- Following a September 29 agreement, Sanatana Resources (STA) has closed the sale of its 1 per cent Watershed Royalty to Ely Gold Royalties
- Ely Gold acquired the royalty for C$2.5 million in cash and 1 million warrants, exercisable at a price of $1.31 for a period of five years
- Sanatana was originally granted the royalty as part of an asset purchase agreement with IAMGOLD
- The company has also transferred its rights and interest in the purchase agreement to Ely Gold for $10,000 in cash
- Sanatana Resources is currently steady at a price of $0.20 per share
Following a September 29 agreement, Sanatana Resources (STA) has closed the sale of its 1 per cent Watershed Royalty to Ely Gold Royalties.
The one per cent royalty was granted to Sanatana in January 2016 as part of an asset purchase agreement with Trelawney Augen Acquisition Corp. – now IAMGOLD Corporation – whereby IAMGOLD acquired a 100 per cent interest in 46 mining claims in the Chester and Yeo Counties, Ontario.
Surrounding the Coté Gold Project, which is held under a joint venture between IAMGOLD and Sumitomo Metal Mining Company, the Watershed property covers 7,900 hectares and hosts an NI 43-101-compliant mineral resource.
As consideration for the sale, Sanatana received C$2.5 million in cash and 1 million share purchase warrants in Ely Gold. These warrants will be exercisable at a price of $1.31 per share for a period of five-years.
However, should Ely Gold’s 10-day volume weighted average share price exceed $1.97, the expiry date of the warrants may be brought forward.
In connection with the sale of the royalty, Sanatana has transferred its rights and interest in the asset purchase agreement to Ely Gold for $10,000 in cash.
Ely Gold has also acquired just over 1.6 million Sanatana common shares at a price of $0.30 for a total of $500,000 through a non-brokered private placement.
“The $3,000,000 in cash from the transactions will allow Sanatana to accelerate the exploration of our core property assets as well as to consider additional property acquisitions,” said Peter Miles, CEO of Sanatana Resources.
“The 1,000,000 5-year warrants exercisable at a $1.31 will allow Sanatana shareholders to participate in Ely Gold, an aggressive and rapidly growing royalty company,” he added.
Sanatana Resources is currently steady at a price of $0.20 per share, as of 11:57am EST.