Goldcliff Resource Corp. (GCN:TSX.V; GCFFF:OTCBB) reported in a news release that it has entered into an option agreement with Nevada Select Royalty Inc., a wholly owned subsidiary of Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQX; I4U:FSE), to purchase a 100% interest in the Aurora West property located in Mineral County, Nevada.
Goldcliff Resource's President George Sanders made the announcement and stated that the agreement terms call for a US$425,000 purchase price payable over four years.
The company noted that the Aurora West property is composed of 51 claims that are contiguous with the northwest portion of Hecla Mining Co.'s main Aurora district claims. The firm indicated that Hecla's assets include a fully permitted 350 tpd processing facility. Goldcliff pointed out that the Aurora district has produced around 1.9 million ounces of gold to date.
Goldcliff stated that the Sawtooth Ridge target is located within the Aurora West claims and is located immediately northwest of the northernmost bonanza vein deposits in the Aurora district. The target region "may represent the intact portion of the epithermal system, with uneroded and unmined bonanza veins at depth below the high-level alteration."
The company reported that the option agreement provides it with the rights to buy 100% of the Aurora West property for a total purchase price of US$425,000. The firm advised that at present Nevada Select is optioning the property from a separate private company.
Goldcliff stated that option agreement does not include any specific capex or work commitments.
The agreement requires Goldcliff Resources to pay Nevada Select US$25,000 at closing, which it indicated it has already paid along, with reimbursement for year 2020 claim fees in the amount of US$9,039, which has also been paid.
Goldcliff will be responsible to pay the private company US$50,000 on September 13, 2021, and an additional US$135,000 on September 13, 2022. After the second payment in September 2022, Nevada Select will take possession of the Aurora West property.
The company will be required to make a final payment to Nevada Select in the amount of US$200,000 on the fourth anniversary of closing.
According to the news release, the private company will retain a 1% Net Smelter Return (NSR) Royalty and Nevada Select will retain a 2% NSR royalty. The private company's royalty may be bought down by 0.5% at any time by Goldcliff in exchange for a payment of US$1 million. Should the company choose to make the payment then the NSR royalty burden would be reduced from 3.0% to 2.5%.
The company noted that 30 years ago Consolidated Nevada Goldfields Corp. completed a very limited amount of shallow drilling on the Aurora West claims and at that time, a drill hole in the Sawtooth area intersected 10 meters of 3 g/t gold at shallow depths. This led to a follow up drill program that was permitted in 2005, but did not go forward. Goldcliff advised that as part of its first drill program, it intends to verify this mineralization by drilling a twin hole and immediately initiate the drill permitting process with the U.S. Forest Service.
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