(All dollar amounts are in thousands of
TSXV: MTA
NYSE American: MTA
Metalla shareholders may receive a hard copy of the Company's complete audited financial statements for the year ended
FINANCIAL HIGHLIGHTS
During the year ended
- Effective
December 1, 2023 , acquired all of the issued and outstanding shares of Nova Royalty Corp. ("Nova") pursuant to a plan of arrangement (the "Nova Transaction"). In accordance with the Nova Transaction, Nova shareholders received 0.36 of a common share of Metalla (the "Common Shares") per common share of Nova (For additional details see Nova Royalty Acquisition below); - On
October 19, 2023 , entered into an agreement withBeedie Investments Ltd. ("Beedie"), which became effective at the closing of the Nova Transaction, whereby the parties agreed to amend the convertible loan facility (the "Beedie Loan Facility") between Metalla and Beedie to, among other things, increase the principal amount fromC$25.0 million toC$50.0 million and draw down from the Beedie Loan Facility, at closing of the Nova Transaction, an amount equal to the principal and unpaid interest and fees outstanding under the convertible loan agreement with Nova (the "Nova Loan Facility") to refinance and retire the Nova Loan Facility (For additional details see Nova Royalty Acquisition below); - Completed a private placement, on closing of the Nova Transaction, pursuant to which Beedie subscribed to 2,835,539 Common Shares at a price of
C$5.29 per share for aggregate gross proceeds ofC$15.0 million ; - Acquired 28 royalties and 1 stream, to bring the total held as at the date of this press release to 102 precious and base metals assets, through the following transactions:
- Acquired 23 royalties in the Nova Transaction (For additional details see Nova Royalty Acquisition);
- Acquired an existing 2.5%-3.75% sliding scale Gross Proceeds ("GP") royalty over gold, together with a 0.25%-3.0% Net Smelter Return ("NSR") royalty on all non-gold and silver metals on the majority of Barrick Gold Corporation's ("Barrick") Lama project in
Argentina , from an arm's length seller for aggregate consideration of$7.5 million . The transaction closed onMarch 9, 2023 , at which time the Company paid$2.5 million in cash, and issued 466,827 Common Shares to the seller (with a deemed value of$5.3553 per share). The remaining$2.5 million is payable in cash or Common Shares, within 90 days upon the earlier of a 2 Moz gold Mineral Reserve estimate on the royalty area or 36 months after the closing date; - Acquired one silver stream and three royalties from
Alamos Gold Corp. ("Alamos") for$5.0 million in Common Shares with a deemed value of$5.3228 per share. The transaction closed onFebruary 23, 2023 , at which time the Company issued 939,355 Common Shares to Alamos. The stream and royalties acquired in this transaction include:
- a 20% silver stream over the
Esperanza project located inMorales, Mexico owned by Zacatecas Silver Corp.; - a 1.4% NSR royalty on the Fenn Gibb South project located in
Timmins, Ontario owned by Mayfair Gold Corp.; - a 2.0% NSR royalty on the Ronda project located in Shining Tree,
Ontario owned by PTX Metals Inc.; and - a 2.0% NSR royalty on the Northshore West property located in
Thunder Bay, Ontario owned byNewpath Resources Inc.
- a 20% silver stream over the
- Sold the JR mineral claims that make up the
Pine Valley property, which is part of the Cortez complex inNevada , toNevada Gold Mines LLC ("NGM"), an entity formed byBarrick and Newmont Corporation ("Newmont"), for$5.0 million in cash. The Company has retained a 3.0% NSR royalty on the property. Additionally, sold the Conmee mineral claims that make up theTower Mountain property to Thunder Gold Corp. ("Thunder Gold") for 4,000,000 common shares of Thunder Gold, valued at$0.1 million upon closing. The Company has retained a 2.0% NSR royalty on the property; - Paid a special dividend in the amount of
C$0.03 per share onSeptember 15, 2023 , with a record date ofAugust 1, 2023 ; - For the year ended
December 31, 2023 , received or accrued payments on 3,989 attributable Gold Equivalent Ounces ("GEOs") at an average realized price of$1,867 and an average cash cost of$6 per attributable GEO (see Non-IFRS Financial Measures); - For the year ended
December 31, 2023 , recognized revenue from royalty and stream interests, including fixed royalty payments, of$4.6 million , net loss of$5.8 million , and Adjusted EBITDA of$1.1 million (see Non-IFRS Financial Measures); - For the year ended
December 31, 2023 , generated operating cash margin of$1,861 per attributable GEO from the Wharf,El Realito ,La Encantada , theNew Luika Gold Mine ("NLGM") stream held bySilverback Ltd. ("Silverback"), the Higginsville derivative royalty asset, and other royalty interests (see Non-IFRS Financial Measures); - For the year ended
December 31, 2023 , recognized payments due or received (not included in revenue) from the Higginsville derivative royalty asset of$2.9 million (see Non-IFRS Financial Measures); - On
December 28, 2023 , the Company exercised its right to terminate the equity distribution agreement entered into onMay 27, 2022 (the "2022 ATM Program") under which the Company was entitled to distribute up to$50.0 million (or the equivalent in Canadian Dollars) in Common Shares of the Company. From inception to the date of termination, the Company distributed 1,328,078 Common Shares under the 2022 ATM Program at an average price of$5.01 per share for gross proceeds of$6.6 million , of which none were sold during the three months endedDecember 31, 2023 ; and - On
May 19, 2023 , closed a second supplemental loan agreement to amend the Beedie Loan Facility by:
- extending the maturity date to
May 10, 2027 ; - increasing the loan facility by
C$5.0 million fromC$20.0 million toC$25.0 million ; - increasing the interest rate from 8.0% to 10.0% per annum;
- amending the conversion price of the fourth drawdown from
C$11.16 per share toC$8.67 per share, being a 30% premium to the 30-day Volume Weighted Average Price ("VWAP") of the Company shares measured at market close on the day prior to announcement of the amendment; - amending the conversion price of
C$4.0 million of the third drawdown fromC$14.30 per share toC$7.33 per share, being the 5-day VWAP of the Company shares measured at market close on the day prior to announcement of the amendment, and converting theC$4.0 million into shares at the new conversion price. Upon closing the Company issued Beedie 545,702 Common Shares for the conversion of theC$4.0 million ; and - amending the conversion price of the remaining
C$1.0 million of the third drawdown fromC$14.30 per share toC$8.67 per share, being to the 30-day VWAP of the Company shares measured at market close on the day prior to announcement of the amendment.
- extending the maturity date to
NOVA ROYALTY ACQUISITION
On
Upon completion of the Nova Transaction, existing Metalla and Nova shareholders owned approximately 60.41% and 39.59% of the combined company, respectively.
Nova Royalty
Nova is now a wholly-owned subsidiary of Metalla and is a royalty and streaming company that is focused on acquiring copper royalties and as at the close of the Nova Transaction had a portfolio of 23 royalties including:
- 0.42% NSR royalty on
Taca Taca operated by First Quantum Minerals Ltd.; - 0.315% NSR royalty on the
Copper World Complex operated by Hudbay Minerals Inc.; - 1.0% NSR royalty on Aranzazu operated by Aura Minerals Inc.;
- 0.08% Net Profit Interest ("NPI") royalty on Josemaria operated by Lundin Mining Corp.;
- 0.98% NSR royalty on open pit operations and 0.49% NSR royalty on underground operations on Vizcachitas operated by Los Andes Copper Ltd.;
- 0.25% NSR royalty on Tatogga operated by Newmont Corp.;
- 2.0% NSR royalty on NuevaUnion operated as a 50/50 joint venture between Teck Resources Ltd. and Newmont Corp.; and
- 1.0% Net Proceeds ("NP") royalty on West Wall operated as a 50/50 joint venture between Anglo American plc and Glencore plc.
In connection with the Nova Transaction, Beedie and the Company formed a strategic partnership pursuant to which:
- Beedie subscribed for
C$15.0 million in an equity placement into Metalla; - The parties agreed to amend and increase the existing Beedie Loan Facility; and
- The Nova Loan Facility was repaid and terminated.
Equity Placement
Beedie entered into a subscription agreement to complete a
Metalla Convertible Loan
Effective
- increase the maximum aggregate principal amount of the A&R Loan Facility from
C$25.0 million toC$50.0 million ; - amend the conversion price of the C$4.2 million due under the Beedie Loan Facility to a conversion price of
C$6.00 per share under the A&R Loan Facility; - drawdown a further
C$12.2 million from the A&R Loan Facility with a conversion price ofC$6.00 per share to refinance the principal amount due under the Nova Loan Facility; - drawdown
C$2.0 million from the A&R Loan Facility to refinance the accrued and unpaid interest outstanding under the Nova Loan Facility at the close of the Nova Transaction, with a conversion price equal to the market price of the shares of Metalla at the time of conversion; - drawdown
C$0.8 million from the A&R Loan Facility to refinance the accrued and unpaid fees outstanding under the Nova Loan Facility at the close of the Nova Transaction, with such amounts not being convertible into shares of Metalla; - establish an 18-month period during which the interest of 10.0% per annum compounded monthly will be added to the accrued and unpaid interest amount, and on
June 1, 2025 , reverting to a cash interest payment of 10.0% on a monthly basis; - incur an amendment fee of
C$0.1 million and any outstanding costs and expenses are to be paid by Metalla; and - update the existing security arrangements to include security provided by Nova and certain other subsidiaries of Metalla and Nova for the A&R Loan Facility, along with updated security arrangements at Metalla to reflect developments in our business.
- increase the maximum aggregate principal amount of the A&R Loan Facility from
Subsequent to
Nova Convertible Loan
As per the A&R Loan Facility and as discussed above, concurrent with closing of the Nova Transaction, Metalla drew down on the A&R Loan Facility and paid out and discharged all obligations under the Nova Loan Facility, which was terminated concurrently.
ASSET UPDATES
Below are updates during the three months ended
On
Metalla accrued 79 GEOs from
Metalla holds a 100% Gross Value Returns ("GVR") royalty on gold produced at the
On
Metalla accrued 267 GEOs from
Metalla holds a 2.0% NSR royalty on the
Wharf
On
Metalla accrued 305 GEOs from Wharf for the fourth quarter of 2023 and 1,008 GEOs for the 2023 fiscal year.
Metalla holds a 1.0% GVR royalty on the Wharf mine.
Aranzazu
On
Metalla accrued 67 GEOs from Aranzazu for the period from
Metalla holds a 1.0% NSR royalty on the Aranzazu mine.
New Luika
On
Metalla accrued 22 GEOs from NLGM for the fourth quarter of 2023 and 113 GEOs for the 2023 fiscal year.
Metalla holds a 15% interest in Silverback, whose sole business is receipt and distribution of a 100% silver stream on NLGM at an ongoing cost of 10% of the spot silver price.
Côté-Gosselin
In a news release dated
On its news release dated
Metalla holds a 1.35% NSR royalty that covers less than 10% of the Côté Reserves and Resources estimate and covers all of the Gosselin Resource estimate.
On
In 2024, Agnico also stated it expects to spend
Metalla holds a 2.5% GVR royalty on the northern and southern extensions of the
Endeavor
On
On
Metalla holds a 4.0% NSR royalty on lead, zinc and silver produced from Endeavor.
On,
Metalla holds a 0.315% NSR royalty on
Amalgamated
On
Metalla holds a 0.45% NSR royalty on the Amalgamated Kirkland and North AK properties.
Tocantinzinho
On
Metalla holds a 0.75% GVR royalty on Tocantinzinho.
Wasamac
On
Metalla holds a 1.5% NSR royalty on the Wasamac project subject to a buyback of 0.5% for
On
Metalla holds a 5.0% NSR royalty on the South Domes area of the
On
Metalla holds a 2.0% NSR Royalty on
La Parrilla
Through multiple press releases dated
Silver Storm also announced its plan to release a technical study and mine plan to support future restart of mining and processing with a target of mid-2025.
Metalla holds a 2.0% NSR royalty on La Parrilla.
Fifteen
On
Metalla holds a 1.0% NSR royalty on the Fifteen
Akasaba West
On
Metalla holds a 2.0% NSR royalty on the Akasaba West project subject to a 210 Koz gold exemption.
Montclerg
On
Metalla holds a 1.0% NSR royalty on the Montclerg property.
Camflo
On
Metalla holds a 1.0% NSR royalty on the Camflo mine, located ~4km northeast of the Canadian Malartic operation.
Detour DNA
On
Metalla holds a 2.0% NSR royalty on the Detour DNA property which is approximately 7 km west of the Detour West reserve pit margin.
MANAGEMENT UPDATE
Effective
"I want to thank Drew for his contributions to the company during his tenure," said
QUALIFIED PERSON
The technical information contained in this news release has been reviewed and approved by
ABOUT METALLA
Metalla is a precious and base metals royalty and streaming company with a focus on gold, silver, and copper royalties and streams. Metalla provides shareholders with leveraged metal exposure through a diversified and growing portfolio of royalties and streams. Our strong foundation of current and future cash-generating asset base, combined with an experienced team gives Metalla a path to become one of the leading gold, silver, and copper companies for the next commodities cycle.
For further information, please visit our website at www.metallaroyalty.com
ON
(signed) "Brett Heath"
President and CEO
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accept responsibility for the adequacy or accuracy of this release.
Non-IFRS Financial Measures
Metalla has included certain performance measures in this press release that do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS) including (a) attributable gold equivalent ounces (GEOs), (b) average cash cost per attributable GEO, (c) average realized price per attributable GEO, (d) operating cash margin per attributable GEO, and (e) adjusted EBITDA. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow.
(a) Attributable GEOs
Attributable GEOs are a non-IFRS financial measure that is composed of gold ounces attributable to the Company, plus an amount calculated by taking the revenue earned by the Company in the period from payable silver, copper and other metals ounces attributable to the Company divided by the average
Attributable GEOs during the period from: | |
Higginsville (1) | 1,476 |
Wharf | 1,008 |
1,066 | |
259 | |
Aranzazu | 67 |
NLGM | 113 |
Total attributable GEOs | 3,989 |
(1) | The Higginsville participation royalty has reached full 34,000 gold ounce threshold and is no longer payable to Metalla. |
(b) Average cash cost per attributable GEO
Average cash cost per attributable GEO is a non-IFRS financial measure that is calculated by dividing the Company's total cash cost of sales, excluding depletion by the number of attributable GEOs. The Company presents average cash cost per attributable GEO as it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies in the precious metals mining industry who present results on a similar basis. The Company's average cash cost per attributable GEO for the year ended
Cost of sales for NLGM | |
Total cash cost of sales | 22 |
Total attributable GEOs | 3,989 |
Average cash cost per attributable GEO |
(c) Average realized price per attributable GEO
Average realized price per attributable GEO is a non-IFRS financial measure that is calculated by dividing the Company's revenue, excluding any revenue earned from fixed royalty payments, and including cash received or accrued in the period from derivative royalty assets, by the number of attributable GEOs sold. The Company presents average realized price per attributable GEO as it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies in the precious metals mining industry that present results on a similar basis. The Company's average realized price per attributable GEO for year ended
Royalty revenue (excluding fixed royalty payments) | |
Payments from derivative assets | 2,866 |
Revenue from NLGM | 220 |
Sales from stream and royalty interests | 7,446 |
Total attributable GEOs sold | 3,989 |
Average realized price per attributable GEO |
(d) Operating cash margin per attributable GEO
Operating cash margin per attributable GEO is a non-IFRS financial measure that is calculated by subtracting the average cast cost price per attributable GEO from the average realized price per attributable GEO. The Company presents operating cash margin per attributable GEO as it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies in the precious metals mining industry that present results on a similar basis.
(e) Adjusted EBITDA
Adjusted EBITDA is a non-IFRS financial measure which excludes from net income taxes, finance costs, depletion, impairment charges, foreign currency gains/losses, share based payments, and non-recurring items. Management uses Adjusted EBITDA to evaluate the Company's operating performance, to plan and forecast its operations, and assess leverage levels and liquidity measures. The Company presents Adjusted EBITDA as it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies in the precious metals mining industry who present results on a similar basis. However, Adjusted EBITDA does not represent, and should not be considered an alternative to net income (loss) or cash flow provided by operating activities as determined under IFRS. The Company's adjusted EBITDA for year ended
Net loss | |
Adjusted for: | |
Royalty interest impairment | 2,355 |
Gain on sales of mineral claims | (5,093) |
Interest expense | 1,170 |
Finance charges | 206 |
Loss on modification of loan payable | 1,658 |
Income tax provision | 1,361 |
Depletion | 2,389 |
Foreign exchange loss (gain) | 610 |
Share-based payments | 2,255 |
Adjusted EBITDA |
Refer the Company's MD&A for the year ended
Technical and Third-Party Information
Metalla has limited, if any, access to the properties on which Metalla(or any of its subsidiaries) holds a royalty, stream or other interest. Metalla is dependent on (i) the operators of the mines or properties and their qualified persons to provide technical or other information to Metalla, or (ii) publicly available information to prepare disclosure pertaining to properties and operations on the mines or properties on which Metalla holds a royalty, stream or other interest, and generally has limited or no ability to independently verify such information. Although Metalla does not have any knowledge that such information may not be accurate, there can be no assurance that such third-party information is complete or accurate. Some information publicly reported by operators may relate to a larger property than the area covered by Metalla's royalty, stream or other interests. Metalla's royalty, stream or other interests can cover less than 100% and sometimes only a portion of the publicly reported mineral reserves, resources and production of a property.
Unless otherwise indicated, the technical and scientific disclosure contained or referenced in this press release, including any references to mineral resources or mineral reserves, was prepared in accordance with Canadian NI 43-101, which differs significantly from the requirements of the
"Inferred mineral resources" have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Historical results or feasibility models presented herein are not guarantees or expectations of future performance.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable securities legislation. The forward-looking statements herein are made as of the date of this press release only and the Company does not intend to and does not assume any obligation to update or revise them except as required by applicable law.
All statements included herein that address events or developments that we expect to occur in the future are forward-looking statements. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects", "is expected", "budgets", "scheduled", "estimates", "forecasts", "predicts", "projects", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements in this press release include, but are not limited to, statements regarding: future events or future performance of Metalla; the completion of the Company's royalty purchase transactions; the Company's plans and objectives; the Company's future financial and operational performance; expectations regarding stream and royalty interests owned by the Company; the satisfaction of future payment obligations, contractual commitments and contingent commitments by Metalla; the future achievement of any milestones in respect of the payment or satisfaction of contingent consideration by Metalla; the future availability of funds, including drawdowns pursuant to the Beedie Loan Facility (as amended or supplemented); the effective interest rate of drawdowns under the Beedie Loan Facility (as amended or supplemented) and the life expectancy thereof; the future conversion of funds drawn down by Metalla under the Beedie Loan Facility (as amended or supplemented); the amount that Metalla has to pay under the Beedie Loan Facility and the applicable exchange rate; the completion by property owners of announced drilling programs, capital expenditures, and other planned activities in relation to properties on which the Company and its subsidiaries hold a royalty or streaming interest and the expected timing thereof; production and life of mine estimates or forecasts at the properties on which the Company and its subsidiaries hold a royalty or streaming interest; future disclosure by property owners and the expected timing thereof; the completion by property owners of announced capital expenditure programs; the progress on project pre-development and engineering works at Taca Taca; the receipt of approval for the Environmental and Social Impact Assessment, and the construction and operation permits, for
Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Forward-looking statements are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Metalla to control or predict, that may cause Metalla's actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to: ; risks related to commodity price fluctuations; the absence of control over mining operations from which Metalla will purchase precious metals pursuant to gold streams, silver streams and other agreements or from which it will receive royalty payments pursuant to net smelter returns, gross overriding royalties, gross value royalties and other royalty agreements or interests and risks related to those mining operations, including risks related to international operations, government and environmental regulation, delays in mine construction and operations, actual results of mining and current exploration activities, conclusions of economic evaluations and changes in project parameters as plans are refined; risks related to exchange rate fluctuations; that payments in respect of streams and royalties may be delayed or may never be made; risks related to Metalla's reliance on public disclosure and other information regarding the mines or projects underlying its streams and royalties; that some royalties or streams may be subject to confidentiality arrangements that limit or prohibit disclosure regarding those royalties and streams; business opportunities that become available to, or are pursued by, Metalla; that Metalla's cash flow is dependent on the activities of others; that Metalla has had negative cash flow from operating activities in the past; that some royalty and stream interests are subject to rights of other interest-holders; that Metalla's royalties and streams may have unknown defects; risks related to Metalla's two material assets, the Côté property and the Taca Taca property; risks related to general business and economic conditions; risks related to global financial conditions, geopolitical events and other uncertainties; risks related to epidemics, pandemics or other public health crises, including COVID-19 global health pandemic, and the spread of other viruses or pathogens, and the potential impact thereof on Metalla's business, operations and financial condition; that Metalla is dependent on its key personnel; risks related to Metalla's financial controls; dividend policy and future payment of dividends; competition; that project operators may not respect contractual obligations; that Metalla's royalties and streams may be unenforceable; risks related to conflicts of interest of Metalla's directors and officers; that Metalla may not be able to obtain adequate financing in the future; risks related to Metalla's current credit facility and financing agreements; litigation; title, permit or license disputes related to interests on any of the properties in which Metalla holds, or may acquire, a royalty, stream or other interest; interpretation by government entities of tax laws or the implementation of new tax laws; changes in tax laws impacting Metalla; risks related to anti-bribery and anti-corruption laws; credit and liquidity risk; risks related to Metalla's information systems and cyber security; risks posed by activist shareholders; that Metalla may suffer reputational damage in the ordinary course of business; risks related to acquiring, investing in or developing resource projects; risks applicable to owners and operators of properties in which Metalla holds an interest; exploration, development and operating risks; risks related to climate change; environmental risks; that the exploration and development activities related to mine operations are subject to extensive laws and regulations; that the operation of a mine or project is subject to the receipt and maintenance of permits from governmental authorities; risks associated with the acquisition and maintenance of mining infrastructure; that Metalla's success is dependent on the efforts of operators' employees; risks related to mineral resource and mineral reserve estimates; that mining depletion may not be replaced by the discovery of new mineral reserves; that operators' mining operations are subject to risks that may not be able to be insured against; risks related to land title; risks related to international operations; risks related to operating in countries with developing economies; risks related to the construction, development and expansion of mines or projects; risks associated with operating in areas that are presently, or were formerly, inhabited or used by indigenous peoples; that Metalla is required, in certain jurisdictions, to allow individuals from that jurisdiction to hold nominal interests in Metalla's subsidiaries in that jurisdiction; the volatility of the stock market; that existing securityholders may be diluted; risks related to Metalla's public disclosure obligations; risks associated with future sales or issuances of debt or equity securities; risks associated with the Company's loan facility; that there can be no assurance that an active trading market for Metalla's securities will be sustained; risks related to the enforcement of civil judgments against Metalla; risks relating to Metalla potentially being a passive "foreign investment company" within the meaning of
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