Metalla Royalty acquires 5% NSR on part of Equinox's Castle Mountain gold mine in California for $15M
(Kitco News) - Metalla Royalty & Streaming (NYSE American: MTA) (TSXV: MTA) announced Monday that it has entered into a royalty purchase agreement to acquire an existing 5% net smelter return royalty ("NSR") on the South Domes portion of the Castle Mountain gold mine owned by Equinox Gold for a total consideration of $15 million in cash.
Castle Mountain is an operating heap leach and mill gold mine located in California, USA north of Equinox's Mesquite mine. The company said that Castle Mountain is poised to become one of the USA's largest gold mines with an expected annual output of 218Koz and total all-in sustaining cost of $858/oz over the 14-year Phase 2 mine plan.
Castle Mountain currently boasts 4.2Moz of gold reserves, of which South Domes covers 1.1Moz gold reserves. Equinox has outlined the potential to expand the 2021 Feasibility Mineral Reserve pits to ultimately connect the JSLA and South Domes pits, the company added in its statement.
President and CEO Brett Heath commented, "The Castle Mountain royalty provides Metalla shareholders with exceptional long-term exposure to a significant property operated by one of the industry's premier operators. Metalla shareholders will gain a meaningful 5% NSR on reserves and resources of nearly 2 million ounces of gold on a mine expected to produce in excess of 200 Koz annually."
Metalla noted that consideration paid by the company in the transaction will be comprised of an initial upfront payment of $10 million in cash at closing, with the remaining $5 million to be paid within twenty months from the closing date bearing interest at a rate of 4% per annum from the closing date.