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Metalla Royalty & Streaming looking to further scale up as it continues to expand gold royalties

Snapshot

In less than four years, the group has acquired 46 royalties/streams over 15 transactions and deployed C$75 million of capital

Metalla Royalty and Streaming Ltd -

Quick facts: Metalla Royalty & Streaming Ltd

Price: 10.15 CAD

TSX-V:MTA
Market: TSX-V
Market Cap: $367.36 m
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  • Greatest exposure to silver of any publicly listed royalty company
  • Focused on acquiring royalties on projects operated by large producers
  • Healthy working capital balance

What Metalla does:

Metalla Royalty & Streaming Ltd (CVE:MTA) (NYSEAMERICAN:MTA)) is aiming to leverage gold and silver exposure by acquiring royalties and streams to build value for shareholders.

Buying a royalty means a company has the right to receive a percentage of mineral production from a mining operation, while streaming is the acquisition of all or a portion of a mine's production for both an upfront payment and a fixed price - or fixed percentage - per ounce of metal delivered.

Royalty companies have long been a key inhabitant of the mining sector. They can serve as a financier to help fund the construction of, or expansion of, existing mines and can even finance earlier stage exploration projects.

Metalla is at an early stage of its growth but is rapidly expanding. The group's business strategy is to acquire third-party royalties on assets which are operated by major miners.

And in less than four years, the group has acquired 46 royalties/streams over 15 transactions and deployed C$75 million of capital on assets that span the world. Two are production assets  (namely, mines), 15 are development assets and 28 are exploration assets.

The firm has said it has consistently outperformed its peers since its inception in 2016 with a compound annual growth rate (CAGR) of 60%.

Significantly, it is also now listed in New York, on the NYSE American exchange, to widen its US investor base and improve its access to capital.

How is it doing:

In April this year, as the world grapples with the coronavirus crisis, Metalla posted its third-quarter results, saying naturally that there were “significant uncertainties” over the pandemic’s impact on its business.

The impact cannot be reasonably "estimated at this time, such as the duration and impact on future production for our partner operators at their respective mining operations", the group explained. But Metalla told investors it was well-positioned with a net asset value (NAV) heavy portfolio and strategy that allowed for growth in volatile capital markets.

Metalla's third-quarter revenue came in at nearly C$1.3 million compared to C$1.4 million during the year-ago quarter, while its net loss came in at C$2.1 million. Metalla assured shareholders that it will continue dividend payments for April and May. The company noted that it had a working capital balance of nearly C$6.7 million.

In the quarter to February 29, Metalla acquired a 2% net smelter royalty (NSR) on future gold production on the NuevaUnión project in Chile, one of the largest undeveloped copper-gold-moly projects in the world. It comprises the La Fortuna deposit and surrounding properties and is a joint venture between mining titans Newmont Corporation and Teck Resources.

On April 27, the firm further boosted its portfolio, unveiling a deal to acquire a private Nevada company for US$4 million, adding two high-quality gold royalties on-trend to one of the largest gold operations in the world.

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. The 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.

In January, when reporting on its fiscal quarter to end-November last year, the firm said major Pan American Silver (NASDAQ:PAAS) had made 'significant' progress at its COSE and Joaquin mines, where Metalla holds a 1.5% and 2% net smelter royalty, respectively, and it was eyeing cash flow from two of its Argentinian assets beginning in the first calendar quarter of 2020.

Inflection points:

  • More royalty deals
  • Coronavirus developments
  • Gold and silver price moves

What the boss says:

In January, Metalla president and CEO Brett Heath spoke to Proactive at the Vancouver resource investment conference, explaining that 2019 had been a highly significant year, which saw the company reach the "next level" in terms of scaling up.

"We've been able to carve out really a niche and a strategy that has allowed us to grow at an exponential rate. Since inception we have completed more transactions than any other royalty company yet we have the smallest team," he said.

"I think we'll really going to be able to continue to scale this company," Heath added, referring to 2020.

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Metalla Royalty & Streaming signs agreement with Morgan Stanley for royalty...

Metalla Royalty & Streaming Ltd (NYSE American: MTA-CVE: TSXV: MTA) President and CEO Brett Heath joined Steve Darling from Proactive with news Metalla has entered into a purchase and sale agreement with Morgan Stanley Capital Group to acquire an existing 27.5% price participation royalty...

2 days, 13 hours ago

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