Metalla’s Financial Results for Fiscal Q-3 Y 2018

Metalla’s Financial Results for Fiscal Q-3 Y 2018

$MTAFF, $GLD, $SLV, $GG

  • Metalla has increased its monthly dividend by 50% effective in June 2018.
  • Metalla received approval for its common shares to trade as a Tier 1 TSX-V Issuer,

Metalla Royalty & Streaming Ltd. (MTA.V) (OTCMkt:MTAFF) (X9CP.F) recently announced results for Q-3 Fiscal Y 2018.

For complete details of the condensed interim consolidated financial statements and accompanying management’s discussion and analysis for the 9 month frame ended 28 February 2018 see the Company’s website (www.metallaroyalty.com).

Brett Heath, President/CEO said, “During Q-3 of F-Y 2018 Metalla received regulatory approval for its common shares to trade as a Tier 1 TSX-V Issuer, appointed 2 strategic board members, Mr. Alexander Molyneux and Frank L. Hanagarne, Jr., and increased its monthly dividend by 50% effective in June 2018.”

Mr. Heath went on to say, “All of these actions position the Company for our next stage of growth as we seek additional accretive acquisitions that will add value for shareholders and leverage to Gold and Silver prices.”

Q-3 FINANCIAL HIGHLIGHTS

During the 9 months ended 28 February 2018, the Company:

  • shipped and provisionally invoiced 96,543 attributable Silver ounces at an average price of US$16.15 per oz. for US$1,559,312 or CAD$1,933,547 (see non-IFRS Financial Measures);
  • generated cash margin of US$912,331 (equivalent to CAD$1,131,291) or US$9.45 per attributable Silver oz. towards the Company’s operating cash flows from the Endeavor Silver stream and New Luika Gold Mine stream held by Silverback Ltd.  (see non-IFRS Financial Measures);
  • held trade receivables of US$727,513 and 35,473 attributable Silver oz. as inventory on the reporting date and to be realized in the subsequent quarter;
  • provided update on its 2% NSR Joaquin royalty, with expected cash flow as early as Y 2019 in Q-4;
  • increased production guidance in the range of 450,000 and 500,000 oz. of Silver for F-Y 2018;
  • received regulatory approval on its listing application as a Tier 1 TSX-V Issuer and, effective 2 February 2018, its common shares began to trade;
  • declared and paid a monthly dividend for January to April 2018 of $0.001/share to the shareholders of the Company.
  • appointed Mr. Alexander Molyneux and Frank L. Hanagarne, Jr. as members of the Board of Directors; and
  • increased the monthly dividend rate effective June 2018 to $0.0015/share to the shareholders of the Company.

QUARTERLY UPDATES ON ROYALTIES AND STREAMS

Endeavor Silver Stream

The Endeavor Mine located in New South Wales, Australia was once the region’s largest zinc, lead, and silver producer. Commissioned in 1983 as the Elura Mine, the site has been operated by CBH Resources since 2003 and was then renamed as the Endeavor Mine. The orebody at the Endeavor Mine has the form of massive vertical pillars, which is similar to others found in the Cobar Basin. Extraction of approximately 30 million tonnes has occurred to date.

Metalla has the right to buy 100% of the Silver production up to 20.0 million ounces (6.77 million ounces have been delivered as of April 2018) from the Endeavor Mine for an operating cost contribution of US$1.00 per ounce of payable Silver, indexed annually for inflation, and a further increment of 50% of the amount by which Silver price exceeds US$7.00 per ounce.

Metalla expects CBH Resources to update its mine plan to be made publicly available in Q2 calendar year 2018.

Joaquin Project NSR

A 2.0% NSR royalty payable by Pan American Silver Corporation (“Pan American”) on minerals mined from the concessions which form part of Joaquin Project located in central Santa Cruz Province, Argentina, 145 kilometres from Manantial Espejo silver-gold mine owned by Pan American.

Pan American has announced that it finalized a preliminary feasibility study on the La Morocha deposit, which is part of Joaquin Project. The study recommends the development of the La Morocha deposit as an underground mine, with processing to occur at Pan American’s Manantial Espejo mill. Pan American’s Board of Directors has approved a capital investment of approximately US$37.8 million to construct the La Morocha underground mine and obtained authorizations to initiate construction on the mining project. Pan American filed a technical report(1) pursuant to National Instrument 43-101 – Standards of Disclosure for Mining Projects and filed on SEDAR (www.sedar.com). The technical report outlines initial 474,000 tonnes of probable reserves at 721 parts per million (“ppm”) Ag and 0.41 ppm Au, representing contained metal of 11 million oz. Ag and 6,300 oz. Au to be targeted during the first three years of the mine plan (please see Pan American’s news release dated January 31, 2018 for further information). Pan American has given guidance that production should start in Q4 of calendar year 2019.

(1)   https://www.panamericansilver.com/wp-content/uploads/2018/01/Joaquin-2018-technical-report.pdf

Zaruma Gold Mine NSR

A 1.5% NSR royalty payable by Core Gold Inc. on minerals mined from the Zaruma gold mine located in the Zaruma-Portovelo Mining District of southern Ecuador, 3 kilometers north of the town of Zaruma. Between the years 2012 and 2014, the Zaruma mine produced 72,430 oz. of oGld and 152,292 oz. of Silver. The Zaruma Gold mine is estimated to contain a measured and indicated resource of 2.62 million tonnes with an average Gold grade of 12.97 grams per tonne (“g/t”) and an inferred resource of 3.7 million tonnes with an average grade of 12.2 g/t (totaling approximately 1.094 million oz. of Gold) in a technical report(2) pursuant to National Instrument 43-101 – Standards of Disclosure for Mining Projects and filed on September 17, 2014.

Core Gold announced it has signed a term sheet with Investa Bank S.A to arrange a debt facility for up to US$15 million. Core Gold’s current loan outstanding to Vertex Managed Value Portfolio and Vertex Enhanced Income Fund (together as “Vertex”) may be restructured as part of the proposed facility with Investa. Core Gold is still in the process of closing the proposed loan facility with the last update on January 19, 2018. Metalla believes that if completed, this would allow Core Gold the ability to restart operations at Zaruma during Y 2018. Metalla has received royalty payments from Core Gold on production that occurred between Y’s 2012 and 2014 from the judgement it acquired as part of the Coeur transaction.
(2)   https://www.coregoldinc.com/assets/docs/reports/2014-09-18-Zaruma-Independent-Preliminary-Assessment.pdf

Hoyle Pond Extension NSR

A 2.0% NSR royalty payable by Goldcorp Inc. (“Goldcorp”) on the Hoyle Pond Extension Royalties which are located on claims that are beneath the Kidd metallurgical complex and immediately adjacent to the east and northeast of the Hoyle Pond mine complex. There is a 500,000 oz. Au exemption on the leased mining rights. Currently, there are no publicly disclosed reserves/resources on the extension property. In Goldcorp’s (NYSE:GG) 2017 Mineral Reserves and Mineral Resources estimates update(3) (please see Goldcorp’s news release dated October 25, 2017), Goldcorp stated that reserve replacement for the Porcupine camp will be focused on the down plunge extension at Hoyle Pond. Metalla is expecting a significant amount of drilling to take place in calendar year 2018 on the extension property with the potential to be able to quantify reserves/resources in calendar year 2019.

(3)   https://www.goldcorp.com/English/investors/news-releases/default.aspx#2017#Goldcorp-reports-2017-reserve-and-resource-estimates-and-provides-exploration-update

Mirado Mine Royalty

A 1.0% NSR royalty payable by Orefinders Resources Inc. (“Orefinders”) on its Mirado Mine located to the southeast of Kirkland Lake, Ontario within the prolific gold producing Abitibi Greenstone Belt. Orefinders has filed on SEDAR its Preliminary Economic Assessment(4) (“PEA”) of the South Zone Open Pit, a part of the Mirado project.

This PEA considers only production from a specific area which encompasses approximately five percent of Orefinders’ Mirado project. The mineral resource contemplated within this PEA for mining is within the South Zone’s Open Pit and is near surface mineralization which can be economically mined within a relatively short time frame and without the use of an on-site processing or tailings facility. This PEA’s economics indicate this project has an after-tax internal rate of return (“IRR”) of 158% and a pre-tax undiscounted cash flow of $30.8 million and a post-tax net present value of $20.5 million at a 5% discount rate. Payback period on capital cost is reported at 7 months. These estimates are based on an average gold price of US$1,300 per ounce and an exchange rate of US$0.76/C$1.00.

(4)   http://www.orefinders.ca/march-1-2018/ 

Metalla is a precious metals royalty and streaming company that provides shareholders with leveraged precious metal exposure through a diversified and growing portfolio of royalties and streams.

HeffX-LTN believes that the strong foundation of current and future cash generating asset base, combined with an experienced management team puts the company a path to become a leading Gold and Silver company in the coming commodities cycle.

Symbol Last Trade Date Change Open High Low Volume
OTCMKT:MTAFF 0.63 11 May 2018 -0.00 0.64 0.6519 0.628 69,300
HeffX-LTN Analysis for MTAFF: Overall Short Intermediate Long
Neutral (0.15) Neutral (-0.23) Neutral (0.09) Very Bullish (0.58)

Metalla Royalty & Streaming Ltd.
Brett Heath, President & CEO
Phone: 604-696-0741
Email: [email protected]
Website: www.metallaroyalty.com

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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