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McEwen Mining Inc
Symbol MUX
Shares Issued 400,208,425
Close 2019-11-27 C$ 1.52
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Ely Gold to sell Gold Bar to McEwen Mining

2019-11-27 06:58 ET - News Release

See News Release (C-ELY) Ely Gold Royalties Inc

Mr. Trey Wasser of Ely reports


Ely Gold Royalties Inc. and its wholly owned subsidiary, Nevada Select Royalty Inc., have signed a definitive purchase agreement for the sale of 100 per cent of the Gold Bar project to McEwen Mining Nevada Inc., a wholly owned subsidiary of McEwen Mining Inc. The agreement is subject to approval of the New York Stock Exchange and the Toronto Stock Exchange.

The Old Gold Bar project

The Old Gold Bar project consists of 12 patented mining claims and 310 unpatented mining claims located in Elko county, Nevada. The patented and unpatented claims include the historic Gold Bar mine and mill, which produced 286,354 ounces of gold from 1986 to 1994 from the historic open-pit mine and the Millsite deposit (internal report, Atlas Precious Metals, Mines, Dec. 13, 1995, prepared by Pincock, Allen & Holt). The Millsite deposit is possibly a faulted offset of the historic Gold Bar mine and is located to the northwest of the open pit. Fremont Gold Ltd. optioned the property from Ely Gold, in 2017, and completed a soil sampling program based on a new structural interpretation and identified coincident gold and mercury geochemical anomalies to the southeast of the historic Gold Bar mine. Fremont drilled two reverse circulation drill holes at Gold Bar, totalling 492 metres. Results include: 25.9 metres at 4.66 grams per tonne gold within a longer interval of 41.2 m at 3.08 g/t in hole GBR-1 at the historic Millsite deposit and 6.1 m at 1.22 g/t Au in hole GBR-2 immediately west of the historic open pit (see Fremont press release dated June 27, 2018). Fremont terminated its Gold Bar option on July 9, 2019.

The agreement

Under the terms of the agreement, McEwen will issue to Ely Gold 53,600 shares of its common stock in exchange for 100-per-cent ownership in the patented and unpatented claims. In addition, McEwen will reimburse Nevada Select $38,096.57 (U.S.) for the 2020 claim fees and taxes. Nevada Select will retain a 2-per-cent net smelter return royalty on the patented and unpatented claims. McEwen can purchase 1 per cent of the royalty on the patented claims for $1-million (U.S.) and 1 per cent of the royalty on the unpatented claims for $2-million (U.S.).

Trey Wasser, president and chief executive officer, commented: "This transaction will be our second transaction with McEwen and fully supports our business model of generating royalty interests at or near producing mines. After closing the transaction with McEwen and Fremont on our Gold Canyon option and purchasing the Scoonover royalty, from a third party, we will have three property or royalty interests at McEwen's Gold Bar complex in Nevada."

About Ely Gold Royalties Inc.

Ely Gold Royalties is a Vancouver-based, emerging royalty company with development assets focused on Nevada and Quebec. Its current portfolio includes 34 deeded royalties and 20 properties optioned to third parties. Ely Gold's royalty portfolio includes producing royalties, fully permitted mines, and development projects that are at or near producing mines. The company is actively seeking opportunities to purchase existing third party royalties for its portfolio, and all the company's option properties are expected to produce royalties, if exercised.

Stephen Kenwood, PGeo, is a director of the company and a qualified person as defined by National Instrument 43-101. Mr. Kenwood has reviewed and approved the technical information in this press release.

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