Metalla Royalty & Streaming Ltd. (TSXV: MTA) (NYSE American: MTA) and Nova Royalty Corp. (TSXV: NOVR) (OTCQB: NOVRF) have announced a definitive agreement to combine in an all-stock deal valued at approximately $190 million. The merger will create a larger royalty and streaming company focused on precious and base metals.
Under the agreement, Nova shareholders will receive 0.36 shares of Metalla for each Nova share they own. This represents a premium of 25% based on recent share prices.
The combined company will hold a portfolio of over 100 royalties and streams on mine projects operated by major miners like Barrick, Newmont, and Glencore. The deal is intended to boost scale, diversify assets, and enhance access to capital.
Nova recently conducted a strategic review process with the goal of maximizing shareholder value. After considering options, the Nova Board determined the merger with Metalla offered the best opportunity.
Both companies’ Boards have unanimously approved the transaction. It still requires shareholder and regulatory approvals before expected completion in late 2023. The merged entity will trade on the NYSE American exchange.
An investment firm called Beedie Capital is investing $15 million and expanding Metalla’s convertible loan facility by $35 million in conjunction with the deal. This will provide capital to fund further acquisitions and growth.
Brett Heath, CEO of Metalla, said the combination creates a clear path to becoming an intermediate royalty company. Nova interim CEO Hashim Ahmed noted the merger provides improved scale, cash flow, and trading liquidity.
The companies believe the increased diversification into copper along with gold and silver will give shareholders exposure to critical metals needed for the energy transition. According to management, the merged portfolio will have peer-leading growth potential.
The better-than-expected inflation numbers are having a positive impact on precious metals (PM) prices. And, depending on how one is invested to provide exposure to gold or silver, the performance varied by a wide margin. Gold commodity prices jumped by 1.3% and silver by 4.5% after the CPI report on Wednesday July 12. With even better performance were mining stocks. What is causing the leap in prices, and is there a preferred category of investment taking preference over the others?
Why the Spike in Precious Metals?
A slowing inflation trend is reviving talk of the Federal Reserve pausing or completely halting rate hikes. The market had already built two rate hikes into prices. At about the same time the U.S. CPI report was released, The Bank of Canada raised its interest rates by 25bp. The EU raised its rates on June 15, meanwhile the U.S. central bank opted not to raise rates in June.
In reaction to a difference in rates available in the U.S. compared to outside in other currencies, the $U.S. dollar tumbled 1% to a low not seen in more than a year against major peers. This made PMs, including gold and silver, a more attractive asset to preserve wealth outside the U.S. And rates have dropped, the 10-year U.S. Treasury that had been trading at 3.94% before the print, and 4.08% as recently as last week, was yielding 3.86% by mid-afternoon.
Performance of PM Related Assets
Looking out since the beginning of July, we find that both gold and silver dipped to their lows last Friday. Additionally, gold mining stocks and silver mining stocks, using GDX and SIL ETFs as proxies, had the most dramatic dip, while gold and silver (expressed in $US dollars) barely went negative on the month.
What we also see is that when gold and silver rise, or fall, there has been an amplification of the move among the mining stocks. On the upside, the magnification of the trend was even more pronounced among junior mining stocks.
While silver junior miners are the top performers MTD at 8.42%, they are closely followed by the gold junior mining stocks at 8.42%. Larger gold mining company stocks returned 5.96%, while gold itself, only returned 2%. Silver edged out the major mining stocks returning 5.92% compared to 5.35% over the 12 day period.
The patten of performance held during the one-day of trading that CPI was released with the gold majors swapping places with silver. And gold, the commodity, up significantly in one trading day but trailing the others by a wide margin.
Investing in the commodities gold or silver is fairly straightforward and can be done with most brokerage accounts today. ETFs are also as easy to trade as a stock. However, the owner receives the weighted average of all the ETFs holdings, less fees.
While individual stock pickers run the risk of reduced diversification among miners, with some understanding of the differences in companies, they may also be able to perform above the average of a broad swath of companies within an ETF for gold, silver, or both.
There are places to look for information on mining companies, the more challenging information to acquire is of the smaller junior miners – the group that have been outperforming. Channelchek can help you discover these companies and provide data, research, and videos, to help build a better understanding before committing to an investment.
Or, to really jump-start your understanding of a host of mining companies, along with those in other exciting but more difficult-to-assess industries, consider coming to Florida in early December for NobleCon19, an investment conference where you can immerse yourself in the information provided directly from Sr. management of many junior miners and along with companies of other exciting industries.
Global Dynamics Have Helped Silver’s Impressive Price Increase
In mid-October, silver performance began outpacing gold, and it has stayed more or less on track since. During this 3.5-month period, silver had better than a 25% gain in value. What’s behind its current strength, and can it continue to outperform not only the mineral it is most closely associated with but the overall stock market as well? Much of the price rise is likely in response to perceived growing demand in much the same way as petroleum prices have risen each time China is rumored to be opening up after their pandemic response, but there is more to the story.
Silver would have more of a tailwind than gold in a growing global economy as it’s an industrial metal with growing utility in manufacturing. Gold is used for primarily for jewelry and a diversifying store of wealth. So this enhances its performance as it gets its value from scarcity like gold, is a precious metal that investors speculate in, and is becoming more in demand to build photovoltaic cells, electronics, and medicines. The appeal of silver can be used as an indicator that investors see the global economy growing stronger, with more demand for industrial metals. While much of the focus surrounding a full opening of China has centered on renewed demand for petroleum, the impact should reach much farther.
Other industrial metals have also gained as Chinese pandemic restrictions have eased. China is the worlds largest consumer of metals, copper and iron-ore futures on Comex each climbed by nearly 11% in January.
In addition to its functional utility, the price increase has also come at a time when uncertainty and in some cases turmoil around the globe has caused investors to seek shelter in precious metals.
There is more causing the strength as well. There is substantially more demand now than before the coronavirus shutdowns because in many parts of the world there is a push toward alternative and clean-energy production. This includes more products with more electrical connectors, the ability to produce power from solar, and other technology that is more in demand now than ever.
Over the same three-month-plus period as above, both gold and silver gained while the ICE U.S. Dollar index, a benchmark for the international value of the dollar, lost over 8%. The Fed slowing its interest rate hikes has had a depressive impact on dollar strength. It now simply takes more dollars to buy the same amount of silver.
Take Away
There are a number of factors why silver has been outperforming gold, the stock market, and the US dollar. These include its reputation as a store of value, parts of the world gearing up for what is expected to be an energy renaissance, the opening of the largest metals consuming country, and a weakening dollar.
Endeavour Silver is a mid-tier precious metals mining company that operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Third quarter production exceeded our estimates. On a silver equivalent basis, third quarter production exceeded our expectations due to higher silver grades at both mines. Compared to the second quarter of 2022, silver production increased 7.3% to 1,458,448 ounces, while gold production decreased 1.0% to 9,194 ounces. Third quarter silver and gold sales amounted to 1,327,325 ounces and 8,852 ounces, respectively. At quarter end, Endeavour held 1,527,548 ounces of silver and 3,210 ounces of gold in bullion inventory and 2,769 ounces of silver and 144 ounces of gold in concentrate inventory. Relative to the end of the second quarter, bullion inventory increased while concentrate inventory declined.
Updating estimates. While production was ahead of our estimates, we had assumed greater sales from inventory. Due to lower than expected sales in the third quarter, we have lowered our net income and earnings per share estimates to $2.0 million and $0.01, respectively, from $5.6 million and $0.03. We have lowered our full year EBITDA and EPS estimates to $42.9 million and $0.09, respectively, from $49.9 million and $0.11. Due to modestly lower 2023 silver and gold pricing assumptions, we have trimmed our 2023 EBITDA and EPS estimates to $53.3 million and $0.11, respectively, from $58.6 million and $0.13.
This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
VANCOUVER, British Columbia, Sept. 26, 2022 (GLOBE NEWSWIRE) — Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) (“Endeavour” or the “Company”) is pleased to report positive drill results from its ongoing drill program at the Guanacevi Mine in Durango state, Mexico. Drilling continues along the prolific Santa Cruz vein in two areas (view Santa Cruz Vein longitudinal section), with the objective to convert, expand, and discover new resources.
The 2022 drill program has continued to focus on the El Curso property, establishing lateral and vertical extents of the mineralized zone between the Porvenir Cuatro and Milache mines. The exploration and exploitation rights to the El Curso property were obtained in 2019 from Ocampo Mining S.A. de CV., and have become an integral contributor to the operation. Recently, under the same agreement terms, the Company has tested the northwest extension of the Porvenir Dos orebody with encouraging results from initial drilling.
Highlights from Recent El Curso Drill Results
3.50 gpt Au and 1,150 gpt Ag for 1,430 gpt AgEq over a 1.16 m ETW, including 12.80 gpt Au and 4,240 gpt Ag for 5,264 gpt AgEq over 0.24 m (UCM-102)
3.54 gpt Au and 1,129 gpt Ag for 1,412 gpt AgEq over a 7.28 m ETW, including 25.40 gpt Au and 7,080 gpt Ag for 9,112 gpt AgEq over 0.43 m (UCM-106)
Highlights from Recent Porvenir Dos Drill Results
1.43 gpt Au and 967 gpt Ag for 1,081 gpt AgEq over a 2.43 m ETW, including 3.64 gpt Au and 5,120 gpt Ag for 5,411 gpt AgEq over 0.23 m (APD-03)
1.60 gpt Au and 1,460 gpt Ag for 1,589 gpt AgEq over a 1.17 m ETW, including 2.91 gpt Au and 3,340 gpt Ag for 3,573 gpt AgEq over 0.25 m (APD-04)
Abbreviations include: gpt: grams per tonne; Au: gold; Ag: silver; ETW: estimated true width; m: metre; HW: hanging wall. Silver equivalents are calculated at a ratio of 80:1 silver:gold.
“We are encouraged by the drill results at Guanacevi, as we continue to delineate high grades in areas which are proximal to the mill and historic working areas. The results announced today demonstrate both growth and steady improvement of the deposit and mine plan,” stated Dan Dickson, Chief Executive Officer. “Our focus remains on delineating mineralized extensions to mining horizons and resource growth.”
Latest Drill Results
The Guanacevi drill results are summarized in the following tables:
Guanacevi – Santa Cruz Vein – El Curso
Hole
Structure
From
To
True Width
Au
Ag
AgEq
(m)
(m)
(m)
(gpt)
(gpt)
(gpt)
UCM-101
Santa Cruz
219.90
221.90
1.10
0.36
101
130
Including
220.55
221.15
0.33
0.29
137
160
UCM-102
Santa Cruz
202.80
205.45
1.16
3.50
1,150
1,430
Including
203.55
204.10
0.24
12.80
4,240
5,264
UCM-103
Santa Cruz
195.00
210.25
6.08
0.97
234
311
Including
208.90
209.35
0.18
5.77
699
1,161
UCM-104
HW Santa Cruz
217.85
221.35
1.25
0.64
310
361
Including
218.55
219.30
0.27
1.12
490
579
UCM-105
Santa Cruz
204.00
210.00
1.80
1.08
508
595
Including
208.45
209.05
0.18
3.06
1,600
1,845
UCM-106
Santa Cruz
202.60
216.15
7.28
3.54
1,129
1,412
Including
208.15
208.95
0.43
25.40
7,080
9,112
UCM-107
Santa Cruz
229.70
232.20
1.32
0.70
123
179
Including
231.50
232.20
0.37
0.62
164
213
UCM-109
Santa Cruz
267.50
269.80
1.01
1.20
521
617
Including
269.30
269.80
0.22
0.93
707
782
UCM-110
Santa Cruz
248.05
253.00
2.47
1.25
321
421
Including
248.95
249.90
0.48
2.43
565
759
Drill holes UCM-108 and UCM-111 returned no significant results
Guanacevi – Santa Cruz Vein – Porvenir Dos
Hole
Structure
From
To
True Width
Au
Ag
AgEq
(m)
(m)
(m)
(gpt)
(gpt)
(gpt)
APD-03
Santa Cruz
286.85
292.60
2.43
1.43
967
1,081
Including
287.85
288.40
0.23
3.64
5,120
5,411
APD-04
Santa Cruz
246.50
248.80
1.17
1.60
1,460
1,589
Including
246.80
247.30
0.25
2.91
3,340
3,573
APD-05
Santa Cruz
190.70
195.05
2.80
1.38
489
599
Including
193.20
193.75
0.35
2.59
943
1,150
APD-06
Santa Cruz
156.05
157.65
1.29
0.34
214
241
Including
157.15
157.65
0.40
0.45
339
375
Drill holes APD-01, APD-02, APD-07 and APD-08 returned no significant results
Notes to Tables
Silver equivalents are calculated at a ratio of 80:1 silver:gold.
All widths are estimated true widths.
No capping has been applied but high-grade intervals have been highlighted.
Qualified Person and Quality Assurance/Quality Control – Dale Mah, P.Geo., Vice President, Corporate Development of Endeavour, is the Qualified Person who reviewed and approved the technical information contained in this news release. A quality control sampling program of reference standards, blanks and duplicates has been instituted to monitor the integrity of all assay results. All samples are split at the local field office and shipped to ALS Labs, where they are dried, crushed, split and 250-gram pulp samples are prepared for analysis. Gold is determined by fire assay with an atomic absorption finish and silver by aqua regia digestion with ICP finish, over-limits by fire assay and gravimetric finish.
About Endeavour Silver – Endeavour is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal of becoming a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation (together, “forward-looking statements”). Such forward-looking statements and information herein include but are not limited to statements regarding future prospects of the Company’s mines and projects. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.
Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, production levels, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include but are not limited to the ultimate impact of the COVID 19 pandemic on operations and results, changes in production and costs guidance, national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; financial risks due to precious metals prices, operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development and risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the Securities and Exchange Commission . and available at www.sec.gov, and Canadian securities regulatory authorities available at www.sedar.com.
Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued exploration and mining operations, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.
VANCOUVER, British Columbia, Sept. 12, 2022 (GLOBE NEWSWIRE) — Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce it has entered into an agreement to sell a 100% interest in Minera Oro Silver de Mexico, S.A. de C.V. (“MOS”), a wholly owned subsidiary of Endeavour to Grupo ROSGO, S.A. de C.V., (“Grupo ROSGO”). MOS holds the El Compas property and the lease on the La Plata processing plant in Zacatecas, Mexico. All references to dollars ($) in this news release are to United States dollars.
Pursuant to the agreement, Grupo ROSGO will pay Endeavour $5 million cash over five years with an initial payment of $250,000 on signing of the definitive agreement. Instalment payments of $500,000 will be made every six months other than the third payment, which will be $750,000. The payments are secured by a pledge of the shares of MOS.
Endeavour CEO, Dan Dickson commented, “We are pleased with the sale of El Compas to Grupo ROSGO as it streamlines our project portfolio and frees up management time to focus on advancing our extensive growth pipeline, including the Terronera project and Pitarrilla.”
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal of becoming a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include but are not limited to statements regarding receipt of installment payments for the sale of El Compas, Endeavour’s anticipated performance in 2022, advancing its extensive growth pipeline, including Terronera and Pitarrilla, the timing and results of various activities and the impact of the COVID 19 pandemic on operations. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.
Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, production levels, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include but are not limited to, failure to receive installment payments of the sale price, the ultimate impact of the COVID 19 pandemic on operations and results, changes in production and costs guidance, national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; financial risks due to precious metals prices, operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development, risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent Form 40F/Annual Information Form filed with the United States Securities and Exchange Commission and available at www.sec.gov, and Canadian securities regulatory authorities and available at www.sedar.com.
Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.
