Royalty Firm to Sell Past-Producing Nevada Mine, Retain NSR

Also, the company closed two deals with Eric Sprott, a royalty sale and a private placement.

Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB) announced in a news release it agreed to sell Contact Gold Corp. (C:TSX.V) all of the past-producing Green Springs gold project in Nevada.

Green Springs consists of 218 unpatented mining claims owned by Ely Gold, two leased unpatented mining claims and a heap-leach gold mine. During the late 1980s, the mine produced 72,000 ounces of gold, at an average grade of 2.32 grams per ton, from a series of pits less than 100 meters deep.

For the White Pine County asset, Contact Gold will pay, upon closing of the transaction, US$25,000, 2,000,000 of its common shares and costs of prepaid claims fees related to the mining project. Subsequently, in tranches on the first through fourth anniversaries of the closing, Contact will pay up to US$250,000. Also upon closing, Ely Gold will retain a 1% net smelter royalty on 76 core claims and a 0.75% royalty on the two leased claims at Green Springs.

In a separate, earlier news release, Ely Gold reported it closed the royalty sale and private placement involving a company controlled by Eric Sprott, 2176423 Ontario Ltd.

Through one transaction, Sprott acquired all of the rights to and interests in a 1% net smelter return royalty on the Fenelon mine property in Quebec for CA$1,673,360 in cash. Now, Ely Gold's own royalty on the Fenelon property is 2%.

In a separate deal, Sprott subscribed to a private placement of 5,615,454 Ely Gold units at CA$0.18 per unit for gross proceeds of CA$1,010,782. Each unit includes one common share and one-half of a nontransferable common share purchase warrant. With each whole warrant, the holder may purchase one additional common share for a period of three years at CA$0.30.

Read what other experts are saying about:

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Ely Gold Royalties. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.