VANCOUVER, British Columbia, Dec. 22, 2017 (GLOBE NEWSWIRE) -- Metalla Royalty & Streaming Ltd. (“Metalla” or the “Company”) (CSE:MTA) (OTCQX:MTAFF) (FRANKFURT:X9CP) is pleased to provide and update on its 2% net smelter return (“NSR”) royalty covering the Joaquin project ("Joaquin") under development by Pan American Silver Corp. (“Pan American”) (NASDAQ:PAAS), as disclosed by Pan American by way of a news release on December 21, 2017 (the “Pan American Disclosure”).
Pan American has announced that it finalized a preliminary feasibility study on the La Morocha deposit, which is part of Joaquin, located in Santa Cruz, Argentina. The study recommends the development of the La Morocha deposit as an underground mine, with processing to occur at Pan American's Manantial Espejo mill. Based on the results of a preliminary feasibility study, Pan American's Board of Directors has approved a capital investment of approximately $37.8 million to construct the La Morocha underground mine and fund activities up to the point of commercial production (excluding $3.6 million of reimbursable value-added tax ("VAT")). Pan American intends to prepare a technical report pursuant to National Instrument 43-101 - Standards of Disclosure for Mining Projects ("NI 43-101") and file on SEDAR (www.sedar.com).
“The Joaquin royalty will be a great addition to Metalla’s existing producing portfolio when it comes online. Shareholders should benefit from an annualized 17% increase in production starting in 2019, cash flow and geographical diversification, and add a top tier operator. The preliminary feasibility study only represents a small part of the overall potential of Joaquin. The investment by Pan American shows their commitment and confidence in the Joaquin project, and it looks to hold a significant amount of potential for future years past 2021,” commented Brett Heath, President and CEO of Metalla.
La Morocha Preliminary Feasibility Study Highlights (as set out in the Pan American Disclosure):
- Ore to be delivered to Manantial Espejo for processing is estimated to be 474 thousand tonnes at 721 grams per tonne of silver.
- Life-of-mine recovered silver ounces are estimated at 8.9 million and account for 96% of the total estimated project revenue. Total recovered gold ounces are estimated at 5,100.
- Metallurgical test work confirms that the Manantial Espejo mill is suited to process the ore from La Morocha at a slightly higher cost per tonne than the ore from Manantial Espejo. Silver and gold recovery is estimated to average 81%.
- An estimated mine production and ore transport rate of 600 tonnes per day during peak operations.
- The mining method will be primarily post pillar cut and fill using unconsolidated mine development waste rock for backfill.
- Ore will be hauled to surface by mine trucks and then transported by road to the Manantial Espejo processing facility, located 145 kilometres to the south of Joaquin.
- Development of the underground access decline ramp is scheduled to begin in the second quarter of 2018, with first ore production starting in late 2019 and running until the end of 2021.
- The estimated $37.8 million project development capital investment (excluding $3.6 million of reimbursable VAT) is scheduled to be incurred during 2018 and 2019, and is anticipated to be funded from the cash flow generated through the Company's operating activities.
METALLA ESTIMATED PRODUCTION FROM JOAQUIN(1)
Based on the Pan American Disclosure, Metalla estimates that future production and cash flow from the Joaquin project will be:
|Silver (“Ag”) ounces||16,000 oz Ag||86,000 oz Ag||76,000 oz Ag|
|Gold (“Au”) ounces||20 oz Au||56 oz Au||26 oz Au|
|Estimated Cash Flow CAD dollars (2)(3)||$375,920||$1,942,084||$1,680,464|
(1) Based on Metalla’s 2% NSR royalty on guidance given by Pan American, subject to standard development risks from the project moving from PFS to Production. (Not included in Metalla’s production guidance)
(2) Based on $17 silver per ounce and $1,200 gold per ounce and exchange rate of 1.27 USD/CAD
(3) Not including NSR deductions and potential taxQualified Person
The technical information contained in this news release has been reviewed and approved by Charles Beaudry, geologist M.Sc., member of the Association of Professional Geoscientists of Ontario and of the Ordre des Géologues du Québec and a director of Metalla. Mr. Beaudry is a QP as defined in “National Instrument 43-101 Standards of disclosure for mineral projects.
Metalla is a precious metals royalty and streaming company. Metalla provides shareholders with leveraged precious metal exposure through a diversified 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 and silver companies for the next commodities cycle.