The agreement is subject to the approval from the New York Stock Exchange and the Toronto Stock Exchange
Image: Ely Gold Royalties sells Old Gold Bar Project to Mcewen Mining, Retains Royalty. Photo: courtesy of PublicDomainPictures from Pixabay.
Ely Gold Royalties Inc. (“Ely Gold”) or the (“Company”) (TSX-V: ELY, OTCQB: ELYGF) and its wholly owned subsidiary, Nevada Select Royalty, Inc (“Nevada Select”) are pleased to announce that they have signed a definitive purchase agreement (the “Agreement”) for the sale of 100% of its Gold Bar Project (“Old Gold Bar Project”) to McEwen Mining Nevada Inc, a wholly owned subsidiary of McEwen Mining Inc (NYSE:MUX, TSX:MUX) (collectively “McEwen”). The Agreement is subject to approval of the New York Stock Exchange and the Toronto Stock Exchange.
The Old Gold Bar Project
The Old Gold Bar project consists of twelve (12) patented mining claims (the “Patented Claims”) and three hundred ten (310) unpatented mining claims (the “Unpatented Claims”) located in Elko County, Nevada. The Patented and Unpatented claims include the historic Gold Bar mine and mill, which produced 286,354 ounces of gold from 1986 to 1994 from the historic open pit mine and the Millsite deposit (Internal report, Atlas Precious Metals, Mines, December 13, 1995, prepared by Pincock, Allen & Holt). The Millsite deposit is possibly a faulted offset of the historic Gold Bar mine and is located to the northwest of the open pit. Fremont Gold Ltd (TSX-V: FRE) (“Fremont”) optioned the property from Ely Gold, in 2017, and completed a soil sampling program based on a new structural interpretation and identified coincident gold and mercury geochemical anomalies to the southeast of the historic Gold Bar mine. Fremont drilled two reverse-circulation drill holes at Gold Bar, totaling 492 metres (“m”). Results include: 25.9m @ 4.66 g/t Au within a longer interval of 41.2m @ 3.08 g/t in hole GBR-1 at the historic Millsite deposit and 6.1m @ 1.22 g/t Au in hole GBR-2 immediately west of the historic open pit (see Fremont press release dated June 27, 2018. Fremont terminated its Gold Bar option on July 9, 2019.
The Agreement
Under the terms of the Agreement, McEwen will issue to Ely Gold 53,600 shares of its common stock in exchange for 100% ownership in the Patented and Unpatented Claims. In addition, McEwen will reimburse Nevada Select US$38,096.57 for the 2020 claim fees and taxes. Nevada Select will retain a two percent (2%) net smelter return royalty on the Patented and Unpatented Claims. McEwen can purchase one percent (1%) of the royalty on the Patented Claims for US$1,000,000 and one percent (1%) of the royalty on the Unpatented Claims for US$2,000,000.
Trey Wasser, President and CEO commented, “This transaction will be our second transaction with McEwen and fully supports our business model of generating royalty interests at or near producing mines. After closing the transaction with McEwen and Fremont on our Gold Canyon Option and purchasing the Scoonover Royalty, from a third party, we will have three property or royalty interests at McEwen’s Gold Bar Complex in Nevada.”
Source: Company Press Release