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.
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