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Metalla Reports Financial Results for the Third Quarter of 2021 and Provides Asset Updates

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Metalla Reports Financial Results for the Third Quarter of 2021 and Provides Asset Updates

 

 

 

 

 

Metalla Royalty & Streaming Ltd. (TSX-V: MTA) (NYSE American: MTA) announces its operating and financial results for the three and nine months ended September 30, 2021. For complete details of the condensed interim consolidated financial statements and accompanying management’s discussion and analysis for the three and nine months ended September 30, 2021, 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 www.metallaroyalty.com.

 

Brett Heath, President, and CEO of Metalla, commented, “The third quarter of 2021 represented another meaningful step in the continued growth of Metalla, with the acquisition of the 5% royalty on the Castle Mountain project being developed by Equinox Gold. Metalla continues to have another record year in 2021 on the acquisition front, with a total of seven transactions completed, which have the potential to add significant gold ounces to our account.” 

 

FINANCIAL HIGHLIGHTS

 

During the nine months ended September 30, 2021, and the subsequent period up to the date of this news release, the Company:

 

  • Closed seven new royalty and stream acquisitions to bring the total held to 70 precious metal assets through the following notable transactions:
    • an existing 5.0% Net Smelter Returns royalty on the South Domes portion of the Castle Mountain Gold Mine owned by Equinox Gold Corp. from an arm’s length seller for total consideration of $15.0 million, of which $10.0 million was paid in cash at closing, and the remaining $5.0 million to be paid in cash within 20 months from the closing date bearing interest at 4.0% per annum;
    • an existing 1.35% NSR royalty on a portion of the Côté Gold Project and all of the Gosselin Zone (located ~1.5km to the northeast of the Côté Gold Project) owned by IAMGOLD Corporation and Sumitomo Metal Mining Co., Ltd., from arm’s length sellers for total consideration of C$7.5 million in cash;
    • an existing 2.5% NSR royalty on Minera Alamos Ltd.’s La Fortuna project, from Argonaut Gold Ltd. for aggregate consideration of $2.25 million in cash. The 2.5% NSR, which is capped at $4.5 million, will be in addition to Metalla’s uncapped 1.0% NSR royalty to increase the total royalty exposure to 3.5% on the La Fortuna project;
    • an existing 0.5% NSR royalty on Barrick Gold Corp.’s Del Carmen project, which is part of the 9 Moz Au Alturas-Del Carmen project in the prolific El Indio belt in the San Juan province of Argentina, from Coin Hodl Inc. for a total consideration of C$1.6 million in cash;(1)
    • an existing 0.75% Gross Value Return royalty on Eldorado Gold Corp.’s 2 Moz Au Tocantinzinho project located in the Tapajos district in the State of Para in northern Brazil, from Sailfish Royalty Corp. for a total consideration of $9.0 million in cash. (2) Subsequent to the acquisition, Eldorado sold its interest in Tocantinzinho to G Mining Ventures Corp. for $115M;
    • an existing 1.0%-2.0% NSR royalty on OZ Minerals 1.7Moz Au CentroGold project located in the State of Maranhão in northern Brazil, from Jaguar Mining Inc. for total consideration of $7.0 million in cash and with additional contingent payments of up to $11.0 million comprised of shares and cash subject to the successful completion of certain milestones in respect of the CentroGold project;(3) and
    • an existing 0.45% NSR royalty on Agnico Eagle Mines Ltd.’s Amalgamated Kirkland property in its Kirkland Lake project, and an existing 0.45% NSR royalty on Kirkland Lake Gold’s  North Amalgamated Kirkland property at its Macassa mine, from private third parties for total consideration of C$0.7 million in cash.(4)
  • on May 14, 2021, announced the termination of its original at-the-market program. From January 1, 2021 to May 14, 2021, the Company distributed 1,526,600 common shares under the 2020 ATM Program at an average price of $9.45 per share for gross proceeds of $14.4 million.  From inception in September 2020 to termination in May 2021, the Company distributed a total of 1,809,300 common shares under the 2020 ATM Program at an average price of $9.63 per share for gross proceeds of $17.4 million;
  • on May 14, 2021, announced the establishment of a new at-the-market program with a syndicate of agents. Under the 2021 ATM Program the Company may distribute up to $35.0 million (or the equivalent in Canadian dollars) in common shares of the Company. From inception to September 30, 2021, the Company distributed 1,353,128 common shares under the 2021 ATM Program at an average price of $8.70 per share for gross proceeds of $11.8 million, of which 837,596 common shares were sold during the three months ended September 30, 2021, at an average price of $7.89 per share for gross proceeds of $6.6 million. As of the date of this news release, the Company has distributed a total of 1,569,816 common shares under the 2021 ATM program for gross proceeds of $13.3 million;
  • for the three months ended September 30, 2021, received or accrued payments on 766 attributable Gold Equivalent Ounces at an average realized price of $1,733 and an average cash cost of $5 per attributable GEO. For the nine months ended September 30, 2021, received or accrued payments on 2,143 attributable GEOs at an average realized price of $1,753 and an average cash cost of $8 per attributable GEO (see non-IFRS Financial Measures);
  • for the three months ended September 30, 2021, generated operating cash margin of $1,728 per attributable GEO, and for the nine months ended September 30, 2021, generated operating cash margin of $1,745 per attributable GEO, from the Wharf, Joaquin, and COSE royalties, the New Luika Gold Mine stream held by Silverback Ltd., the Higginsville derivative royalty asset, and other royalty interests (see non-IFRS Financial Measures);
  • for the three months ended September 30, 2021, recognized revenue from royalty and stream interests, including fixed royalty payments, of $0.8 million, net loss of $2.2 million, and adjusted EBITDA of $0.2 million. For the nine months ended September 30, 2021, recognized revenue from royalty and stream interests, including fixed royalty payments, of $2.2 million, net loss of $7.3 million, and adjusted EBITDA of negative $0.8 million (see non-IFRS Financial Measures);
  • for the three months ended September 30, 2021, recognized payments due or received (not included in revenue) from the Higginsville derivative royalty asset of $0.6 million, and for the nine months ended September 30, 2021, recognized payments due or received (not included in revenue) from the Higginsville derivative royalty asset of $1.6 million (see non-IFRS Financial Measures); and
  • converted C$5.0 million outstanding on the Beedie Capital amended loan facility at C$9.90 per share for a total of 505,050 common shares and completed a draw down for an additional C$5.0 million from the Beedie Loan Facility with a conversion price of C$14.30 per share, and drew down an additional C$3.0 million from the Beedie Loan Facility with a conversion price of C$11.16, with the conversion prices representing a 20% premium above the 30-day volume-weighted average price of the Company’s common shares on the date of the draw down in accordance with the terms of the Beedie Loan Facility. As at the date of this News Release, the Company has a total of C$8.0 million outstanding under the Beedie Loan Facility bearing interest at a rate of 8% per annum with a remaining C$12.0 million available on standby under the Beedie Loan Facility.

 

ASSET UPDATES

 

Wharf Royalty

 

On October 27, 2021, Coeur Mining Inc. reported in a Form 8-K news release, that Wharf produced 28,157 ounces of gold at 0.77 g/t during the third quarter of 2021, in line with the production guidance range of 85-95 Koz for 2021. On September 9, 2021, Coeur reported on 2021 exploration programs at Wharf infilling a great deal of the mineral resources. Significant oxide intercepts include 7.5 g/t gold over 36.6 meters, 4.1 g/t gold over 61 meters and 10.6 g/t gold over 12.2 meters at the Portland Ridge-Boston and Flossie area. Drilling in the Juno area returned 0.62 g/t gold over 60.9 meters. Coeur has received half of the outstanding drill assays with roughly 40% of the holes returning results above resource grade thickness cut-off. Coeur plans to incorporate these results into its year-end 2021 resource model.

 

Metalla holds a 1.0% GVR royalty on the Wharf mine.

 

Higginsville Royalty

 

On October 14, 2021, Karora Resources Inc. announced third quarter production from its Higginsville Gold Operations and Beta Hunt mines of 30,365 ounces of gold, in line with 2021 production guidance of 105-115 Koz for 2021.

Metalla holds a 27.5% Price Participation Royalty royalty interest on the difference between the London PM fix gold price and A$1,340/oz on the first 2.5 Koz per quarter until a cumulative total of 34.0 Koz of gold at the Higginsville operation have been delivered. As at September 30, 2021, 11.6 Koz of gold had been delivered.

 

New Luika Silver Stream

 

On October 21, 2021, Shanta Gold Limited provided a production update on NLGM in Tanzania, where third quarter production totaled 14,194 ounces of gold at a cash cost of US$1,063/oz.  On July 19, 2021, Shanta announced a new mine plan for NLGM, where average annual production is expected to be 73.6 Koz gold with the potential to extend mine life beyond 2026 through conversion of significant known resources and the expanded 2,450 tpd mill throughput. Shanta expects total gold production from NLGM for the 5-year plan to total 368 Koz from both open pit and underground mine sources from the mining license. Shanta outlined that the resources presently sitting outside of the mine plan amounts to 552 Koz at 2.37 g/t at NLGM.

 

The current Probable Reserves at NLGM stand at 423 Koz at 2.99 g/t gold, the Measured Resources are 2.45 Koz at 2.40 g/t gold, the Indicated Resources are 312 Koz at 2.54 g/t gold, and the Inferred Resources are 237 Koz at 2.17 g/t gold.

 

Metalla holds a 15% interest in Silverback Ltd., 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.

 

Endeavor Silver Stream

 

On October 28, 2021, Sandfire Resources Limited reported that drilling at Endeavor continued with diamond drilling to the south of the Endeavor orebody to target the southern extension to mineralization.

 

Metalla has the right to buy 100% of the silver production up to 20 Moz (~12.6 Moz remaining under the contract for delivery) from the Endeavor Mine for an operating cost contribution of $1.00/oz of payable silver, indexed annually for inflation, plus a further increment of 50% of the silver price in excess of $7.00/oz.

 

Côté-Gosselin

 

On October 18, 2021, IAMGOLD reported that construction had reached 36% completion at the Côté Gold Project and remains on track for H2 2023 production. At the Gosselin zone, IAMGOLD released an initial Indicated Resource estimate of 3.35 Moz at 0.84 g/t gold and an Inferred Resource estimate of 1.71 Moz at 0.73 g/t gold. The Gosselin deposit has only been drilled to approximately half the depth of the Côté deposit and remains open at depth and along strike. A priority area for exploration will be the saddle area between the Gosselin resource pit shell and the Côté deposit for a potential connection of mineralization between the two orebodies. IAMGOLD announced that it will begin mining and infrastructure studies to review alternatives to optimize inclusion of the Gosselin resource into the future Côté life-of-mine planes. IAMGOLD also stated that it will commence work on defining permitting requirements for development scenarios and initiate discussions on these options with First Nation and Métis stakeholders.

 

Metalla holds a 1.35% NSR royalty on a portion of the Côté deposit and all of the Gosselin zone.

 

Santa Gertrudis

 

On November 2, 2021, Agnico announced drilling in the first half of 2021 totaled 27 holes (15,606 meters) focused on advancing Amelia, Espiritu Santo, Santa Teresa, Centauro, Bertha and other zones. At the Centauro zone, drilling led to a significant discovery of high-grade sulphide structures with notable intercepts of 5.8 g/t gold and 9 g/t silver over 15 meters and another interval in the same hole of 15.1 g/t gold and 13 g/t silver over 5.8 meters.

 

At Amelia, drilling focused on delineating and expanding the deposit with significant intercepts of 4.6 g/t gold and 5 g/t silver over 3.4 meters, 3.6 g/t gold and 18 g/t silver over 4.2 meters and 10.2 g/t gold and 8 g/t silver over 2.8 meters. One hole intersected 4.5 g/t gold and 13 g/t silver over 12.8 meters at 740 meters depth, 300 meters below previously known mineralization. Another hole located 208 meters west of the aforementioned hole intersected 4.1 g/t gold and 8 g/t silver over 3.7 meters, proving the deposit remains open at depth and to the west. Expansion and delineation drilling to infill the mineral resource at Amelia will continue for the remainder of the year.

 

At the Santa Teresa zone, near surface oxide drilling expanded the strike length of the zone from 600 meters to 1,200 meters with significant oxide intercepts of 3.6 g/t gold and 30 g/t silver over 3 meters and 1.3 g/t gold and 1 g/t silver over 10.2 meters. Agnico expects to complete an initial resource estimate for this zone at year-end.

 

At the El Toro deposit, deep drilling has intersected high-grade feeder mineralization with significant intercepts of 2.7 g/t gold and 59 g/t silver over 3.9 meters. At the Bertha zone, significant intercepts include 6.3 g/t gold and 2 g/t silver over 4 meters and 17.4 g/t gold and 6 g/t silver over 3 meters.

 

During the remainder of 2021, Agnico plans additional drilling and metallurgical testing to continue expanding the mineral resources, to generate and test new targets including the new La Leona, Santo Niño, Mirna, Cieneguita and Veronica targets and to advance the oxide heap-leach project concept.

 

An updated mineral reserve and resource estimate and an updated preliminary economic assessment are expected in 2021.

 

Metalla holds a 2.0% NSR royalty on Santa Gertrudis subject to Agnico’s right to buy back 1.0% for $7.5 million.

 

Wasamac

 

On September 13, 2021, Yamana Gold Inc. announced that initial drill results reinforced the vision for a 200 Koz plus per year operation with a mine life of at least 15 years. The 15-year mine plan incorporates a portion of the 326 Koz of Indicated Resources and 258 Koz of Inferred Resources which Yamana expects to be converted to Reserves through infill drilling. The balance of the 15-year mine plan is based on a conservative estimate of exploration potential including extension of the Wasa shear along strike and at depth and the potential inclusion of satellite deposits such as the Wildcat zone. In addition, early drill results from Wildcat include 3.84 g/t over 13.25 meters, 13.03 g/t gold over 3.16 meters and 5.02 g/t gold over 11.02 meters. Drilling along strike on the Wildcat zone returned 3.68 g/t gold over 2.57 meters. Exploration expenditures for 2021 and 2022 are estimated by Yamana at $15 million with 120,000 metres of drilling planned. Yamana plans for infill drilling that will include at least 68,000 metres and the balance will be exploration drilling, both on the Wasamac and Francoeur projects. Yamana anticipates the program to ramp up to four drill rigs by late 2021.

 

Metalla holds a 1.5% NSR royalty on the Wasamac project subject to a buy back of 0.5% for C$7.5 million.

 

Akasaba West

 

On October 27, 2021, Agnico announced they plan to revisit the Akasaba West project with the intention to integrate it into the Goldex production profile. An internal technical evaluation is being updated to reflect current financial parameters and to optimize the production rate.

 

Metalla holds a 2% NSR royalty on the Akasaba West project subject to an exemption on the first 210 Koz of gold of production. Agnico holds the right to buy back 1% of the royalty for $7.0 million at and time.

 

Tocantinzinho

 

On October 27, 2021, G Mining announced that it had completed the previously announced acquisition of the Tocantinzinho gold project from Eldorado Gold Corp. for aggregate consideration of $115 million. Tocantinzinho is a permitted, high-grade gold project with a 10-year reserve life with an estimated 187 Koz per year production profile for the first 8 years. G Mining expects to complete an updated feasibility study by Q1 2022, and a positive construction decision by H2 2022. Project optimization and detailed engineering is expected to occur from Q4 2021 through to Q4 2022.  G Mining also expects to complete two drilling campaigns totaling 10,000 meters beginning in Q4 2021 through to Q1 2022, these include a grade control drilling program to de-risk early years of production and an exploration drilling program to test for potential extensions of the known mineralization at depth and below the current pit.

 

G Mining is a precious metals development company with a leadership team which has built four mines in South America, including the Merian mine for Newmont Corporation and Fruta Del Norte for Lundin Gold.

 

Metalla holds a 0.75% GVR royalty on the Tocantinzinho project.

 

El Realito

 

On October 28, 2021, Agnico reported that road construction was progressing well at El Realito with 2.5 km of the 3.7 km road fully completed. Pre-stripping activities started in mid-August 2021 and the construction of the haulage road is expected to be completed by year-end.

 

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.

 

Del Carmen

 

On November 4, 2021, Barrick reported that work was focused on defining an upcoming drill program at Del Carmen to target structural controls that could yield high-grade controls within the larger framework of the deposit. Drilling at Del Carmen is expected to resume in the first quarter of 2022. Barrick also released the details of a newly unveiled porphyry target, located immediately to the north of the Rojo Grande orebody. Drilling will begin in Q4 2021.

 

Metalla holds a 0.5% NSR royalty on the Del Carmen project which is the Argentine portion of the Alturas-Del Carmen project in the prolific El Indio belt.

 

Beaufor Mine

 

On October 27, 2021, Monarch Mining Corporation provided an update on the restart of operations at the Beaufor Mine and Beacon Mill, scheduled to begin in the coming weeks in preparation for the start of mining in 2022. Monarch expects to complete the mine and mill preparation work at the end of the fourth quarter.

 

Metalla holds a 1.0% NSR royalty on the Beaufor mine once Monarch has produced 100 Koz of gold. To date, approximately 27.3 Koz of gold have been produced from the property.

 

Fosterville

 

On November 3, 2021, Kirkland Lake Gold reported that drilling in the first three quarters of 2021 continued to target the Harrier zone as well as the Lower Phoenix system in the southern end of the mining license. Surface drilling also began in the previous quarter to target the Harrier South, Daley’s Hill & Russell’s Reef lines of mineralization. On August 30, 2021, Kirkland Lake Gold reported results from 197 underground and 58 surface holes at Fosterville where drilling continued to target the Lower Phoenix, Harrier, Cygnet and Robbins Hill areas. Significant intercepts in the Lower Phoenix which host the Swan zone include 207 g/t gold over 2.6 meters (November 4, 2021 revision), 9.6 g/t gold over 6.4 meters and 10 g/t gold over 17.6 meters. Exploration in the Lower Phoenix has expanded mineralization 500 meters down-plunge of the current Mineral Reserves.

 

Metalla holds a 2.5% GVR royalty on the Northern and Southern extensions of the Fosterville mining license.

 

CentroGold

 

On October 20, 2021, OZ Minerals announced that the relocation plan required for progressing the court injunction removal has been completed and can be submitted to the National Institute of Colonization and Agrarian Reform (INCRA). An updated pre-feasibility study is expected to now be delivered in H1 2022.

 

Metalla holds a 1.0-2.0% NSR royalty on the CentroGold project.

 

Fifteen Mile Stream

 

On October 25, 2021, St Barbara Limited reported that the first round of information requests for the Environmental Impact Statement were received in late June 2021 and are due for resubmission in March 2022. St. Barbara reported that the feasibility study is nearing completion and is on target for completion early in 2022 and is based on processing ore from Fifteen Mile Stream at St Barbara’s nearby processing plant at Touquoy.

 

Metalla holds a 1.0% NSR royalty on the Fifteen Mile Stream deposit and a 3.0% NSR royalty on the Plenty and Seloam Brook deposits.

 

Aureus East

 

On August 10, 2021, Aurelius Minerals Inc. reported assay results from surface drilling at Aureus East of 149 g/t gold over 0.7 meters and 5.2 g/t gold over 4.8 meters, further expanding the gold system. On October 18, 2021, Aurelius released further drill results of 131.5 g/t gold over 0.6 meters, 26.7 g/t gold over 0.95 meters and 26.4 g/t gold over 0.7 meters. Recent drill results continue to expand the mineralization and refine the geological model, Aurelius is on track to produce a mineral resource in Q1 2022.

 

Metalla holds a 1.0% NSR royalty on the Aureus East project.

 

North AK Property

 

On November 3, 2021, Kirkland Lake Gold reported that near surface zones along the Amalgamated Break will be mined in late 2021. In addition, Kirkland Lake Gold completed 4,160 meters of drilling from a ramp targeting shallow targets near the near surface resource areas and near resource extensions. This drilling was in addition to the 5,576 metres of drilling focused on targeting potential near surface resource from the Near Surface Ramp.

 

Metalla holds a 0.45% NSR royalty on the North AK property which is adjacent to the Macassa near surface resource.

 

Castle Mountain

 

On November 3, 2021, Equinox announced they had commenced permitting for phase 2 operations at the Castle Mountain mine. Equinox expects to undertake formal submission of the amendment to the mine plan in Q1 2022.

 

Metalla holds a 5.0% NSR Royalty on the South Domes area of the Castle Mountain mine.

 

Green Springs

 

On September 15, 2021, Contact Gold Corp. announced that it discovered gold mineralization at the Pilot Shale/Guilmette Limestone contact beneath the historic Mine Trend at the Green Springs project in Nevada. Significant intercepts from the deeper drilling include 0.7 g/t gold over 16.7 meters. In 2021, Contact’s exploration program is focused on rapidly expanding the footprint of oxidized gold mineralisation at Green Springs, by stepping out on high grade zones along the mine trend and new targets under Contact’s exploration model.

 

Metalla holds a 2.0% NSR royalty on Green Springs.

 

Fortuity 89

 

On October 28, 2021, Newcrest Mining Ltd. and Discovery Harbour Resources provided an update on exploration plans at the Fortuity 89 project in Nevada. Newcrest plans to drill a minimum of eight drill holes and 3,400 meters beginning in January 2022 to test a series of low sulphidation epithermal gold target.

 

Metalla holds a 2.0% NSR royalty on the Fortuity 89 project.

 

Tower Stock

 

White Metal Resources Corp. released several drill results on the Tower Stock Gold project in Ontario through several 2021 press releases dated October 21, September 23, and August 24, 2021. Significant drill results from the project include 3.68 g/t gold over 10.5 meters and 1.7 g/t gold over 82.5 meters.

 

Metalla holds a 2.0% NSR Royalty on the Tower Stock project.

 

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.

 

Posted November 16, 2021

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