Metalla Royalty and Streaming Ltd (CVE:MTA) (NYSEAMERICAN:MTA) has announced a deal to buy a private Nevada company for US$4 million, which adds two high-quality gold royalties on-trend to one of the largest gold operations in the world to its portfolio.
The royalty firm has struck a share purchase deal with Idaho Resources (IRC), which boasts a 0.5% gross overriding royalty (GOR) on the Anglo/Zeke claim block in Eureka County, Nevada.
READ: Metalla Royalty and Streaming CEO says company 'well-positioned' to grow despite volatile capital markets
"This transaction gives shareholders exposure to one of the most prolific gold structures covering approximately 19,000 hectares on the Battle Mountain-Eureka trend in Nevada, of which 7,500 hectares are owned by the two largest gold producing companies in the world, Newmont and Barrick," Brett Heath, the CEO of Metalla, told investors Monday in a statement.
The Anglo/Zeke claim block lies southeast of the Cortez Operations and Goldrush project owned by Nevada Gold Mines (NGM), which in turn is a joint venture established last summer between titans Barrick Gold Corp, which holds 61.5%, and Newmont Newmont, which has a 38.5% stake.
Barrick has previously revealed that the Goldrush deposit is a large Carlin-type project with initial production projected for 2021, which will progress toward a steady-state production of 450,000 ounces per year during its first full five years of operation.
The major has said mineralization is open along strike towards the north and east where the royalty property continues with the favorable stratigraphic host of the Goldrush, Cortez Hills, and Pipeline deposits, and it has identified a mineral potential area known as Goldrush South on the Anglo/Zeke claims.
IRC also holds a 1.5% gross overriding royalty covering NuLegacy Gold Corp's Red Hill project (Red Hill), also in Eureka County, which is contiguous to the southeast of the Anglo/Zeke claims.
At Red Hill, previous drilling at the Serena and Iceberg deposits hit high-grade intercepts, including 22 meters at 6.59 grams per ton (g/t) gold and 31.2 meters at 3.9 g/t gold, Metalla revealed in today's statement.
It added that, recently, NuLegacy has completed geophysical surveys, which identified an interesting untested structure undercover to the west called the Rift Anticline, which is explained by NuLegacy to be an analogue to the Goldrush deposit to the northwest.
NuLegacy also expects to receive an expanded drill permit to test the Rift Anticline target by the end of 2020 with a preliminary drill program of 12 to 15 holes, noted Metalla.
Metalla said it will issue US$2 million worth of its shares to IRC, based on the ten-day volume-weighted average price of shares traded on the Toronto venture exchange at a price of C$7.88 per share, plus US$2 million in cash. The transaction is expected to close on or around June 1 this year.
Earlier this month, Metalla's CEO assured shareholders that the company was well-positioned to navigate the uncertainty caused by the coronavirus pandemic.
It came as the firm posted its third-quarter financial results highlighting a working capital balance of nearly C$6.7 million.
Shares in Toronto nudged up 1.03% to C$7.86.
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