Nevada Sunrise Gold Corp. [NEV-TSXV] said Friday December 29 that it has signed a definitive agreement to acquire a 100% interest in the historic Lovelock Cobalt Mine property, which is located roughly 150 km east of Reno, Nevada.
Nevada Sunrise is a Vancouver-based junior with interests in gold, cobalt, and lithium exploration projects in Nevada. Its gold assets include a 100% interest in the Golden Arrow project near Tonopah, Nevada. That project is subject to an earn-in transaction with Emgold Mining Corp. [EMR-TSXV]. It also holds a 21% stake in a joint venture with Liberty Gold Inc. [LGD-TSX] at the Kingsley Mountain gold project, near Wendover, Nevada.
Its lithium asset portfolio includes a 100% interest in the Neptune, Jackson Wash, and Aquarius projects, a 50% interest in the Gemini Project and the right to earn a 100% stake in the Atlantis Project.
Nevada Sunrise first announced that it had secured an option to earn a 100% interest in the Lovelock Cobalt Mine property on November 11, 2017 and would follow up by signing a definitive agreement within 30 days.
Under the terms of an agreement announced on Friday, Nevada Sunrise can acquire the interest by making cash payments and issuing shares to the vendor over a three-year period from the date of signing, subject to a 2% net smelter return royalty. The payments will be made as follows:
- $3,000 in cash for an exclusive due diligence period (paid);
- $15,000 in cash and 200,000 common shares will be paid after an agreement is signed and the deal is approved by the TSX Venture Exchange
- $20,000 in cash and 200,000 common shares to be issued on the first anniversary
- $25,000 in cash and 250,000 common shares on the second anniversary
- $30,000 in cash and 300,000 common shares on the third anniversary.
Sunrise said it will have the right to accelerate the payments at its discretion. On or before the 10th anniversary of closing, Nevada Sunrise has to option to purchase 50% of the NSR for US $1.5 million.
The Lovelock Mine property area consists of 35 unpatented claims in the Cottonwood Canyon area of Stillwater Range, covering 283 hectares. It was discovered by George Lovelock and Charles Bell around 1880. According to U.S. Government annual reports, the Lovelock Mine saw limited production of nickel, copper and cobalt, starting in 1883.
At the time, the primary cobalt minerals was identified as “cobaltite,” a compound of cobalt, nickel and arsenic. Records of a geochemical analysis from that era indicate that the average composition of the cobaltite contained 17.3% cobalt and 13.62% nickel.
The mine operated from 1883 to 1890, with 500 tons of cobalt and nickel mineralized material shipped to England for processing, according to reports. An English company attempted to start a smelting operation in 1898 but did not succeed. There has been no further production from the Lovelock Mine for well over a century.
“The acquisition of the Lovelock Mine is yet another facet of our exploration operations in Nevada,’’ said Nevada Sunrise President and CEO Warren Stanyer. “The mineral endowment of Nevada is vast and the Lovelock Mine is a hidden gem within that legacy, considering the renewed interest in cobalt during the past year,’’ he said.
“Nevada Sunrise looks forward to applying modern exploration methods to the Lovelock Mine, which in today’s terms could be judged as artisanal workings.’’
On Friday, Nevada Sunrise shares eased 3.13% or $0.005 to $0.155.