Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB) agreed to acquire privately held VEK Associates that owns a portfolio of Nevada properties, it announced in a news release. The deal is expected to close by May 1, 2020.
"This royalty package has the potential to be of equal or more value to our rapidly growing royalty portfolio and to increase long-term shareholder value," President and CEO Trey Wasser said in the release.
The VEK package consists of five properties, associated leases and a database. All of the leases pay advance minimum royalty payments and carry a 3% net smelter returns royalty without buydowns.
Total consideration for VEK is to include US$5 million and 2,005,164 Ely Gold share purchase warrants, each exercisable for two years to purchase one Ely Gold common share at CA$0.62. VEK has 13,734 outstanding shares.
Four of VEK's royalty properties are leased to Nevada Gold Mines, the joint venture between Barrick Gold and Newmont Goldcorp. They are:
1) REN: 86 contiguous unpatented lode mining claims covering 7.4 square kilometers (7.4 sq km) of the Northern Carlin trend.
2) Carlin Trend: 84 unpatented lode mining claims covering 7 sq km along the Carlin trend
3) Lone Tree: 38 unpatented lode mining claims covering 3.2 sq km along the Battle Mountain-Eureka trend
4) Pinson: 53 unpatented lode mining claims covering 4.4 sq km along the Osgood Mountain trend.
The fifth property, leased to SSR Mining, is Marigold, composed of 205 unpatented lode mining claims covering 7.8 sq km of SSR's operation on the Battle Mountain-Eureka trend.
As for VEK's database, combining it with Ely Gold's existing data and knowledge "will create an incredible asset for property identification and development," Jerry Baughman, president of Ely Gold subsidiary Nevada Select, said in the release.
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