Scottie in B.C. royalty financing deal with Franco-Nevada

Scottie Resources Corp. [SCOT-TSXV] said Tuesday it has entered into a financial arrangement with Franco Nevada Mining Corp. [FNV-TSX, NYSE]. Under the agreement, Scottie has agreed to sell a 2.0% gross production royalty to Franco-Nevada for $8.1 million. The royalty will apply to all minerals produced on Scottie’s claims in the Stewart mining camp and in the Golden Triangle area of northwestern British Columbia.

In addition, Franco-Nevada has agreed to purchase Scottie common shares consisting of the entire back-end of a $1.5 million charity flow-through private placement priced at 27.5 cents per common share.

Scottie shares were unchanged Tuesday at 19 cents and currently trade in a 52-week range of 35 cents and 14.5 cents.

News of the deal comes after Scottie recently raised $3.6 million from a private placement of nonflow-through units priced at 18 cents each and charity flow-through units priced at 27 cents per unit.

The company said it intended to use the proceeds for exploration related to programs at the company’s Scottie and Blueberry mineral properties.

“The transaction [with Franco-Nevada] validates the progress we’ve made and recognizes the value opportunity present at Scottie,’’ said Scottie President and CEO Brad Rourke.  “With this funding from Franco-Nevada and the proceeds raised from the January private placement, Scottie is in a strong position for future operations.’’

Scottie holds more than 60,000 hectares of mineral claims in the Stewart mining camp in British Columbia’s Golden Triangle region. Its portfolio is highlighted by a 100% interest in the Scottie gold mine property, which includes the Blueberry zone.

The Scottie gold mine is located on the Granduc Road, 35 kilometres north of Stewart, B.C., and north of Ascot Resources Ltd.’s [AOT-TSXV, AOTVF-OTCQX] Premier project, where the mill was recently refurbished in anticipation of production.

The Scottie Gold Mine project consists of the Scottie Gold Mine, Bow, Summit Lake and Stock claim groups. The project includes the past-producing Scottie Gold mine, which operated from 1981 to 1985, producing 95,426 ounces of gold from 183,147 tonnes of mineralization.

The Scottie mine was ultimately shut down due to a drop in the gold price combined with high interest rates.

While 13 distinct gold-bearing vein zones have been identified on the Scottie Gold Mine project, mine production was primarily from one vein.

The company said there are over 20 gold and/or silver bearing mineralized zones within the project area, and prior to the 2020 field season, only four had been drill tested.

The majority of historical drilling was done from underground, and therefore consisted of short holes with single targets – with very restricted drill pad locations. Recent exploration by Scottie has used the benefits of drilling from surface to target areas that were inaccessible with underground drill locations, and where possible to test multiple targets with individual holes.