Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB) announced in a news release it agreed to sell, through its subsidiary Nevada Select Royalty, its Butte Valley project to Quaterra Mining's subsidiary, Six Mile Mining Co., for $250,000 in cash.
Attached to the Butte Valley asset, located in Nevada's White Pine County, are 78 unpatented mining claims. Previous exploration at Butte Valley consists of seven widely spaced holes being drilled, most recently in 1980. "Multiple property targets exist, which are prospective for both high-grade skarn and chalcocite-enriched porphyry copper-gold mineralization," the release noted.
For Butte Valley, Quaterra will pay the purchase price in five tranches. On the effective date, the company will pay $15,000 along with $24,711 for the 2020 claim fees, taxes and staking costs Nevada Select already paid. Next, Quaterra will pay $35,000 on the first anniversary of the effective date. On each of the second, third and fourth anniversaries of the effective date, the company will pay $50,000.
In addition, Nevada Select will retain a 2% net smelter return royalty on the claims. Quaterra may purchase 1% of the royalty for $10 million any time within 10 years of the effective date.
"This transaction supports our business model of staking key claims in order to consolidate under-explored districts in Nevada while generating royalty interests. Quaterra's expertise in copper porphyry exploration and their current land position make them an ideal partner for our Butte Valley project," Ely Gold President and CEO Trey Wasser said in the release.
Related to this transaction, Quaterra also signed a lease agreement with a Nevada-based prospecting firm, which affords Quaterra the option of purchasing 600 additional unpatented claims, with which it could consolidate the Butte Valley District.
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