Metalla Royalty & Streaming well positioned as it continues to leverage its large gold and silver portfolio

Now has 62 royalties/streams Greatest exposure to silver of any publicly-listed royalty company Industry leading growth What Metalla Royalty & Streaming Ltd does: Metalla Royalty & Streaming Ltd (CVE:MTA) (NYSEAMERICAN:MTA) aims to leverage exposure to gold and silver by acquiring royalties and streams to build value. Having 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. Metalla is at an early stage of its growth but is rapidly expanding. Significantly, the group's business strategy is to acquire third-party royalties on assets of the major miners with strong operational experience and balance sheets. In just a few years, the group has acquired 62 royalties/streams over 20 transactions and deployed C$110 million of capital on assets that span the globe. It has a market cap of C$444 million. The firm said it has completed more deals than its peers since its inception in 2016 and outperformed them with a share price compound annual growth rate (CAGR) of 64%. Significantly, it has also 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: Metalla Royalty has been made good progress and has continued to expand in 2021. On June 17. the company revealed that it has bought an existing 1.35% net smelter return (NSR) royalty on part of the Côté gold project in Ontario, where construction of a US$1.3 billion mine started late last year. Côté is owned by Canadian mining major IAMGOLD Corp. and Fortune 500 trading giant Sumitomo and the royalty was bought for C$7.5 million in cash from arm's length sellers. The project is set to become one of Canada's largest gold mines with expected annual output of 493,000 ounces and total cash costs of US$600 per ounce in the first five years.  Côté currently boasts a 7.2 million ounce (Moz) reserve, a measured and indicated resource of 10.2Moz and an inferred resource of 3.8Moz. Metalla's new royalty covers a portion of the northern and north-eastern part of the Côté pit but also all of the Gosselin-Young-Shannon gold project (Gosselin). On the financing front, on May 17 Metalla said it had entered a new equity distribution agreement with a syndicate of agents for a new at-the-market (ATM) equity program. The company said the distribution deal will replace its previous arrangement and will allow the company to distribute up to US$35 million, or the equivalent in Canadian dollars, of common shares in the group under the New ATM Program. The company said proceeds of the sales will be used to finance the future purchase of streams and royalties by the company and for general working capital purposes. In the boardroom, in April Metalla Royalty said it had appointed Douglas Silver to its board as an independent director effective immediately. Silver co-founded International Royalty Corporation, which he helped build into the world's fourth-largest precious metals royalty company before being sold to Royal Gold Inc for C$749 million in 2010. Looking at its results, in March, the company reported US$1.3 million in revenue during the seven-month period ending December 31, 2020, while completing seven transactions to add another 18 royalties to its portfolio. Metalla said it received, or accrued, payments on 1,404 attributable gold equivalent ounces in 2020 at an average realized price of $1,784 and average cash cost of $18 per attributable gold equivalent ounce.   Earlier in the same month, the company announced that it had acquired a 0.5% net smelter return (NSR) royalty on a portion of Barrick Gold’s Alturas-Del Carmen project in Argentina for C$1.6 million in cash from Coin Hodl Inc.  As well, it purchased a 0.45% NSR covering Agnico Eagle’s Amalgamated Kirkland property and Kirkland Lake Gold's North AK Property in Kirkland Lake, Ontario, for C$0.7 million in cash from private third parties.  Also in March, the company revealed a further boost to its portfolio with the acquisition of a further accretive royalty on a large development project in Brazil, namely the CentroGold project, which covers over 2 million ounces of gold. The deal is on an existing 1% to 2% net smelter return royalty (NSR) on OZ Minerals' CentroGold project from Jaguar Mining for up to US$18 million. A recent pre-feasibility study on the asset outlined a seven-year life of mine with output in the first two years expected to average between 190,000 and 210,000 ounces of gold a year, with around 1.1 million ounces (Moz) in the first six years. The announcement came hot on the heels of news that it had acquired a new royalty (0.76% gross value royalty interest) on the Tocantinzinho project owned by Eldorado Gold via a royalty transfer agreement with Sailfish Royalty Corp for US$9 million in cash. What the broker says: In a note to clients on May 11, Roth Capital Partners analysts upgraded their rating for Metalla to ‘Buy’ from ‘Neutral’, while increasing their price target to $11.40 from $10.00. “Our valuation is based on an expectation that the shares should trade at 2.3x net asset value (NAV), which is appropriate given the strong history of adding value through accretive transactions over the past four years,” the analysts said. They noted that Metalla announced four transactions in late 1Q, 2021, adding two new counterparties and one new jurisdiction, Brazil, while further diversifying its royalty portfolio. In Brazil, Tocantinzinho is a fully permitted, high-grade open-pit gold deposit with expected mine life of 10 years. Metalla estimates its Tocantinzinho royalty will generate $2.3 million in revenue annually over the first eight years of mine life and sees exploration potential of the main orebody and surrounding area as prospective, given that drilling has not gone deeper than 400 metres. The company also acquired a 1% to 2% net smelter royalty (NSR) on the CentroGold project, which it called one of the largest undeveloped gold projects in Brazil, with an estimated life of mine production of 1.1 million ounces that could begin operations as soon as 2023 or 2024. Metalla anticipates the mine could produce US$4 million of cash flow annually over the first six years of operation. As well, the company recently acquired a 0.5% NSR on a portion of Barrick Gold's Alturas-Del Carmen gold-silver project in Argentina, part of an 8.9 million, 1.0 grams per tonne (g/t) gold inferred resource. The analysts said the resource has similar characteristics to Barrick’s operating Veladero mine in Argentina. Barrick has indicated it will seek a preliminary economic assessment (PEA) on the project in 2021. And, they also noted that Metalla acquired a 0.45% NSR on Agnico Eagle Mines’ Amalgamated Kirkland and North AK Property in Ontario for C$0.7 million in cash. The analysts said the AK property, along with Upper Beaver and Upper Canada deposits, host a potential 180,000 to 240,000 ounce yearly gold operation. Agnico guided spending of US$14 million during 2021 for 52,200 metres of drilling at the Kirkland Lake project. The Roth Capital analysts noted that their NAV estimate is based on expectations of $1,700 per ounce gold price and $21 per ounce silver price from 2024 onward. Inflection points: More royalty acquisitions Gold and silver price moves Projects coming online What the boss says: Commenting on the company’s purchase of a net smelter return royalty on part of the Côté gold project in Ontario in June, Metalla Royalty & Streaming CEO Brett Heath said: "This transaction provides extraordinary value for Metalla shareholders." "Metalla shareholders will also gain exposure to the full extent of the expected 3-5Moz Gosselin Zone 1.5km northeast of the Côté deposit which has the potential to materially enhance the production profile at Côté in the future," he added. Contact the author at jon.hopkins@proactiveinvestors.com