Metalla Royalty & Streamling Ltd. (MTA) announced two big royalty deals this month, notes resources specialist Brien Lundin, editor of Gold Newsletter — and a participant in MoneyShow's Metals & Mining Virtual Event on April 20-22. Register for free here.
The first deal was with Sailfish Royalty to acquire that company’s 0.75% gross value royalty interest in the Tocantinzinho gold project in northern Brazil, which is operated by Eldorado Gold (EGO).
Tocantinzinho is a construction-ready project with more than two million ounces of gold resources. It is forecast to produce 170,000 ounces per year over a ten-year mine-life. Metalla will spend a total of C$9 million in cash for Sailfish’s royalty on the project.
The second deal was for a royalty on another northern Brazil project — the CentroGold project operated by Australian company OZ Minerals (Australia: OZL). In exchange for a 1%-2% net smelter return royalty on CentroGold, Metalla will pay C$7 million to Jaguar Mining (Toronto: JAG) upon deal-close and up to C$11 million in milestone payments, payable in a combination of cash and shares.
The acquisition adds a royalty on yet another advanced-stage, near-two-million-ounce gold project. Under the deal, Metalla will receive a 1% NSR on the first 500,000 ounces of production, a 2% NSR on the next million ounces of production and a 1% NSR in perpetuity on any remaining production.
It’s great to see Metalla growing its portfolio with projects that have a real shot of converting into cash flow in the medium term. Assets like these should continue to make the company one of the sector’s go-to royalty company names.
The additions build on the reputation Metalla has established as the most active royalty company in terms of acquisitions. Management’s focus remains on adding royalties on projects operated by large producers.
As it stands, the company has posted almost a six-bag gain from our 2017 entry price. As with some of the other big winners on our list, my hope is that you’ve taken some winnings of this stock. Make sure to keep a stake in Metalla, though, as it still has upside left.
