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Metalla Royalty and Streaming to strengthen development pipeline with Valgold Resources acquisition

Last updated: 16:10 10 May 2018 BST, First published: 11:10 10 May 2018 BST

Ontario
Pictured is the province of Ontario, where the Garrison project is located

Metalla Royalty and Streaming Ltd (CVE:MTA) has struck a deal to buy all the shares of  Valgold Resources Ltd, which holds a 2% NSR (net smelter royalty) royalty on the Garrison project in the world class Timmins and Kirkland Lake mining region of Ontario.

The acquisition also adds a proven mine builder and high-quality counterparty Osisko Mining Inc (TSE:OSK), which was largely responsible for commissioning the Canadian Malartic mine.

Metalla says the deal expands the firm's growth-profile with a royalty on a gold development asset, which has around 1.2mln ounces in the higher confidence measured and indicated resource and a 0.8mln ounce inferred.

READ: Metalla Royalty and Streaming offers investors cost effective way of getting future upside - CEO

Under the terms of the arrangement, all of Valgold's shares will be exchanged for Metalla shares on the basis of 0.1667 Metalla share for each Valgold one, meaning a consideration of $0.13 per ValGold share, based on the 40-day volume weighted average price - a 79% premium.

"The acquisition of ValGold is an exciting transaction that strengthens Metalla's development pipeline of royalties and adds a top-tier operator in a world-class mining jurisdiction with significant potential upside," said Brett Heath, the president and chief executive of Metalla.

"This acquisition is consistent with our long-term strategy of executing accretive deals in known mining camps with strong counterparties."

Meanwhile, Kevin Snook, the chairman and chief executive of ValGold, added: "Metalla's management team and board has built an impressive and diversified royalty and streaming portfolio in only 20 months.

"ValGold shareholders can look forward to seeing the full value of the Garrison royalty recognized in Metalla's share price as well as improved market liquidity and exposure to Metalla's dividend and diversified royalty and streaming assets."

The Garrison project lies around 100km east of Timmins Ontario, and is 100% owned by Osisko Mining Inc (Osisko) and consists of a portfolio of properties spanning 50km  along the Destor-Porcupine Fault Zone.

It encompasses 16 non-contiguous properties including the Garrcon and Jonpol properties, 903 Zone, and Buffonta, and Golden Pike advanced exploration properties.

Metalla Royalty shares were unchanged at C$0.82.

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