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Metalla Royalty and Streaming Ltd: DEEP DIVE

Metalla Royalty & Streaming enjoying high growth period as it expands portfolio

Metalla aims to leverage precious metal exposure by acquiring royalties and streams to build value for shareholders
A gold pour
OVERVIEW: MTA The Big Picture
Metalla is a growing gold and silver royalty and streaming group
  • A young productive royalty and streaming company with 25 royalties already
  • Growing cash flow to support and grow dividend
  • Geographically diversified with top operators as counterparties
  • Well financed for 2019 plans with $6.8M raised at the end of 2018 via oversubscribed placing

What does Metalla Royalty & Streaming Ltd do?

Metalla aims to leverage precious metal exposure by acquiring royalties and streams to build value for shareholders.

Buying a royalty means a company has the right to receive a percentage of mineral production from a mining operation, while streaming is the acquisition of all or a portion of a mine's production for both an upfront payment and a fixed price (or fixed percentage) per ounce of metal delivered.

Royalty companies have long been a key inhabitant of the mining sector. They can serve as a financier to help fund the construction of, or expansion of existing mines and can even finance earlier stage exploration projects.

What assets does it have?

Metalla now has  a portfolio of 25 royalties in diversified jurisdictions ranging from Australia, Chile and Mexico.

Key assets are a stream on 100% of silver from the Endeavor mine in Australia run by CBH Resources Ltd, 2% NSR (net smelter royalty) at the Joaquin mine in Argentina where the operator is Pan American Silver. It also has a  1% NSR at the COSE mine also run by Pan American

Metalla also enjoys a 2% NSR at the Santa Gertrudis property run by Agnico Eagle and a 1% NSR on the Fifteen Mile Stream in Nova Scotia run by Atlantic Gold. At the Garrison mine run by Osisko Mining, it has a 2% NSR royalty.

Its two assets currently in production are the Endeavor mine, Australia and the New Luika Gold mine in Tanzania, operated by Shanta Gold.

President and CEO of Metalla Brett Heath has told Proactive that two more assets will be in production by the end of this year (2019) according to the guidance from Pan American Silver.

Repeats revenue guidance for fiscal 2019

Last month, Metalla repeated its guidance for revenue to come in between $9 million and $12 million for the year to May 31 as it posted its second-quarter numbers for the three months to end November.

The total attributable silver production for the year is expected to be between 500,000 and 600,000 ounces, added the Vancouver-based firm.

In the quarter to November 30, the firm shipped and provisionally invoiced 81,808 (2017 - 158,865) attributable silver ounces at an average realized price of US$15.06, compared to US$17.12 in the same period of 2017 and an average cash cost of US$5.90, versus US$7.32 per ounce in 2017.

"In the second quarter Metalla has continued to execute on its strategy of acquiring royalties on properties with world-class operators," said Heath in the regulatory statement.

"We are pleased to have completed the acquisition of a 2-per-cent net smelter return royalty on Agnico Eagle's Santa Gertrudis mine along with a 1.5-per-cent NSR royalty on Pan American Silver's COSE mine, which complements our portfolio of high-quality assets with strong counterparties."

What the CEO Heath says of 2019

The company boss says the focus now is on the group's development assets and reckons the group should have two more royalties in production by the end of the year - to make four.

"Development assets are going to drive the growth over this next cycle," he says.

So having that growth built in, having a different royalty come online every year for the next four, five, six years- that's what we want to build in Metalla. Obviously we want to continue to add to our own cashflow too and we'll do that when we can find transactions that are appropriately priced and consistent with the rest of the deals we've done."

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Metalla Royalty and Streaming Ltd Timeline

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