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Be the first with the news that moves the market- Ely Gold Royalties Inc. (TSXV:ELY) is purchasing a Nevada-based property holder, Vek Associates, for C$6.7 million
- Ely Gold will purchase all outstanding shares and Vek associates will become a wholly-owned subsidiary
- Vek Assosiates currently owns the royalties to five Nevada gold properties
- All the properties are leased and the royalties generated $1.14 million in 2019
- Ely Gold Royalties Inc (ELY) was up 6.45 per cent, with shares trading for $0.66
Ely Gold Royalties Inc. (TSXV:ELY) is purchasing a Nevada-based property holder, Vek Associates, for a cash consideration of C$6.7 million.
According to the agreement, Ely Gold will purchase all of the Vek’s outstanding shares. As a result Vek Associates will become a wholly-own subsidiary of Ely Gold.
The buy-out is motivated by a string of Vek-owned Nevada properties, which Ely Gold will assume effective control over.
Vek has leased four of the properties to a a joint venture between Barrick Gold and Newmont GoldCorp, two of the largest gold mining companies in the world.
The fifth property is leased to SSR Mining Inc, who performed exploration drilling on the property in 2017.
SSR reported intersections of 1.67 grams per tonne gold across 164.6 metres and 2.48 grams per tonne of gold across 91.4 metres.
However, these results have not yet been verified by a qualified person.
Vek currently owns a 50 per cent stake in all the properties. The other 50 per cent is owned by the heirs of William Andrus, one of the founders of the company.
In 2019, Vek Associates received $1,145,135 in royalty payments from their five properties.
Trey Wasser, President and CEO of Ely Gold, is pleased with the acquisition.
“While our Fenelon Royalty continues to expand and excite the market, this royalty package has the potential to be of equal or more value to our rapidly growing royalty portfolio and to increase long-term shareholder value,” he said.
Wallbridge Mining Company is currently exploring Ely Gold’s Fenelon Property and expects to be granted mining permit this year. Ely Gold holds a two per cent smelter royalty on the property.
Ely Gold expects to complete the acquisition of Vek Associates by May 1.
However, this remains subject to undisclosed closing requirements and TSXV approval.
Ely Gold Royalties Inc (ELY) was up 6.45 per cent, with shares trading for $0.66 at 2pm EST.
