In a news release, Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB) reported that it has closed the purchase agreement and lease assignments that the company previously announced in February 2020 through its wholly owned subsidiary, Nevada Select Royalty Inc.
The firm indicated that the agreements were completed with a private individual seller whereby Nevada Select purchased eight unpatented mining claims in Eureka County, Nevada. The company advised that the claims are leased to a subsidiary of McEwen Mining Inc. (MUX:TSX; MUX:NYSE) and noted that the agreements included provisions for assignment of the respective leases to Nevada Select.
The company highlighted that under the terms of the agreement, Ely Gold purchased two HNT Claims and six JAM Claims and assumed the corresponding leases. In addition, the firm reported that upon closing it paid the seller $125,000 and issued the seller 100,000 warrants for Ely Gold common shares. The warrants will expire two years from the transaction closing date and allow the seller to purchase up to 100,000 shares of Ely Gold common stock at a price of CA$0.77 per share. The company added that the annual lease payment covering the HNT Claims is $5,000 and another $7,000 annually for the JAM Claims and that each of the lease agreements provide for a 2.0% net smelter returns royalty at current gold prices.
"We believe that both the HNT and JAM Claims represent potential resource expansion potential for McEwen Mining's production at their Gold Bar Mine. This transaction now provides Ely Gold with a total of six properties and royalties at or near the Gold Bar Mine," stated the company's President and CEO Trey Wasser.
Ely Gold is headquartered in Vancouver, B.C., and is a junior royalty company with development assets centered in Nevada and Quebec. The company reported that at present its portfolio includes 43 royalties and 19 properties being sold to third parties. The firm noted that "its royalty portfolio includes producing royalties, fully permitted mines and development projects that are at or near producing mines." The company further reported that all of its portfolio properties are sold or optioned on a 100% basis, while the company retains royalty interests.
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