Metalla Royalty & Streaming Ltd. (MTA:TSX.V; MTA:NYSE American) posted a strong Q4/21 despite higher general and administrative (G&A) expenses, reported Haywood Securities analyst Kerry Smith in a March 29 research note.
"Gold equivalent ounces came in above our expectations, however, financials were a slight miss," Smith wrote. "We recommend investors accumulate shares at current levels."
The analyst reviewed the numbers. As for total attributable gold equivalent ounces, they amounted to 772 during Q4/21, higher than Haywood's estimate 731. Smith attributed this to better-than-expected production at COSE and Joaquin. Total gold equivalent ounces for full year 2021 also was a beat, coming in at 2,915 versus Haywood's forecast of 2,874.
Looking to 2022, Metalla has guided to total gold equivalent ounce production of between 2,500 and 3,500. Haywood's projection falls within that range, at 3,100 gold equivalent ounces.
Smith pointed out that the financial misses during Q4/21 were cash flow from operations, adjusted EBITDA and cash flow per share.
Metalla's Q4/21 cash flow from operations before working capital changes was US$1,397,000 (US$1.397M). This compares to Haywood's predicted US$1.774M. This was due to higher-than-anticipated G&A expenses.
Q4/21 adjusted EBITDA was (US$1.337M), worse than Haywood's estimate of (US$918,000) [US$918K]. The quarter's cash flow per share was (US$299K), also below Haywood's expectation, US$487K.
At year-end 2021, Metalla had about US$2.3M in cash, down from its US$10M balance at Q3/21's end. This drop resulted from the company acquiring a 5% net smelter return royalty on Equinox's Castle Mountain gold mine.
In light of the precious metals company's Q4/21 and FY21 financial results, Haywood revised its model on the company with regard to expectations in 2022. The investment firm decreased its expected gold equivalent ounces to 3,100 from 3,331. Also, it lowered its expected cash flow to US$0.04 per share from US$0.05.
Haywood has a Buy rating and a CA$14 per share target price on Metalla. Currently, its share price is around CA$8.94.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures For Haywood Securities Inc., Metalla Royalty & Streaming Ltd., March 29, 2022
This report may be distributed in the following states: nil. Otherwise, this report may only be distributed into those states with an institutional buyer state securities registration exemption.
Analyst Certification: I, Kerry Smith, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.
Of the companies included in the report the following Important Disclosures apply:
Haywood Securities, Inc. has reviewed lead projects of Osisko Gold Royalties Ltd. and a portion of the expenses for this travel may have been reimbursed by the issuer.
Haywood Securities Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Osisko Gold Royalties Ltd. and Nomad Royalty Co. Ltd. in the past 12 months.
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