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SilverUSD 23.17

Santa Gertrudis Royalty

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Santa Gertrudis is the most recent acquisition by Agnico which closed in November 2017 for US$80 million (CAD$105 million) in cash. Metalla acquired a 2% NSR on the Property for US$12 million, 1% of which can be bought back at any time for US$7.5 million. Metalla views the Property as having strong resource expansion potential on its large 42,000-hectare land package. The Property produced over 550,000 ounces of gold in the 1990’s at an average head grade of 2.13 g/t gold.

Since Agnico has acquired the Property, they have started an initial drilling program that consists of 28,000 metres with a budget of approximately C$9.5 million, focused on the evaluation of known mineralized zones with an updated PEA expected in 2019.

Northern Sonora Mexico, where the Property is located, has three northwest-trending mineralization corridors, which each have distinctive regional geological features. Santa Gertrudis covers a potential strike length of 25 km of the favourable Cretaceous-age Intra-caldera sedimentary belt. The mineralized deposits form trends that are hosted mainly by the sedimentary Mural Formation but are not restricted to this unit. There is a distance of 18 km between the northernmost and southernmost mineralized deposits with the balance remaining to be explored.

In the third quarter of 2018, 13,120 metres were drilled in 89 holes mainly in the Becerros, Toro, Escondida, Viviana and Trinidad zones.  The third quarter drilling almost completes 2018’s program to validate and confirm the most recent historical mineral resource estimates. Results so far have been positive with the discovery of the high-grade structurally controlled Centauro Zone, where hole SGE18-067 intersected 7.0 g/t gold over 4.0 metres at 43 metres depth.  Centauro aligns well with, and may represent a projection of, the Camello area (part of Becerros Zone) 300 metres to the west.  Centauro potentially also lies at the intersection of the Corral and Toro trends.

Agnico expects to report their initial mineral resource estimate for Santa Gertrudis in mid-February 2019.

Interest: 2% NSR Royalty

Location: Sonora, Mexico

Project Status: Development

Counterparty: Agnico Eagle Mines Limited (NYSE:AEM)

In 2014, GoGold published a mineral resource estimate as summarized in the following table:

Santa Gertrudis Mineral Resources(1-5)
Indicated Inferred
Type Cut-off Au g(1) kTonnes Au g/t Au kOunces kTonnes Au g/t Au kOunces
Oxide 0.16 22,072.3 1.06 751.2 6,696.8 0.96 207.1
Mixed 0.25 815.8 1.47 38.5 851.5 1.44 39.4
Sulphide 0.60 174.2 1.90 10.6 4.2 2.32 0.3
Amelia Pads 0.20 244.3 1.19 9.4 192.5 1.25 7.7
Total 23,306.6 1.08 809.7 7,745.0 1.02 254.5

(1) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. (2) The mineral resources in this estimate were calculated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines as prepared by the CIM Standing Committee on Reserve Definitions, as well as the requirements of National Instrument 43-101. (3) All resources are reported within an optimized pit shell developed using the following economic parameters: Gold Price $1,300 per ounce. G&A cost $0.80 per tonne. Mining cost $1.40 per tonne. Processing cost $4.00 per tonne for oxides, carbonaceous oxides and mixed oxide/sulphide deposits, and $22.00 per tonne for sulphides. Process recoveries used are 75% for oxides and leach pad material, and 50% for mixed oxide/sulphide deposits, and 90% for sulphides. Optimized pit slopes are 50 degrees. (4) The mineral resource table incorporates 35 deposits and associated optimized pit shells as well as three leach pads. (5) TECHNICAL REPORT, UPDATED RESOURCE ESTIMATE ON THE SANTA GERTRUDIS GOLD PROPERTY, SONORA STATE, MEXICO FILED ON SEDAR ON AUGUST 1, 2014 BY GOGOLD RESOURCES INC