Metalla Royalty & Streaming Ltd (CVE:MTA) (NYSEAMERICAN:MTA) is bolstering its portfolio of royalties with the acquisition of a new stream on a major Chilean mining operation.
The company said Tuesday that it acquired a 2% royalty on future gold production from a portion of the La Fortuna deposit and prospective exploration grounds on the NuevaUnión project, which is jointly operated by Newmont Corporation (NYSE:NEM) (TSE:NGT) and Teck Resources Limited (NYSE:TECK) (TSE:TECK).
NuevaUnion is one of the largest undeveloped copper-gold-molybdenum projects in the world, Metalla said in a statement.
“We are pleased to add another high-quality gold royalty on one of the world's premier copper-gold projects,” Metalla’s CEO Brett Heath said in a statement.
“NuevaUnión is being developed by two of the most prominent mining companies in the world, Teck and Newmont. This transaction gives shareholders exposure to gold on a long-life asset on an accretive basis."
The Vancouver-based firm is partnering with BatteryOne Royalty Corp to jointly purchase the royalty. Under the agreement, Metalla will receive all payments related to gold production while BatteryOne will get the royalty payments on copper production. Payments related to other metals produced will be split evenly between the two companies.
The total purchase price of C$8 million sees Metalla putting up 25% of the purchase price and BatteryOne paying 75% in proportion to the underlying commodity at the La Fortuna deposit. Metalla and BatteryOne paid C$3 million in cash upon signing, with another C$1 million due one year from the closing date and C$4 million payable in cash and shares of the two firms once La Fortuna goes into production.
A pre-feasibility study on NuevaUnion from early 2018 showed production of 224,000 tonnes of copper, 269,000 ounces of gold, and 1,700 tonnes of molybdenum on average over the first five years in operation.
The acquisition adds another to Metalla’s growing portfolio of streams, which currently numbers 43.
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