Metalla Royalty & Streaming Ltd (OTCMKTS:MTAFF) A Perfect Small-Cap Dividend Play

Metalla Royalty & Streaming Ltd (OTCMKTS:MTAFF) has caught our attention, after reaffirming its growth prospects and ability to generate free cash flow. The company's outlook has since received a major boost, depicted by a resurgence in share price, on the announcement of a 50% dividend increase.Metalla Royalty Price ActionAfter initially coming under pressure, the stock is showing signs of nudging higher, in line with the underlying long-term trend. The recent spike does not come as a surprise given that the company has been consistently performing irrespective of the ups and down in the market.The fact that the company’s operations are financially sustainable is one of the reasons why investors remain bullish about the stock's performance. A closer look at the chart below, it is clear the stock is trading at a key resistance level. MTAFF Daily ChartA close above the $0.65 handle should see the stock surge even higher on a continuation of the uptrend. After initially gapping higher any sell-offs should be limited to the $0.58 handle, seen as a key support level.What Does Metalla Royalty Do?Metalla Royalty casts itself as a precious metal royalty and streaming company. The company engages in the acquisition and management of precious metal royalties, streams and related production-based interests in Canada. It focuses on precious metals such as gold and silver.The company’s streaming business entails making an initial payment to mining companies for the right to purchase a given asset. In return, it makes an additional fixed payment per ounce of gold/silver delivered.Why is Metalla Royalty Surging Higher?The stock is surging higher on investors taking note of the company's bid to increase its dividend payments by 50%. The stock has caught the attention of income-focused investors given the amount of value up for grabs.The board of directors has since approved a monthly cash dividend of C$0.001 per share for April and May, set to increase to C$0.0015 in June. In addition, the Mining Royalties specialist plans to expand its dividend offering over the course of the year, while targeting payout ratio of up to 50% of the operating cash flow after taxes.

“For the third quarter of fiscal 2018, our revenue and cash flow continue to support our growing dividend program. The increased dividend beginning in June will yield 2.7% on an annual basis based on our current share price of C$0.68. This makes Metalla one of the highest yielding precious metal royalty and streaming stocks," said Brett Heath, Metalla's president and chief executive.

In addition, the Chief Executive has confirmed plans to grow free cash flow to support dividend offerings through accretive transactions.Solid Financial PositionIt is becoming clear that the company will be able to support its dividend offerings, thanks to a reduction in debt from C$133, 0000 to C$15,000, made up of long-term and current debt. The company's current cash and short-term investment stands at about C$1.22 million sufficient for investing in the business.Metalla Royalty also has a safe level of assets for meeting short-term obligation with a current ratio of 5.6X. What this means is that the company can meet the demand for debt payments by paying all liabilities from current short-term assets.Financial ResultsEverything should be clear about the company’s financial position and long-term plans, on the announcement of Q3 financial results in April. In addition, the company says it sold and invoiced 96,542 ounces of Silver in the quarter and held 35, 473 ounces of silver attributable inventory to be realized in the subsequent quarter.Metalla Strengthens BoardIn a bid to the strengthen the level of expertise needed to spearhead the next phase of growth, Metalla Royalty has nominated Alexander Molyneux and Frank L. Hanagarne to its board of director. The company has also appointed Drew Clark as the Vice President of Corporate Development

"We are privileged to have Mr. Molyneux, Mr. Hanagarne, and Mr. Clark join the Metalla team. Mr. Hanagarne possesses a strong technical background and operational experience from world-class mining companies. Mr. Molyneux brings an extensive investment network, together with capital markets and transactional experience. Mr. Clark brings a broad network and experience directly tied to royalty and streaming transactions,” said Mr. Heath

The appointment follows the resignation of Charles Beaudry from the board. However, he will remain as a technical advisor on a consultant basis.What Next Metalla RoyaltyMetalla Royalty is in a solid financial position, depicted by impressive free cash flow, perfect for pursuing various growth opportunities. The company has already shown its ability and willingness to return value to shareholders, something that should continue to strengthen its outlook on Wall Street. The stock look set to continue rising after bouncing back, following a minor correction.Disclosure: We have no position in MTAFF and have not been compensated for this article.