Mr. Brett Heath of Metalla Royalty reports
METALLA ADDS ROYALTY ON AGNICO EAGLE S AKASABA WEST DEVELOPMENT PROJECT
Metalla Royalty and Streaming Ltd. has acquired a 2-per-cent net smelter return royalty on the Akasaba West property from Alexandria Minerals Corp.,pursuant to a royalty purchase and sale agreement dated May 11, 2018. Pursuant to the agreement, Metalla and the seller have entered into an assignment and assumption agreement, pursuant to which the Royalty has been transferred from the seller to Metalla.
The Akasaba West property is a gold-copper deposit located in the Bourlamaque and Louvicourt townships (Val d'Or, Que.). The Akasaba West property is owned and operated by Agnico Eagle Mines Ltd. Agnico acquired the project from the seller in 2014, and has continued previous permitting and development activities, with a view to commencing mining activities in 2020. The royalty has been acquired for an aggregate purchase price of $250,000 in cash. Agnico will maintain the right to buy back 1 per cent for $7-million, and the royalty will be payable after gold production on the claims comprising the property has exceeded 210,000 ounces.
Brett Heath, president and chief executive officer of Metalla, commented: "We view this royalty as a great option on further exploration success at the Akasaba West property from one of the world's top gold producers. The property sits in the famous Cadillac-Larder Lake fault zone, which has produced some of Canada's most well-known mines such as Agnico's Canadian Malartic, Goldex, LaRonde and Lapa mines (as well as Iamgold's Westwood gold mine). Further, we will be adding another top-tier counterparty in Agnico Eagle to the portfolio."
Akasaba West property
Agnico acquired the Akasaba West gold-copper deposit in 2014. Located less than 30 kilometres from Goldex, the deposit could create flexibility and synergies for Agnico's operations in the Abitibi region by using extra milling capacity at both Goldex and LaRonde, while reducing overall unit costs. According to Agnico, the Akasaba West property currently hosts probable gold reserves of approximately 145,000 ounces (5.2 million tonnes at 0.87 gram per tonne gold and 0.49 per cent copper) and an indicated gold resource of approximately 49,000 ounces (2.2 million tonnes at 0.7 g/t gold and 0.41 per cent copper) as of Dec. 31, 2017.
The public hearing process has been completed at the Akasaba West property and permitting activities are expected to continue through early 2018. Based on Agnico's internal technical study, the Akasaba West property deposit has the potential to produce approximately 20,000 to 25,000 ounces of gold and 8.5 to 10 million pounds of copper per year for the first four to five years. The average total cash costs to produce gold are estimated to be approximately $400 (U.S.) per ounce. Capital costs (including closure costs) are estimated to be approximately $50-million. Mining activities are expected to begin on the project in 2020.
The seller filed a National Instrument 43-101 technical report, dated March 1, 2013 (available on SEDAR), stating that the Akasaba West zone pit had an inferred resource of 14,863,740 tonnes of 0.69 g/t gold containing 332,074 ounces and 0.41 per cent copper containing 61,255,885 kilograms.
No brokerage or finder's fees are payable in association with the transaction.
About Metalla Royalty and Streaming Ltd.
Metalla is a precious metal royalty and streaming company. Metalla provides shareholders with leveraged precious metal exposure through a diversified and growing portfolio of royalties and streams. Its strong foundation of a 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 commodity cycle.
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