In a news release, Nevada focused gold royalty company Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQX; I4U:FSE) announced that it has "reached binding agreements with twelve separate individuals to purchase private mineral interests on over 8,000 acres of private fee ground in Elko County, Nevada." The firm advised that 100% of the fee ground and mineral interests encompass portions of the Railroad-Pinion heap-leach mining project that is being developed and are leased to Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE).
Ely Gold pointed out that the various mineral interests and leases cover large portions of the South Railroad Complex's Dark Star, Pinion and Jasperoid Wash deposits and North Railroad's POD and Bald Mountain zones.
The company listed that in aggregate the leases provide for a 1.15% net smelter returns royalty and annual lease payments in excess of $150,000.
Ely Gold Royalties explained that under the terms of the eleven ORTT agreements, it has agreed to pay a total of US$2,509,543 cash upon closing of the transaction. The company added that the terms for the single OR transaction call for Ely Gold to pay US$1,300,000 in cash at closing and the issuance of 300,000 common stock warrants. The firm stated that the warrants will have an exercise price of CA$1.15 and will be valid for five years.
Ely Gold noted that both transactions are still subject to final due diligence by the company though they anticipate that the ORTT transactions will close on December 1, 2020. The firm said that the OR transaction will require approval from the Toronto Venture Exchange.
The company's President and CEO Trey Wasser remarked, "Ely Gold has successfully consolidated another complex transaction resulting in a meaningful royalty position on one of Nevada's next mine developments. Not only do these Leases cover approximately 35% of the total resources at South Railroad, they also cover most of GSV's 2020 expansion drilling at Dark Star, Pinion and Jasperoid Wash."
The firm stated that the Railroad-Pinion Project is an intermediate to advanced stage gold project located at the southeast end of the Carlin Trend in north-central Nevada and commented that historically the Carlin Trend has been the source of more than 80 Moz of gold.
The firm advised that in February 2020 Gold Standard Ventures published results from a Pre-Feasibility Study (PFS) for the South Railroad portion of the Railroad-Pinion project. The company discussed some of the highlights from that report, which included the Dark Star and Pinion Deposits.
The PFS estimated the pre-tax net present value (NPV) of the deposits to be US$331.4 million and US$265.0 million after tax. The values were calculated using $1,400/oz gold price and a $17.11/oz silver price employing a 5% discount rate.
The PFS estimated proven and probable mineral reserves of 1.246 Moz Au and 2.705 Moz Ag. The study forecast yearly production of 156 Koz and projected a mine life of eight years. The project estimates entail initial capital expenditures of $132.9 million with average annual cash costs of $582/oz and all in sustaining costs (AISC) of $707/oz.
The report further explained that Gold Standard Ventures announced in July of this year that it entered into a series of transactions with Orion Mine Finance totaling US$22.5 million with the opportunity to increase that amount up to US$200 million in order to help finance the South Railroad Project' construction.
Ely Gold added that Gold Standard also recently obtained encouraging results from 24 of 75 holes from its 2020 Pinion deposit drill program. Ely Gold noted the all of these 75 holes drilled are included in the mineral interests it is acquiring.
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