Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB) announced in a news release that through its subsidiary Nevada Select Royalty Inc., it formally gave Goldcliff Resource Corp. (GCN:TSX.V) the option to buy its Rand property in Nevada for $250,000. The deal closed on June 12, 2019, and Goldcliff exercised its option.
The Rand asset, comprised of nine unpatented mining claims, is a low to intermediate sulphidation epithermal system. Though Rand had been mined intermittently in the past, on a small scale, a drill program has not ever been carried out there.
"We are pleased to add another high-quality property and partner to our option portfolio, and we are excited for the potential for this project to be drill tested for the first time," Ely Gold President and CEO Trey Wasser said in the release.
Per the agreement, Goldcliff paid Nevada Select $10,000 at the closing. It will pay $15,000 in six months and $25,000 on each of the first, second and third anniversaries of the closing. On the fourth anniversary, the acquirer will pay the final amount, $150,000, and Nevada Select will convey the property to Goldcliff.
Nevada Select will retain a 2.5% net smelter return (NSR) royalty on any future precious metals produced there.
With respect to the royalty, Goldcliff will make advance payments of $10,000 on the first, second and third anniversaries along with $20,000 on subsequent anniversaries. The company has the option to buy back 1% of the NSR for $1 million.
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