Proactive Investors - Run By Investors For Investors

Metalla Royalty & Streaming to boost portfolio and cash flow with new royalty portfolio from Alamos Gold

Alamos is one of the premier gold producers in North America with a market cap of C$2.7 billion
Gold nuggets
The new royalties are in safe mining jurisdictions, the group said

Metalla Royalty & Streaming Ltd (CVE:MTA) told investors it had snapped up a portfolio of 18 royalties from gold miner Alamos Gold Inc (NYSE:AGI) for US$8.6 million in shares, which will grow its portfolio, production growth and cash flow.

The new acquisition of 16 royalties and two options, now takes the Metalla portfolio to 43 royalties and streams.

READ: Metalla Royalty & Streaming strikes $12M convertible loan deal with Beedie Capital

Alamos is one of the premier gold producers in North America, with a market cap of C$2.7 billion, and after closing the deal, will hold around 6.3% of the Metalla capital.

"This transaction marks a major step in growth for Metalla," said Metalla's President and CEO Brett Heath. "Today's accretive transaction with Alamos significantly enhances Metalla's existing portfolio and will drive production growth, cash flow, NAV, and increase our precious metals optionality.

"We want to welcome Alamos as a strategic shareholder and believe their endorsement continues to prove our strategy of being the go-to royalty company for third-party holders."

Safe jurisdictions

The new royalties are in safe mining jurisdictions, with eight royalties in Canada, six in Peru, three royalties in Mexico and one in Chile, said Metalla in Monday's statement.

Highlights of the new royalties include a 2% NSR (net smelter royalty) on the El Realito property owned and operated by Agnico Eagle, adjacent to its operating La India mine.

There is also a 1.5% NSR on the Wasamac Mine currently under development by Monarch Gold, 15km west of Rouyn-Noranda in Quebec.

Metalla has also bought an option to purchase a 1% NSR royalty on the La Fortuna Mine currently under development by Minera Alamos located in Durango State, Mexico.

It has also bought a 1% NSR royalty on the producing Beaufor Mine operated by Monarch Gold, which lies 20km northeast of Val d'Or, Quebec. Since 1933, Beaufor has produced more than 1.16 Moz (million ounces) at a historical grade of 7.5g/t gold.

Another highlight is the 1% NSR on the San Luis property owned by SSR Mining, which liens in the Ancash Department in central Peru.

The project has mineral reserves of 7.2 million ounces of silver at an average grade of 447.2 g/t (grams per ton) and 0.29 million ounces of gold at a grade of 18.06 g/t as at the end of 2016.

As consideration for the new portfolio, Metalla will issue over 8.23 million shares at C$1.30 each for a total of US$8 million.

Metalla has also secured an option, exercisable by the firm, on completion of diligence, to complete its acquisition of the La Fortuna royalty for two years for a further US$0.6 million.

In a separate statement today, Metalla revealed that Beedie Capital will become a strategic investor in the group after the Vancouver-based company struck a convertible loan facility of $12 million with the latter.

The loan, which Metalla said, would fund new acquisitions of royalties and streams, will consist of an initial advance of $7 million within 90 days from closing.

Shares in Metalla shed around 5% in Toronto to $1.27.

Contact Giles at [email protected]

Follow him on Twitter@Gile74

View full MTA profile View Profile

Metalla Royalty and Streaming Ltd Timeline

Related Articles

electicity wires
March 25 2019
'We have four key projects which we are developing in parallel'
The 25th element on the periodic table, manganese
February 13 2019
Test work on Butcherbird ore recently produced very high purity 99.95% manganese metal.
Citronen camp in Greenland
April 02 2019
Its Citronen project is in Greenland while its Captains Flat JV with Glencore is in NSW.

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use