Tether lifts Metalla stake to 14%

Tether International has raised its stake in Metalla Royalty & Streaming (TSXV, NYSE-A: MTA) to about 14%, deepening the stablecoin group’s push into Canadian gold royalty companies.

The El Salvador-based investment firm bought 149,116 shares on Monday for $1.36 million (C$1.9 million), or $9.14 each, lifting its holding to 13.2 million shares. Metalla’s portfolio includes a 1.5% royalty over part of Iamgold’s (TSX: IMG; NYSE: IAG) Côté mine and all of the adjoining Gosselin deposit in northeastern Ontario, about 175 km northwest of Sudbury and roughly 500 km north of Toronto.

“They recognize the lofty valuations of the senior royalty companies, and undervalued businesses like Metalla have their attention,” CEO Brett Heath wrote in Metalla’s June shareholder letter.

Tether’s steady buying shows one of the crypto sector’s largest pools of capital continuing to move into mining royalties as the group builds its exposure to gold. Royalty stakes give Tether exposure to mine revenue and higher metal prices without taking on mine construction and operating costs, a strategy it began pursuing with a large investment in Elemental Altus Royalties (TSX, Nasdaq: ELE) last year.

Stake building

Tether has bought 1.94 million Metalla shares since June 8, when it held 11.27 million shares, or about 12% of the company. The latest purchase took its holding to about 14%, based on 93.5 million shares outstanding.

The latest early-warning disclosure was required because Tether’s purchases since its June filing exceeded 2% of Metalla’s outstanding shares. Tether described the holding as an investment but left open buying more shares, selling some of its position, engaging with Metalla’s board and management or proposing changes to its capital, ownership or operations.

Metalla shares fell 1.3% to C$12.60 apiece by mid-Wednesday in Toronto, valuing the company at about C$1.2 billion ($851 million).

Metalla holds nearly 100 gold, silver and copper royalties and streams. Its portfolio includes royalties on First Quantum Minerals’ (TSX: FM) Taca Taca copper project in Argentina, Hudbay Minerals’ (TSX, NYSE: HBM) Copper World project in Arizona and G Mining Ventures’ (TSX: GMIN; US-OTC: GMINF) Tocantinzinho gold mine in Brazil.

Gold strategy

Tether made its royalty strategy explicit in June last year when it bought about 32% of Elemental Altus. The company tied that investment to its wider effort to increase exposure to gold and other hard assets.

Tether reported $1.5 billion in second-quarter operating profit and $187.75 billion of assets against $183.64 billion of liabilities at June 30, leaving a $4.11 billion cushion. It added 14 tonnes of physical gold during the quarter, taking its holdings above 146 tonnes.

Separately, the physical gold backing Tether Gold’s XAU₮ tokens totalled 22 tonnes at June 30. Customer holdings rose 9.5% during the quarter even as gold fell 14%.