TSX-V: ELY
VANCOUVER, Dec. 7, 2016 /CNW/ - Ely Gold & Minerals Inc. ("Ely Gold"
or the "Company") (TSX-V: ELY, OTC: ELYGF) is pleased to
announce that it has entered into a definitive option agreement
with Colorado Resources Ltd. (TSX-V: CXO) ("Colorado") through their respective wholly
owned U.S subsidiaries whereby Colorado can acquire a 100% interest in the
Green Springs Project, located in eastern Nevada. (the "Option") The total Option
amount (if completed) is US$3,000,000
and 2,250,000 Colorado common
shares. The closing of the Option is subject to TSX-V approval and
delivery of final documentation which is expected in late December
(the "Closing").
The Green Springs Project consists of 193 unpatented claims held
or under option by Ely Gold (the
"Property") It is located in the eastern Great Basin
approximately 50 miles south of Kinross 's Bald Mountain/Alligator Ridge
Mine** and 35 miles west of Ely
Nevada. It is a classic Carlin-style gold system that
represents part of a growing number of Carlin-type systems and new discoveries
located outside the main Carlin
and Cortez camps in largely underexplored parts of Nevada.
From 1988- 1990 U.S Minerals Exploration Company ("USMX") mined
1.1 million tons at an average grade of 2.1 g/t gold at a 0.7 g/t
Au cut-off from three shallow pits at Green Springs with heap leach
recoveries estimated at >80 % recovery. Mining occurred at
shallow depths (typically <30 m) from the Lower Chainman shale
formation. At least three other zones were left un-mined when in
1988 USMX elected to move their mining operations. More information
regarding the Property, historic data and Ely Gold's exploration results is available on
the Company's website at www.elygoldinc.com.
Trey Wasser, President and CEO of
Ely Gold commented on the Option,
"We are very pleased to complete this transaction with Colorado. Ely
Gold has worked very hard to consolidate the Green Springs
district for the first time since mine production in the late
1980's. The team at Colorado are
proven asset builders and we are pleased to have concluded the
Option for cash and Colorado
shares while retaining a significant royalty interest. This
transaction will also add significantly to our current cash flow
stream."
The Option
Pursuant to the terms of the Option, subject to TSX Venture
Exchange ("Exchange") approval, Ely
Gold has granted the exclusive option to Colorado to acquire the Company's 100%
interest in and to the Green Springs Project by making the
following payments and share issuances over 4 years:
- At Closing - US$50,000 cash and
the issuance of 300,000 common shares;
- Year 1 - US$100,000 cash and the
issuance of 500,000 common shares;
- Year 2 - US$200,000 cash and the
issuance of 600,000 common shares;
- Year 3 - US$400,000 cash and the
issuance of 850,000 common shares; and
- Year 4 - US$2,250,000 cash (the
"Final Option Payment"). Colorado
may at its election make the Final Option Payment 50% cash and 50%
common shares based on a 30 day VWAP.
There are no work commitments or additional expenditures
required other than Colorado's
obligation to maintain the underlying agreements and claim
maintenance fees per year of approximately US$50k. If the Final Option Payment is made
Ely Gold will retain a total 1% net
smelter returns royalty ("NSR") on two key claims.
Ely Gold will also retain the right
to buy-down 1% of the underlying royalty on these key claims for
$500,000. Ely
Gold will retain a .5% NSR on 76 claims that make up the old
USMX production and drilling.
Colorado will pay Ely Gold annual advance royalty payments as
follows:
- US$25,000 on the first through
third anniversary dates of the Final Option Payment;
- US$50,000 on each anniversary
date of the Final Option Payment thereafter.
Stephen Kenwood, P. Geo, is
director of the Company and a Qualified Person as defined by NI
43-101. Mr. Kenwood has reviewed and approved the technical
information in this press release.
About Ely Gold
Ely Gold is focused on developing
recurring cash flow streams through the acquisition, consolidation,
enhancement, and resale of highly prospective, un-encumbered North
American precious metals properties. Ely's property development
efforts maximize each property's potential for acquisition, while
reserving significant royalty interests. Additional
information about Ely Gold is
available at the Company's website, at www.elygoldinc.com
On Behalf of the Board of Directors
Signed "Trey Wasser"
Trey
Wasser, President & CEO
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. This news release may contain
forward-looking statements including but not limited to comments
regarding the timing and content of upcoming work programs,
geological interpretations, receipt of property titles, potential
mineral recovery processes, etc. Forward-looking statements address
future events and conditions and therefore, involve inherent risks
and uncertainties. Actual results may differ materially from those
currently anticipated in such statements.
SOURCE Ely Gold & Minerals
Inc.