Metalla Royalty & Streaming Ltd (NYSEAMERICAN:MTA) (CVE:MTA) has boosted its portfolio with the acquisition of a 2.5% royalty on Kirkland Lake Gold Ltd’s (TSE:KL) (NYSE:KL) Fosterville gold mine in Australia.
Fosterville produced 619,000 ounces in 2019 at an average grade of 39.6 grams per ton. In 2020, Kirkland Lake is anticipating production of up to 610,000 gold ounces at an operating cost of up to US$150 per ounce.
Vancouver-based Metalla acquired the royalty from Australia’s NuEnergy Gas Limited for A$2 million in cash and 467,730 Metalla shares worth A$4 million.
“This transaction marks our 50th royalty asset in less than four years and we are pleased to add a royalty on an iconic mine for the gold sector and major counterparty in Kirkland Lake into our growing portfolio,” Brett Heath, Metalla’s CEO said in a statement.
The royalty covers the southeastern and northeastern sections of the Fosterville mining lease as well as a large area east and south of the lease, giving Metalla exposure to the southern and northern extensions of the high-grade deposits including the Swan zone, Harrier, and Robbin's Hill.
The CEO pointed out that Metalla was “excited” to partner with NuEnergy using its third-party model and welcome them as a new shareholder.
“The transaction provides NuEnergy with a more efficient way to maximize long-term value through holding the royalty through our equity, provides for immediate and long-term liquidity, exposure to the diversified growing portfolio, and more attractive public market premiums," he added.
The transaction provides Metalla shareholders with exposure to one of the highest-margin gold mines in the world, with strong potential for further high-grade discoveries, according to Heath.
Kirkland Lake currently has nine drill rigs turning on the property as part of a US$70 million to $80 million exploration program.
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