Metalla Royalty & Streaming Ltd (NYSEAMERICAN:MTA) (CVE:MTA) said it has acquired a 1% net smelter return royalty (NSR) on Minera Alamos' (CVE:MAI) La Fortuna gold mine project in Durango State, Mexico, where construction is expected to begin in 2022.
The royalty and streaming group has exercised its option with Alamos Gold Corp (NYSE:AGI) (TSE:AGI), which owns the NSR, for a total consideration of US$1 million.
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"We are pleased to acquire another development royalty on a quality gold project in Mexico," said Brett Heath, Metalla's CEO in a statement.
"This royalty enhances our already robust footprint in Mexico and provides shareholders with exposure to a medium-term development project and potential exploration success within the land package."
In a 2018 preliminary economic assessment released in August 2018, La Fortuna is envisioned as an open-pit milling operation expected to produce an average of 50,000 ounces of gold-equivalent over a 5-year mine life at an all-in sustaining cost of US$440 per ounce.
The after-tax net present value (NPV), at a 7.5% discount rate, was pegged at US$69.8 million, an internal rate of return (IRR) of 93% and an 11-month payback, assuming gold at US$1,250 per ounce, silver at US$16 per ounce and copper at US$2.60 per pound.
Minera Alamos has said it has procured major mill components and is currently negotiating a debt package for a 12-month build phase and expects to receive permits in the second half of 2020, with construction expected to begin in 2022.
Within the project’s footprint, Minera Alamos has found other major gold-bearing structures that exhibit a similar style of mineralization, including the Ramada, PN Zone and Cerro Pelo.
In April, 2019 Metalla acquired, from Alamos Gold, an option to acquire the NSR for a deposit of US$400,000 in Metalla shares upon completion of satisfactory due diligence.
It allowed Metalla to complete the acquisition for a further US$600,000 in cash, which has now been paid.
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