METALLA ADDS ROYALTY ON AGNICO EAGLE’S SANTA GERTRUDIS GOLD PROPERTY
$MTAFF, $AEM, $GLGDF
Metalla Royalty & Streaming Ltd. (TSXV: MTA) (OTCQX: MTAFF) (FRANKFURT: X9CP) announced last Wednesday that it has entered into a purchase and sale agreement to acquire a 2% net smelter return royalty on the Santa Gertrudis gold property located north of Hermosillo in Sonora, Mexico from GoGold Resources Inc. (OTCMKT:GLGDF) for $12-M in cash.
The Agreement is subject to a Right of First Refusal (ROFR) held by the owner of the Property, Agnico Eagle Mines Limited (NYSE:AEM). Agnico has 45 days to exercise its ROFR. If Agnico fails to respond or waives its ROFR during the Offering Period, then Agnico will be deemed to have refused the offer.
GoGold, at its option, has the right to take $6-M of the purchase price in Metalla shares at a deemed price of CAD$0.78 per share.
Such shares will be subject to a 4 month hold period under applicable securities laws and the rules of the TSX Venture Exchange. In addition to the ROFR, the completion of the acquisition is subject to customary conditions including the approval of the TSX Venture Exchange. Closing is expected to occur by 2-H of Q-4 of Y 2018.
Mr. Brett Heath, President and Chief Executive Officer of Metalla said, “This acquisition enhances Metalla’s strong development pipeline and adds a second royalty with Agnico as its counterparty, one of the premier gold mining companies in the world.”
Santa Gertrudis is the most recent acquisition by Agnico which closed in November 2017 for $80-M (CAD$105 million) in cash.
In addition to the cash consideration, GoGold retained a 2% NSR on the Property, 1% of which can be bought back at any time for $7.5-M.
Metalla views the Property as having strong resource expansion potential on its large 42,000-hectare land package. The Property produced over 550,000 oz of gold in the 1990’s at an average head grade of 2.13 g/t gold.
Since Agnico acquired the Property, they have started an initial drilling program that consists of 28,000 metres with a budget of approximately $9.5-M, focused on the evaluation of known mineralized zones with an updated PEA expected in Y 2019.
Northern Sonora Mexico, where the Property is located, has 3 northwest-trending mineralization corridors, which each have distinctive regional geological features.
Santa Gertrudis covers a potential strike length of 25 km of the favorable Cretaceous-age Intra-caldera sedimentary belt. The mineralized deposits form trends that are hosted mainly by the sedimentary Mural Formation but are not restricted to this unit. There is a distance of 18 km between the northernmost and southernmost mineralized deposits with the balance remaining to be explored.
In Y 2014, GoGold published a mineral resource estimate as summarized in the following table:
|Santa Gertrudis Mineral Resources(1-5)|
|Type||Cut-off Au g(1)||kTonnes||Au g/t||Au kOunces||kTonnes||Au g/t||Au kOunces|
|(1) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate
of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical,
marketing, or other relevant issues.
|(2) The mineral resources in this estimate were calculated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines as prepared by the CIM Standing Committee on Reserve Definitions, as well as the requirements of National Instrument 43-101.
(3) All resources are reported within an optimized pit shell developed using the following economic parameters: Gold Price $1,300 per ounce. G&A cost $0.80 per tonne. Mining cost $1.40 per tonne. Processing cost $4.00 per tonne for oxides, carbonaceous oxides and mixed oxide/sulphide deposits, and $22.00 per tonne for sulphides. Process recoveries used are 75% for oxides and leach pad material, and 50% for mixed oxide/sulphide deposits, and 90% for sulphides. Optimized pit slopes are 50 degrees.
(4) The mineral resource table incorporates 35 deposits and associated optimized pit shells as well as three
(5) TECHNICAL REPORT, UPDATED RESOURCE ESTIMATE ON THE SANTA GERTRUDIS GOLD PROPERTY, SONORA STATE, MEXICO FILED ON SEDAR ON AUGUST 1, 2014 BY GOGOLD RESOURCES INC
Metalla was created to provide shareholders with leveraged precious metal exposure by acquiring royalties and streams. Our goal is to increase share value by accumulating a diversified portfolio of royalties and streams with attractive returns. 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
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