EBITDA does not
represent, and should not be considered an alternative to net income (loss) or cash flow provided by operating activities as determined under
IFRS. The Company's adjusted EBITDA for the year ended
December 31, 2022
, was:
Net loss
$(10,928,334)
Adjusted for:
Royalty interest impairment
3,660,365
Interest expense
1,287,499
Finance charges
137,943
Gain on extension of loan payable
(346,251)
Income tax provision
41,854
Depletion
1,807,592
Foreign exchange gain
(34,781)
Share-based payments
2,880,570
Adjusted EBITDA
$(1,493,543)
Refer the Company's MD&A for the year ended
December 31, 2022
, which is available on SEDAR at
www.sedar.com
, for a numerical
reconciliation of the non-IFRS financial measures described above. The presentation of these non-IFRS financial 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 financial 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 interests.
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.
Unless otherwise indicated, the technical and scientific disclosure contained or referenced in this press release,
including any
references to
mineral resources or mineral reserves, was prepared in accordance with Canadian
NI 43-101
, which differs significantly from the requirements
of the U.S. Securities and
Exchange Commission (the
"
SEC
"
)
applicable to U.S. domestic issuers. Accordingly, the scientific and technical
information contained or referenced in this press
release may not be comparable to similar information made
public by U.S. companies subject
to the reporting and
disclosure requirements of the SEC.
"
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. 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" (collectively, "
forward-looking statements
") within
the meaning of applicable securities legislation. The forward-looking statements herein are made as of the date of this press release only and
the Company does not intend to and does not assume any obligation to update or revise them except as required by applicable law.
All statements included herein that address events or developments that we expect to occur in the
future are
forward-looking statements.
Generally, forward-looking statements can be identified by the use of forward-looking terminology 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 in this press release include, but are not limited
to, statements regarding: future events or future performance of Metalla; the Company's plans and objections; the effectiveness, and potential
use and benefit, of the Company's final short form base shelf prospectus and Form F-10 registration statement; the future sales of common
shares under the 2022 ATM program and the value of the gross proceeds to be raised; the amendments to the Amended Loan Facility; the
payment of the principal and accrued interest on the Castle Mountain loan and the anticipated timing thereof; the completion by property owners
of announced drilling programs, capital expenditures, and other planned activities in relation to properties on which the Company and its
subsidiaries hold a royalty or streaming interest and the expected timing thereof; production and life of mine estimates or forecasts at the
properties on which the Company and its subsidiaries hold a royalty or streaming interest; future disclosure by property owners and the
expected timing thereof; the completion by property owners of announced capital expenditure programs; the completion of
8,000 meters of
exploration drilling by First Majestic at
La Encantada
;
the advancement
of mining at
La Encantada
towards the Ojuelas and Beca-Zone
orebodies;
the expected 2023 midpoint
guidance for the La India mine at
El Realito
;
the completion of
4,000 meters of
exploration drilling by
Agnico at the Chipriona deposit at
El Realito
;
the expected 2023 production at Wharf;
the focus of the
exploration efforts at Wharf in 2023;
the
extension of the mine operating life at NLGM;
additional
technical studies planned to complete test work and studies to optimize inclusion of
Gosselin into future
C
ô
t
é
life-of-mine plans;
Barrick
'
s budget for exploration at Lama;
the beginning of the environmental
review process and
public scoping of the Phase 2 permit amendment at Castle
Mountain and the
anticipated timing thereof;
Agnico
'
s expected expenses for drilling
at
Santa Gertrudis
for 2023;
the
completion of a 190,000 meter drill program at the Tower Gold Project;
Moneta
'
s plan to assess the
expansion
of underground resources and evaluate the increase of underground
production rates;
the
expected future production at the Tower Gold Project,
and anticipated timing thereof;
the assessment of
the Wasamac project by Agnico, and its expected production potential;
the acquisition of the
Wasamac project by Agnico;
the production potential at the AK deposit and the anticipated timing thereof;
St.
Barbara
'
s plan to investigate
repurposing of the Touquoy processing facility;
the construction of the Fifteen Mile Stream mine, and the anticipated timing thereof; G. Mining's
plan for a follow-
up drill program at Tocantinzinho and the anticipated timing thereof;
the expected expenses by Agnico at
Fosterville
, and the ,
and the completion of capitalized drilling, development of
exploration drifts, and
underground and surface exploration;
the completion of a
feasibility study on CentroGold, and the
anticipated timing thereof;
the expected drilling program at the Big Springs project, and the anticipated
timing thereof, and the potential for
substantial further resource growth;
the closing of Agnico's acquisition of Yamana;
the expected timing of
start of
production at Akasaba West, and the expected production potential;
the recommencing of operations at the Endeavor mine;
t
he
completion of Polymetals acquisition of Orana Minerals Pty Ltd.
and obtaining the required shareholder approval
;
the closing of the agreement
between the Company and Cobar Operations to convert the Company's 100% silver
stream in the Endeavor mine to a 4.0% NSR royalty on all
lead, zinc and silver produced from those tenements;
the Company
'
s belief that significant
value remains at the Joaquin and COSE projects,
and the potential restart of
operations at those
projects;
the potential that the porphyry hosted gold mineralization identified by the Canadian
Malartic
partnership may be
mined
via an open pit from the Camflo property, and the anticipated timing of
production thereof;
the anticipate drill
program at Camflo property and the anticipated timing thereof; future expectations regarding the royalties and streams of Metalla
; royalty
payments to be paid to Metalla by property owners or operators of mining projects pursuant to
each royalty; the mineral reserves and resource
estimates for the properties with respect to which the Company
has or proposes to acquire an interest;
future gold and silver prices;
other
potential developments relating to, or achievements by the counterparties for Metalla's stream and
royalty agreements, and with respect to the
mines and other properties in which Metalla has, or may
acquire, a stream or royalty interest;
and estimates of future production,
costs and
other financial or economic measures.
Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.
Forward-looking statements 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 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:
risks related to commodity price fluctuations; the absence of control over mining operations from which
Metalla will
purchase precious metals pursuant to gold streams, silver streams and other agreements or from which it will receive royalty payments
pursuant to net smelter returns, gross overriding royalties , gross
value royalties and other royalty agreements or interests and risks related to
those mining operations, including risks related to
international operations, government and environmental regulation, delays in mine
construction and
operations, actual results of mining and current exploration activities, conclusions of economic
evaluations and changes in
project parameters as plans are refined; risks related to exchange rate
fluctuations; that payments in respect of streams and royalties may be
delayed or may never be made;
risks related to Metalla
'
s reliance on public disclosure and other
information regarding the mines or
projects
underlying its streams and royalties;
that some royalties or
streams may be subject to confidentiality arrangements that limit or prohibit
disclosure regarding
those
royalties and streams;
business opportunities that become available to, or are pursued by, Metalla;
that
Metalla
'
s
cash flow is dependent on the activities of others;
that Metalla has had negative cash flow from
operating activities in the past;
that some
royalty and stream interests are subject to rights of other
interest-holders;
that Metalla
'
s royalties and streams may have unknown
defects;
risks related to
Metalla
'
s sole
material asset, the C
ô
t
é
property;
risks related to general business and economic
conditions;
risks
related to global financial conditions, geopolitical events and other uncertainties;
risks
related to epidemics,
pandemics or other public health
crises, including COVID-19 global health
pandemic, and the spread of other
viruses or pathogens, and the
potential impact thereof on Metalla
'
s
business, operations and financial condition;
that Metalla is dependent on its key personnel;
risks
related to Metalla
'
s financial
controls;
dividend policy and future payment of dividends;
competition;
that
project operators may not respect contractual obligations;
that
Metalla
'
s royalties and streams may be
unenforceable;
risks related to conflicts of interest of Metalla
'
s directors and officers;
that Metalla may
not be able to obtain adequate financing in the future;
risks associated with Metalla
'
s 2022 ATM Program;
risks related to Metalla
'
s current
credit facility and financing agreements;
litigation;
title, permit or
license disputes related to interests on any of the properties in which Metalla
holds, or
may acquire, a
royalty, stream or other interest;
interpretation by government entities of tax laws or the implementation
of new tax
laws;
changes in tax laws impacting Metalla;
risks related to anti-bribery and anti-corruption
laws;
credit and liquidity risk;
risks related to
Metalla
'
s information systems and cyber security;
risks
posed by activist shareholders;
that Metalla may suffer reputational damage in the
ordinary course of
business;
risks related to acquiring, investing in or developing resource projects;
risks applicable to
owners and operators
of properties in which Metalla holds an interest;
exploration, development and
operating risks;
risks related to climate change;
environmental
risks;
that the exploration and
development activities related to mine operations are subject to extensive laws
and
regulations;
that the
operation of a mine or project is subject to the receipt and maintenance of permits from
governmental
authorities;
risks associated with the
acquisition and maintenance of mining infrastructure;
that Metalla
'
s
success is dependent on the efforts of operators
'
employees;
risks related
to mineral resource and
mineral reserve estimates;
that mining depletion may not be replaced by the discovery of new mineral
reserves;
that
operators
'
mining operations
are subject to risks that may not be able to be insured
against;
risks related to land title;
risks related to
international operations;
risks related to operating in
countries with developing economies;
risks related to the construction, development and
expansion of
mines or projects;
risks associated with operating in areas that are presently, or were formerly, inhabited
or used by
indigenous
peoples;
that Metalla is required, in certain jurisdictions, to allow individuals from
that jurisdiction to hold
nominal interests in
Metalla
'
s
subsidiaries in that jurisdiction;
the volatility of the
stock market;
that existing securityholders may be diluted;
risks related to Metalla
'
s public
disclosure
obligations;
risks associated with future sales or issuances of debt or equity securities; risks associated
with the Amended Loan
Facility;
that there can be no assurance that an active trading market for