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Metalla Royalty & Streaming Ltd. (MTA) has closed the acquisition of a 5% net smelter return royalty on the South Domes portion of the Castle Mountain Gold mine owned by Equinox Gold Corp. (EQX) on October 1, 2021. The transaction involved an upfront payment of $10 million, with an additional $5 million payable within twenty months at a 4% interest rate. Metalla also completed a C$3 million drawdown under its convertible loan facility with Beedie Capital, which will be used to fund part of the acquisition. This strategic move aims to enhance Metalla's portfolio and shareholder value.
Positive
Acquisition of a 5% royalty on Castle Mountain mine expected to enhance revenue streams.
Strategic partnership with Equinox Gold Corp., a well-established player in the gold sector.
Utilization of convertible loan facility could provide a flexible funding mechanism.
Negative
Total acquisition cost of $15 million may raise financial scrutiny.
Drawdown of convertible loan incurs an 8% interest, potentially impacting future cash flows.
(All Currency is in United States (US$) dollars unless otherwise noted)
VANCOUVER, BC, Oct. 1, 2021 /PRNewswire/ - Metalla Royalty & Streaming Ltd. ("Metalla" or the "Company") (NYSE American: MTA) (TSXV: MTA) is pleased to announce that, further to its news release dated September 13, 2021, it has closed (the "Closing") the acquisition of an existing 5% net smelter return royalty (the "Royalty") from an arm's length seller (the "Seller") on the South Domes portion of the Castle Mountain Gold mine owned by Equinox Gold Corp. (NYSE: EQX; TSX: EQX).
On Closing, Metalla paid $10 million in cash to the Seller (the "Closing Payment") with the remaining $5 million of the purchase price to be paid within twenty months from the closing date bearing interest at a rate of 4% per annum from the closing date.
FINANCIAL UPDATE
The Company has completed its previously announced drawdown of an additional C$3 million (the "Drawdown Amount") under its existing amended and restated convertible loan facility (the "Convertible Loan Facility") with Beedie Capital ("Beedie"). The Drawdown Amount will accrue interest at 8% per annum with the remaining C$12 million available to the Company under the Convertible Loan Facility subject to stand-by interest of 1.5% per annum.
The Drawdown Amount is convertible by Beedie into common shares of Metalla ("Common Shares") at a conversion price of C$11.16 which is based on a 20% premium above the 30-day volume-weighted average price ("VWAP") of the Common Shares on the TSX Venture Exchange calculated as of September 30, 2021, in accordance with the terms of the Convertible Loan Facility. Any Common Shares issued upon conversion of the Drawdown Amount will be subject to a hold period elapsing on February 2, 2022.
The Drawdown Amount was used to fund a portion of the Closing Payment for the acquisition of the Royalty.
ABOUT METALLA
Metalla was created for the purpose of providing shareholders with leveraged precious metal exposure by acquiring royalties and streams. Our goal is to increase share value by accumulating a diversified portfolio of royalties and streams with attractive returns. Our strong foundation of current and future cash-generating asset base, combined with an experienced team, gives Metalla a path to become one of the leading gold and silver companies for the next commodities cycle.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accept responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking statements and forward-looking information within the meaning of United States and Canadian regulations. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budgets", "scheduled", "estimates", "forecasts", "predicts", "projects", "intends", "targets", "aims", "anticipates"or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements and information in this release include, but are not limited to, statements with respect to the potential achievement of milestones and payments in connection therewith; the payment of the remaining $5 million purchase price; the anticipated or possible future developments at the Castle Mountain Project and the properties on which the Company currently holds royalty and stream interests or relating to the companies owning or operating such properties; the future value of the Company's stock; future cash generation; and the Company's potential to become a leading gold and silver company. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Metalla to control or predict, that may cause Metalla's actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to: the risk that the milestones may not be satisfied; risks associated with the impact of general business and economic conditions; the absence of control over mining operations from which Metalla will purchase precious metals or from which it will receive stream or royalty payments and risks related to those mining operations, including risks related to international operations, government and environmental regulation, delays in mine development, construction and operations, actual results of mining and current exploration activities, conclusions of economic evaluations and changes in project parameters as plans are refined; problems related to the ability to market precious metals or other metals; industry conditions, including commodity price fluctuations, interest and exchange rate fluctuations; interpretation by government entities of tax laws or the implementation of new tax laws; regulatory, political or economic developments in any of the countries where properties in which Metalla holds a royalty, stream or other interest are located or through which they are held; risks related to the operators of the properties in which Metalla holds a royalty or stream or other interest, including changes in the ownership and control of such operators; risks related to global pandemics, including the novel coronavirus (COVID-19) global health pandemic, and the spread of other viruses or pathogens; influence of macroeconomic developments; business opportunities that become available to, or are pursued by Metalla; reduced access to debt and equity capital; litigation; title, permit or license disputes related to interests on any of the properties in which Metalla holds a royalty, stream or other interest; the volatility of the stock market; competition; future sales or issuances of debt or equity securities; use of proceeds; dividend policy and future payment of dividends; liquidity; market for securities; enforcement of civil judgments; and risks relating to Metalla potentially being a passive foreign investment company within the meaning of U.S. federal tax laws; and the other risks and uncertainties disclosed under the heading "Risk Factors" in the Company's most recent annual information form, annual report on Form 40-F and other documents filed with or submitted to the Canadian securities regulatory authorities on the SEDAR website at www.sedar.com and the U.S. Securities and Exchange Commission on the EDGAR website at www.sec.gov. Metalla undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed, and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.
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