Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQX; I4U:FSE) announced in a news release that through its subsidiary Nevada Select Royalty Inc. it agreed to acquire from Platoro West another 25% interest in the Hog Ranch property in Nevada.
This transaction will boost Ely's net smelter returns royalty on Hog Ranch to 2.25% from 1.5% and increase its interest in the 247 mining claims there, currently leased to Rex Minerals, to 75.1%. Prior to this deal, Ely owned 50.01% of Hog Ranch, which it had purchased from Platoro West in 2017.
Hog Ranch, with 247 unpatented mining claims comprising 42 square miles, is leased to Rex Minerals Ltd. The lease provides for a US$50,000 annual payment and a 3% net smelter returns royalty. Ely Gold noted that "since acquiring the Lease, Rex released an updated JORC compliant inferred resource of 97.6 Mt at 0.45 g/t gold containing a total of 1.4MM ounces of gold (See Rex press release dated May 12, 2020) and announced an expansion of the claim block based on encouraging surface sampling and mapping (See Rex press release dated July 1, 2020)."
"The additional Hog Ranch property and royalty interest will be accretive to our current net asset value," Ely Gold President and CEO Troy Wasser said in the release. "This purchase represents an important part of our royalty strategy as we continue to add to existing Key Assets in the portfolio."
For the additional interest and royalty in Hog Ranch, Ely Gold will pay Platoro West US$275,000 at the deal close and issue it 1 million warrants, each exercisable at CA$0.90 for four years. One warrant will allow the holder to buy one Ely Gold common stock share.
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