Metalla Royalty & Streaming Ltd (CVE:MTA) (NYSEAMERICAN:MTA) (FRA:X9C) revealed that it has bought an existing 1.35% net smelter return (NSR) royalty on part of the Côté gold project in Ontario, where construction of a US$1.3 billion mine started late last year.
Côté is owned by Canadian mining major IAMGOLD Corp. and Fortune 500 trading giant Sumitomo and the royalty was bought for C$7.5 million in cash from arm's length sellers.
The project is set to become one of Canada's largest gold mines with expected annual output of 493,000 ounces and total cash costs of US$600 per ounce in the first five years.
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"This transaction provides extraordinary value for Metalla shareholders," said Brett Heath, CEO of Metalla in a statement.
"Metalla shareholders will also gain exposure to the full extent of the expected 3-5Moz Gosselin Zone 1.5km northeast of the Côté deposit which has the potential to materially enhance the production profile at Côté in the future," he added.
Côté currently boasts a 7.2 million ounce (Moz) reserve, a measured and indicated resource of 10.2Moz and an inferred resource of 3.8Moz.
Metalla's new royalty covers a portion of the northern and north-eastern part of the Côté pit but also all of the Gosselin-Young-Shannon gold project (Gosselin).
The Gosselin project lies around 1.5 kilometres (km) to the northeast of the Côté deposit, which IAMGOLD estimates to host an exploration target of between three and five million ounces of gold.
IAMGOLD expects to complete an up to 16,000 metre (m) diamond drill program including up to 14,000m of delineation drilling in the Côté district to support a maiden resource estimate for the Gosselin project, earmarked for the second half of 2021.
Notable drill intercepts from a recent Gosselin exploration program include 1.28 grams per ton (g/t) gold over 412m and 0.98 g/t gold over 342.5m. The Gosselin deposit remains open at depth to the northwest and along strike to the east and southwest.
Metalla's business strategy is to acquire third-party royalties on assets of the major miners with strong operational experience and balance sheets. In just a few years, it has acquired 62 royalties/streams over 20 transactions and deployed C$110 million of capital on assets that span the globe. It has a market cap of over C$530 million.
Contact the author at giles@proactiveinvestors.com