The TSX Venture Exchange has accepted for filing documentation pertaining to a property option agreement effective Aug. 29, 2023, between Reyna Silver Corp. and Reyna Gold Corp. (collectively with the company, Reyna), and an arm's-length optionor, whereby the optionor has agreed to grant to the company and Reyna Gold jointly the exclusive option to acquire up to a 70-per-cent interest in the 1,286 unpatented claims and eight patented claims, located Eureka county and Elko county in Nevada.

To fully exercise the option, Reyna will pay an aggregate of $1.1-million (U.S.) in cash, issue up to 2.4 million common shares (1.2 million from each of the company and Reyna Gold) to the optionor and incur an aggregate of $9.5-million (U.S.) in exploration expenditures. These option payments will be distributed over several stages by April 30, 2027, detailed as follows:

• Make staged cash payments to the optionor totalling $1.1-million (U.S.):
  • $100,000 (U.S.) upon entering the agreement;
  • $100,000 (U.S.) by April 30, 2024;
  • $100,000 (U.S.) by Oct. 31, 2024;
  • $150,000 (U.S.) by April 30, 2025;
  • $150,000 (U.S.) by Oct. 31, 2025;
  • $250,000 (U.S.) by April 30, 2026;
  • $250,000 (U.S.) by Oct. 31, 2026;
• Issue the optionor a total of 2.4 million common shares from both the company and Reyna Gold, distributed over time:
  • 125,000 shares from the company and 125,000 shares from Reyna Gold within five business days following the exchange acceptance;
  • 125,000 shares from the company and 125,000 shares from Reyna Gold by April 30, 2025;
  • 200,000 shares from the company and 200,000 shares from Reyna Gold by April 30, 2026;
  • 750,000 shares from the company and 750,000 shares from Reyna Gold by April 30, 2027;
• Incur a total of $9.5-million (U.S.) in the expenditures:
  • Approximately $215,000 (U.S.) in August, 2023, Bureau of Land Management fees in respect of the property upon entering the agreement;
  • $500,000 (U.S.) (inclusive of the August, 2023, Bureau of the Land Management fees payable per above) by April 30, 2024;
  • $2-million (U.S.) by April 30, 2025;
  • $3-million (U.S.) by April 30, 2026;
  • $4-million (U.S.) by April 30, 2027.

The amounts above payable on or prior to April 30, 2025, comprising aggregate expenditures of $2.5-million (U.S.), aggregate cash payments of $300,000 (U.S.), and 250,000 common shares of the company and 250,000 common shares of Reyna Gold, are the obligations of Reyna and must be paid by Reyna regardless of whether the option is subsequently permitted by Reyna to lapse. The company and Reyna Gold are liable for the cash payment and the expenditures, with each company bearing 50 per cent of the responsibility. If Reyna exercises the option in its entirety, a new joint venture with the optionor will be established, with the terms set to be negotiated by April 30, 2025. The joint venture agreement will be subject to prior exchange approval when it has been finalized.

The optionor is granted a 2-per-cent net smelter return (NSR) royalty on the property, with an option for Reyna to reduce this to 1 per cent by paying for a 50-per-cent buydown. However, for the part of the property that includes the eight patented mining claims, the NSR royalty is fixed at 1 per cent and cannot be further reduced. The specifics of the NSR agreement are to be finalized by or before April 30, 2025, which may require prior exchange approval in accordance with applicable exchange policies.

The transaction is arm's length in nature and no finder's fee is payable.

For further details, please refer to the company's news release dated Sept. 5, 2023.