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TICKERS: ELY; ELYGF

Production Royalty Transaction Closes for Vancouver-Based Company
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Source:

This asset is another significant addition to the firm's expanding portfolio.

Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB) announced in a news release the closing of its acquisition of all rights and interests in a per ton royalty interest on the processing facilities at Jerritt Canyon in Elko, Nevada.

Per the agreement, Ely Gold is entitled to a royalty based on mill production on a per ton basis, which increases with higher gold prices. For gold prices less than or equal to $1,300 per ounce ($1,300/oz), the royalty is $0.15 per ton. For gold prices from $1,301$1,600/oz, it is $0.225/ton. For gold prices from $1,601$2,000/oz, it is $0.30/ton. For gold prices above $2,000/oz, it is $0.40/ton.

For example, based on current production, the July royalty payment was $16,516. At $2,000/oz gold, it could be as much as $48,000 per month. Jerritt Canyon is designed to process up to 4,000 tons of gold ore per day.

Trey Wasser, Ely Gold's President and CEO commented, "The acquisition of this producing royalty at Jerritt Canyon is another significant asset for our portfolio. The pricing structure of this Per Ton Royalty offers excellent leverage to gold prices, similar to a traditional mineral royalty."

Per the agreement, Ely Gold will make the following deferred payments: US$150,000 cash on both the first and second anniversaries of the closing and US$50,000 cash on the third anniversary. It has already paid US$300,000 cash and 500,000 warrants. Each warrant is for one common share at the price of CA$0.18 and is good for three years.

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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.
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