Update: Metalla (OTCMKT:EXCFF) Acquired 15% in NLGM’s Silver Stream

Update: Metalla (OTCMKT:EXCFF) Acquired 15% in NLGM’s Silver Stream


Monday, Brett Heath Mettala’s CEO announced the completion of the transaction.

Last Friday, Metalla Royalty & Streaming Ltd. (CSE:MTA) (OTCQB:EXCFF) (FRANKFURT:X9CP)  announced that Metalla SEZC (the Company’s 100% owned Cayman subsidiary) signed a definitive agreement to acquire 15% of the issued shares of Silverback LTD (“Silverback”), together with an option on a 2nd stream for $1.86-M net. The 1st payment from Silverback will be credited against the purchase price.

Silverback is a privately held Guernsey-based investment company that solely owns 100% of the New Luika Gold Mine (NLGM) silver stream which it purchased to provide Shanta Gold Limited, the operator, with construction financing for the underground mine transition.

The NLGM underground mine has made significant progress over the last 12 months successfully producing its 1st underground Gold in December 2016.

During this period NLGM’s reserve base was significantly increased through targeted exploration extending the operation’s mine life with further increases anticipated.

Closing of the transaction by Metalla SEZC and Silverback is expected to occur on or about 11 May 2017 and is subject to conditions customary for similar transactions.

Metalla SEZC will have a 15% interest in Silverback, which is entitled to purchase Silver pursuant to the Silver Streaming Agreement dated 6 May 2016 (SSA). Under the SSA, Silver is purchased at 10% of the spot Silver price.

The SSA relates solely to Silver by-product production from the NLGM located in the Mbeya region in the Lupa Goldfield in south west Tanzania.

The SSA will have minimum Silver (Ag) delivery obligations totaling 608,970 oz Ag over the 1st 6.75 years. The SSA continues through Y 2026 and Silver deliveries will be on an annual basis for the 1st 7 years and then on a monthly basis.

Metalla’s 1st delivery of 8,008 ounces of Silver sold at $17.25oz price for a total of $138,136 from production from October 2016 through March 2017 has been credited against the initial purchase price of $2-M.

The SSA covers 100% of monthly Silver production up to 11,250 oz and 80% of the Silver production thereafter.

The SSA is secured against the Singida mining licenses, a development Gold asset located in central Tanzania. The security amortizes over the 6.75 years of the Silver deliveries and automatically subordinates should a minimum of $6-M of project finance for Singida’s development.

The NLGM is a producing Gold mine that contains a Silver by-product that reached commercial production in Y 2013.

NLGM does not have sufficient data to estimate a Silver reserve. In Q-1 of Y 2017, NLGM produced 28,750 oz. The mine produced 81,873 oz Gold, and 121,682 oz Silver in Y 2015 and 87,713 oz Gold, and 126,572 oz Silver in Y 2016 with AISC of $661 per oz of Gold according to its Q-4 Y 2016 production and operational update.

As part of the transaction, Metalla also has an option to invest in a 2nd streaming transaction.

Any future transactions are subject to due diligence and financing.

Symbol Last Trade Date Change Open High Low Volume
OTCMKT:EXCFF 0.364 28 April 2017 0.01 0.4 0.4 0.364 7,200
HeffX-LTN Analysis for EXCFF: Overall Short Intermediate Long
Neutral (-0.09) Neutral (-0.19) Neutral (-0.15) Neutral (0.06)

Have a terrific week.

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