Mr. Brett Heath of Metalla reports

METALLA AND NOVA COMBINE TO BUILD THE NEXT INTERMEDIATE ROYALTY COMPANY

Metalla Royalty & Streaming Ltd. and Nova Royalty Corp. have entered into an arrangement agreement dated Sept. 7, 2023, whereby Metalla will acquire all of the issued and outstanding common shares of Nova pursuant to a plan of arrangement, positioning the combined company as a leading emerging intermediate royalty company. (All dollar amounts are in thousands of U.S. dollars unless otherwise indicated, except for per-ounce and per-share amounts.)

Combination highlights and strategic rationale

The transaction combines complementary portfolios, resulting in:

• Enhanced scale and superior growth -- combined company is expected to have industry-leading growth through a combined portfolio of 105 high-quality royalties and streams with upward of two decades of sustainable growth being advanced by top-tier operators in the mining sector, including First Quantum Minerals, Newmont, Hudbay Minerals, Agnico Eagle, Barrick, BHP, Glencore, Lundin Mining, Teck Resources, Iamgold, Equinox Gold and others;
• Strategic positioning and improved capital markets profile -- strategically positions the combined company as a peer-leading royalty company in scale and capital markets profile, expected to bolster trading liquidity and attract greater support from institutional investors;
• Attractive jurisdictional risk profile and asset quality -- nearly all assets are in Tier 1 jurisdictions (Canada, the United States and Australia) and Latin America, with top 10 assets by consensus net asset value (NAV) having a peer-leading average mine life of 20 years and an average operator market capitalization of $13-billion;
• Strengthened balance sheet and access to capital -- strategic partner Beedie Capital to commit to an equity investment of $15-million (Canadian) and increase Metalla's existing convertible loan facility to $50-million (Canadian) (for an aggregate of $65-million (Canadian)), resulting in approximately $35-million of available liquidity, better positioning the combined company to finance value-enhancing growth;
• Immediate cash flow from Aranzazu -- immediate increase in cash flow from the producing Aranzazu royalty, along with Tocantinzinho, Cote and amalgamated Kirkland royalties expected to commence cash flow in 2024;
• Superior inflation protection -- Exposure to gold, silver and copper creates an ideal blend of monetary, strategic and inflation-resilient metals to preserve purchasing power and grow value over the long term;
• Tangible pretax synergies -- annual cost savings estimated to be $2.5-million as the combined entity optimizes and integrates general and administrative expenses;
• Potential for enhanced liquidity -- potential inclusion of combined company into multiple clean metals/energy transition ETFs (exchange-traded funds), indexes and mutual funds due to increased market capitalization and the addition of high-quality copper royalties.

This combination is expected to be accretive on a net-asset-value-per-share basis and represents a continuation of each company's strategic focus. Metalla and Nova have a common focus on building a high-quality, sustainable royalty and streaming company founded on top-quality assets located in the best mining jurisdictions, owned by proven, responsible operators. Both Metalla and Nova believe that the combined company will benefit from the strong growth in cash flows from the resulting high-margin, high-growth, inflation-resilient and diversified portfolio.

Brett Heath, president and chief executive officer of Metalla, stated: "We are very excited about the combination of these businesses. This merger represents a transformative moment for both companies and will lay a clear, low-risk path to becoming an intermediate royalty company. Together, we expect that our peer-leading, high-quality growth, underpinned by some of the best-in-class operators in the mining sector, will deliver superior long-term value for our shareholders."

Mr. Heath continued: "We are very happy to have the continued support of Beedie Capital as a strategic partner in the journey to build Metalla into a leading intermediate royalty company. Their substantial investment is not just a financial commitment but a vote of confidence in our vision, strategy and execution. With their support, we are positioned to continue our growth plans with available capital of approximately $35-million, which ultimately will provide the opportunity to support and grow our asset base with a path to shared success for all stakeholders.

"I would personally like to thank the management, board and independent special committees of both Metalla and Nova on their collective efforts, dedication and commitment that was required for this transaction."

Hashim Ahmed, interim chief executive officer of Nova, stated: "We are excited to be combining with Metalla to create a truly special royalty company built on long-lived, top-quality assets. In May, 2023, we launched a robust strategic process to explore and review all the options available to Nova that would maximize shareholder value. After evaluating various options presented during the process, it was clear that this transaction represents a significant value creation opportunity and the best way forward for Nova shareholders.

"In addition to an attractive premium, a material ownership in the combined company provides Nova shareholders with increased scale, a stronger balance sheet, significantly improved cash flow profile in the short and near term, and much greater trading liquidity and continued participation in the growth of the Nova assets. We look forward to working with Metalla and our shareholders to complete this transaction and believe the combined company will be a long-term leader with a bright future."

Alexander Molyneux, chairman of Metalla's special committee, stated: "Copper really is the new oil. It has a unique long-term growth profile among main liquid metals in a decarbonizing world. However, from a royalty perspective, there's very few royalties available on large Tier 1 copper projects. These features make Nova a highly strategic combination for Metalla, and, going forward, we will be positioned with unique long-term growth prospects compared to pure play precious metals royalty peers.

"On behalf of the Metalla special committee, I'd like to thank our hard-working management team for their efforts in bringing the transaction to fruition."

David Bell, managing director at Beedie Capital, stated: "Metalla and Nova have a common philosophy of discipline and capital efficiency, executed through a similar strategy of acquiring the best-in-class royalties across the development curve that present highly favourable, asymmetrical risk/return characteristics. As these royalties have derisked and expanded, they have created significant intrinsic value per share growth for both companies over a short period of time.

"The combination of Metalla and Nova is a natural and strategic fit that we feel amplifies the opportunity beyond what either could achieve on its own. The combined entity has a highly unique portfolio of royalties in key gold and copper projects in top jurisdictions. We believe this will create organic cash flow growth for years to come while maintaining substantial option value across the broader portfolio. Additionally, the increased scale, consolidated management team and diversification of strategy will allow for broader reach and enhanced ability to execute on the next phase of accretive acquisitions that will continue to compound growth for the platform. We are excited for the next chapter for Metalla."

Benefits to Nova shareholders:

• Immediate upfront premium of 25 per cent based on spot and 32 per cent based on the closing prices of Nova on May 16, 2023, the day prior to the date that the Nova strategic review process was announced;
• Retain meaningful ownership in combined company as Nova shareholders will have approximately 40-per-cent ownership in the combined company;
• Participation in a larger cash-flow-generating portfolio with a significant increase in near-term production through exposure to Tocantinzinho, Amalgamated Kirkland and Cote, which are expected to start production in 2024;
• Improved risk profile as almost all of Metalla's key assets by NAV are located in Tier 1 countries (Canada, the United States and Australia) and are owned by major mining companies;
• Significantly improved trading liquidity with Metalla's NYSE American LLC listing and an enhanced capital markets profile with broader access to capital.

Benefits to Metalla shareholders:

• Immediately accretive on a net-asset-value-per-share basis;
• Provides exposure to a one-of-a-kind portfolio of generational copper royalties being developed by some of the largest globally integrated mining companies;
• Significant increase in the duration of the combined portfolio with the top 10 assets averaging a peer-leading mine life of 20 years;
• Increased cash flow from the operating Aranzazu royalty;
• Tangible annual pretax synergies estimated to be $2.5-million as the combined company optimizes and integrates general and administrative expenses;
• Enhanced trading liquidity and capital markets profile through increase in size and scale and access to an expanded universe of institutional investors, ETFs, indexes and mutual funds;
• Improved ability to pursue value-enhancing growth opportunities through future royalty acquisitions.

Strategic partnership with Beedie Capital

Concurrent with closing the transaction, Beedie Capital, an insider (as such term is defined in the policies of the TSX Venture Exchange) of Nova, has agreed to:

• Subscribe for $15-million (Canadian) in an equity placement of Metalla;
• Amend and increase the existing convertible loan agreement with Metalla;
• Terminate its convertible loan agreement with Nova.

Equity placement

Beedie has entered into a subscription agreement to complete a $15-million (Canadian) equity placement in Metalla, pursuant to which it has agreed, subject to certain conditions, to subscribe for 2.8 million subscription receipts, at a price of $5.29 per subscription receipt, which is the closing price of the common shares of Metalla on Sept. 7, 2023. Upon closing of the transaction, and subject to certain conditions, each subscription receipt will convert into one common share of Metalla, without payment of additional consideration or further action. After the conversion of the subscription receipts into common shares of Metalla, Beedie will beneficially hold 8.7 million common shares of Metalla, representing approximately 9.7 per cent of the issued and outstanding common shares of the combined company on a non-diluted basis and 12.7 per cent on a partially diluted basis assuming conversion of all draws under the amended Metalla convertible loan.

The proceeds of the equity investment will be used for the acquisition of royalties and streams, transaction expenses, and general and administrative expenses of the combined company following completion of the transaction. The company intends to rely on the part-and-parcel exception under the policies of the TSX-V in respect of the equity investment as the equity investment is integral to the transaction by capitalizing the combined company.

Metalla convertible loan

Metalla and Beedie have entered into a term sheet dated Sept. 7, 2023, pursuant to which Beedie and Metalla have agreed, subject to certain conditions, including the due execution of a definitive agreement, to amend the Metalla convertible loan, effective as of closing of the transaction, the key terms of which are as follows:

• Increase the loan facility from $25-million (Canadian) to $50-million (Canadian);
• Drawdown $16.4-million (Canadian) at a conversion price of $6 (Canadian) per share to refinance the $4.2-million (Canadian) principal outstanding under the Metalla convertible loan and the $12.2-million (Canadian) principal outstanding under the Nova convertible loan (other than in respect of the accrued and unpaid interest and fees);
• Drawdown an amount equal to the accrued and unpaid interest and fees outstanding under the Nova convertible loan as at the time of the closing of the transaction, with the accrued and unpaid interest having a conversion price equal to the market price of the shares of Metalla at the time of conversion, and the accrued and unpaid fees shall not be convertible into common shares of Metalla; the accrued and unpaid interest and fees were $2.4-million (Canadian) as at Sept. 1, 2023;
• For an 18-month period from the close of the transaction, accrue the 10.0-per-cent interest to the principal;
• Update existing security arrangements and financial covenants to reflect security to be provided by Nova and its subsidiaries for the Metalla convertible loan;
• Metalla will pay to Beedie an amendment fee of $125,000 (Canadian).

Each of the foregoing changes is subject to entering of mutually agreeable definitive documentation, closing of customary conditions and regulatory approvals.

Nova convertible loan

As per the term sheet and discussed herein and concurrent with closing of the transaction, Metalla will draw down on the Metalla convertible loan and pay out and discharge all obligations under the Nova convertible loan and the facility will be terminated.

Terms of the transaction

Pursuant to the transaction, Nova shareholders will receive 0.36 of a common share in the capital of Metalla per each common share in the capital of Nova held, representing consideration of $1.90 (Canadian) per Nova share, based on the closing price of Metalla shares on Sept. 7, 2023, of $5.29 (Canadian). The exchange ratio implies a premium of 25 per cent based on the closing share prices of Nova on Sept. 7, 2023, and a premium of 32 per cent based on the closing price of Nova on May 16, 2023, the day prior to the date that Nova announced it had retained PI Financial Corp. to explore options to maximize shareholder value. The purchase price implies a total equity value of $190-million (Canadian) on a fully diluted basis. The transaction will be carried out by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia).

Upon completion of the transaction, existing Metalla and Nova shareholders would own approximately 60 per cent and 40 per cent of the combined company, respectively, on a fully diluted basis. Metalla currently has 52.8 million Metalla shares issued and outstanding and, upon completion of the transaction, is expected to have approximately 86.7 million Metalla shares issued and outstanding without giving effect to the equity investment.

Shareholder approval

The transaction is subject to the approval at a special meeting of Nova shareholders, by at least 66-2/3rds per cent of the votes cast by Nova shareholders as well as by a simple majority of the votes cast by the Nova shareholders, excluding the votes cast by certain persons as required by Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions.

Other conditions to completion of the transaction and related matters

Completion of the transaction is also subject to certain approvals of the British Columbia Supreme Court, the TSX-V and the NYSE American; the receipt of all other necessary regulatory and third party approvals; and other customary conditions. No shareholder approval is required for Metalla. The arrangement agreement includes customary provisions, including non-solicitation by Nova of alternative transactions and non-solicitation by Metalla of competing transactions, a right of Metalla to match superior proposals, and a $7.5 million termination fee, payable to Metalla under certain customary circumstances.

The transaction involves non-arm's-length parties (as such term is defined in the policies of the TSX-V) as each of Mr. Heath and E.B. Tucker are directors of both Metalla and Nova. The transaction will be carried out by way of a court-approved plan of arrangement under the Business Corporation Act (British Columbia). The equity investment, and the term sheet are subject to TSX-V and NYSE American acceptance, and the subscription receipts and the Metalla shares underlying the subscription receipts will be subject to a statutory four-month-and-one-day hold period from the issuance of the subscription receipts.

Complete details of the transaction will be included in a management information circular to be delivered to Nova shareholders in the coming weeks. Subject to receiving requisite court approval, the special meeting of shareholders of Nova is expected to be held in November, 2023, and the transaction is expected to close in late 2023. In connection with and subject to closing the transaction, it is expected that the Nova shares will be delisted from the TSX-V and that Nova will cease to be a reporting issuer under Canadian securities laws.

Board of directors recommendation and fairness opinions

Board of directors recommendation

The arrangement agreement has been unanimously approved by the independent members of the boards of directors of Metalla and Nova following the unanimous recommendation of the special committees of each company that the transaction is in the best interests of their respective stakeholders.

Nova completed an auction process with the assistance of its financial adviser, PI Financial, and Metalla was the successful bidder. A total of 25 parties signed confidentiality agreements and conducted various levels of due diligence during the process, and proposals were received from eight parties. The process was overseen by a special committee of independent directors of Nova, Guy Elliott (chair) and Luke Leslie, to ensure that the Nova board's decision making was free from any conflict of interest. Nova gave the Nova special committee a mandate of evaluating the potential strategic options and acquisition opportunities and other options presented during Nova's shareholder value maximization process (see Nova's May 17, 2023, press release). Overlapping directors Mr. Heath and Mr. Tucker were recused from all deliberations of the Nova special committee pertaining to its evaluation of the transaction. The Nova special committee engaged legal counsel separately from Nova's corporate counsel and an additional financial adviser to ensure it received independent advice.

In addition, the Metalla board established a special committee of independent directors -- comprising Alexander Molyneux (chair), Mandy Johnston and Lawrence Roulston -- to oversee negotiation of the transaction and to ensure that the Metalla board's decision making was free from any conflict of interest. The Metalla special committee also engaged a financial adviser and legal counsel separately from its corporate counsel. Mr. Heath and Mr. Tucker were recused from all discussions pertaining to the transaction with respect to the Metalla special committee.

Fairness opinions

PI Financial has provided a fairness opinion to the Nova board, stating that, as of the date of such opinion, and, based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received by Nova shareholders under the transaction is fair, from a financial point of view, to Nova shareholders.

Haywood Securities Inc. has provided a fairness opinion to the Nova special committee, stating that, as of the date of such opinion, and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received by Nova shareholders under the transaction is fair, from a financial point of view, to Nova shareholders.

Lock-up agreements

As of the date of this press release, holders of a total of 16.4 million Nova shares, including Beedie, representing approximately 17.5 per cent of the issued and outstanding Nova shares, have entered into lock-up agreements committing to vote in favour of the transaction. Beedie's lock-up agreement is conditional on the completion of the transaction contemplated by the equity investment and the term sheet.

Advisers and legal counsel

Trinity Advisors is acting as financial adviser to the Metalla board and the special committee and BMO Capital Markets is acting as capital markets adviser to Metalla in connection with the transaction. Osler Hoskin & Harcourt LLP is acting as legal adviser to the Metalla special committee.

PI Financial is acting as financial adviser to the Nova board and the Nova special committee. Blake Cassels & Graydon LLP is acting as legal adviser to the Nova special committee and DLA Piper (Canada) LLP is acting as counsel to Nova and as transaction counsel generally. Haywood Securities provided the second fairness opinion to the Nova special committee.

Dorsey & Whitney LLP and DLA Piper LLP (U.S.) are acting as U.S. legal counsel to Metalla and Nova, respectively.

Conference call and webcast

Metalla and Nova will hold a joint conference call and webcast for investors and analysts on Sept. 8, 2023, at 7 a.m. PT/10 a.m. ET to discuss the transaction. Questions can be asked over the phone.

Participants may join using the numbers as follows or through a webcast.

Participant number (local):   416-764-8609

Participant number (North America toll-free):  888-390-0605

A replay of the conference call will be available until 11:59 p.m. ET, Sept. 22, 2023, and can be accessed using the following dial-in numbers.

Encore (local):  416-764-8677

Encore (North America toll-free):  888-390-0541

Encore ID:  434021 followed by the number sign

The webcast will be archived on both the Metalla and Nova websites until the transaction closes.

About Metalla Royalty and Streaming Ltd.

Metalla provides shareholders with leveraged precious metal and strategic metal exposure through its royalties and streaming portfolio. Metalla's goal is to increase share value by accumulating a diversified portfolio of royalties and streams offering attractive returns. Metalla's strong foundation of current and future cash-generating asset base and experienced team provide Metalla the path to become one of the leading royalty companies.

About Nova Royalty Corp.

Nova Royalty is a copper- and nickel-focused royalty company. Nova has assembled a portfolio of royalties on a significant proportion of the next generation of major copper projects located in first-tier jurisdictions, providing investors exposure to some of the most critical resource assets for the clean energy transition. These projects are being advanced by the world's premier mining companies, which include First Quantum, Lundin Mining, Newmont, Hudbay, Anglo American and Glencore, among others. Nova is headquartered in Vancouver, B.C., and is listed on the TSX-V under the trading symbol NOVR and on the U.S. OTCQB exchange under the trading symbol NOVRF.

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