Element79 closes acquisition of Maverick, Battle Mountain projects, Nevada
Element79 Gold Corp. [ELEM-CSE] closed on an asset purchase agreement acquiring the flagship Maverick Springs project and 15 additional projects that comprise the Battle Mountain portfolio in the gold mining regions of northeastern Nevada.
The Maverick Springs project hosts a historic gold equivalent resource of 1.7 million ounces (indicated) and 1.9 million ounces (inferred), with cut-off grade of 34.3 g/t silver equivalent, calculated using circa 2004 values of US$327/oz of gold and US$4.77/oz of silver. Maverick Springs comprises ~4,800 acres across 247 unpatented claims that straddle the border of Elko county and White Pine county, proximate to the Carlin trend.
Maverick Springs is accessible year-round via gravel road, with a network of drill roads spread throughout its claims with electrical power nearby.
The Battle Mountain portfolio comprises 15 separate projects that total over 44,478 acres across 2,203 unpatented claims in five counties: Elko county, Eureka county, Humboldt county, Lander county and Nye county. See company press release for a complete list of properties.
The Battle Mountain portfolio comprises primarily of early-stage projects. While drilling has been completed at some projects, such as Elder Creek (155 holes) and Clover (104 holes), many have only surface sampling and geophysical surveys completed. Notable drill intersects include 25.3 g/t gold over 9.75 metres at Clover and, according to documentation provided by Waterton Global Resource Management Inc., 3.19 g/t gold over 38.96 metres at Elder Creek, and 8.02 g/t gold and 174 g/t silver over 9.14 metres at Long Peak. 1316524 B.C. Ltd. (Goldco), a wholly owned subsidiary of Element79 Gold, had previously entered into the asset purchase agreement with Clover Nevada LLC (Clover), a wholly owned subsidiary of Waterton Precious Metals Fund II Cayman LP, and Maverick Springs Mining Company LLC, a wholly owned subsidiary of Clover, to acquire 100% of their interests in the Maverick Springs project and the Battle Mountain projects. Pursuant to the asset purchase agreement, the vendors have retained a $500,000 deposit previously advanced by Goldco. Element79 Gold, which assumed all obligations of Goldco under the asset purchase agreement upon completion of its acquisition of Goldco, made an additional $1,500,283.97 cash payment as directed by the vendors and issued a promissory note for US$150,000 that will be fulfilled by the end of January, 2022.
Element79 Gold also issued 5,095,733 shares to the vendors, and created and issued a contingent value right (CVR) to Waterton Nevada Splitter LLC (Splitter LLC), a subsidiary of Waterton. Pursuant to the CVR, Splitter LLC is entitled to receive a cash payment of $2-million payable on the earlier of the occurrence of commercial production and the date that is 12 months following the closing of the asset purchase agreement. Refer to company press release for more details.
The Maverick Springs project is subject to a total net smelter return royalty (NSR) of 7.4%, including 1.5% payable to Maverix Metals Inc. Element79 Gold expects to renegotiate the various NSRs in order to create an economically viable path.