Balmoral Resources Ltd. (TSX: BAR) (OTCQX: BALMF) announced today that it has entered into a letter agreement to sell the 1% Net Smelter Returns royalty that the Company currently holds on the Fenelon Mine Property in Quebec. Balmoral will sell its rights and interests in the Royalty to Ely Gold Royalties Inc. (TSX-V:ELY) (OTCQB:ELYGF) in exchange for an immediate cash payment of $500,000, as well as 1,000,000 common shares of Ely Gold and 1,000,000 common share purchase warrants of Ely Gold.
For Balmoral shareholders the Fenelon royalty sale provides a non-dilutive cash infusion that exceeds the currently estimated value of the Royalty, based on the published resource/reserve data for the Discovery Gold Zone on the Fenelon Mine Property. Balmoral continues to enjoy exposure to the Fenelon Mine Property through the Company’s share ownership in Wallbridge Mining Company Limited the current holder and operator of the Fenelon Mine Property, the shares/warrants to be acquired in Ely Gold and through its 100% ownership of a land position which surrounds the Fenelon Mine Property (see Figure 1). As well, the Company gains exposure to the portfolio of mainly Nevada-focused, gold royalty and property interests held by Ely Gold.
The common shares of Ely Gold to be issued under the agreement will be subject to a standard 4 month regulatory hold period from date of closing. Each common share purchase warrant will be exercisable for conversion into one full common share of Ely Gold at a price of $0.10 for a period of 18 months from closing. The announced sale remains subject to completion of a formal Purchase and Assignment Agreement between the parties, the approval of the TSXV with respect to the issuance of the Ely Gold commons shares and common share purchase warrants, and the approval of Wallbridge to the transfer of the royalty to Ely Gold. Wallbridge does not have a right of first refusal as it concerns the transfer and sale of the Royalty.
Mr. Darin Wagner (P.Geo. B.C. and Restricted Permit, Que.), President and CEO of the Company, is the non-independent qualified person for the technical disclosure contained in this news release.
About Balmoral Resources Ltd.
Balmoral is a well-funded, multi-award winning Canadian-focused exploration company actively exploring a portfolio of gold and base metal properties located within the prolific Abitibi greenstone belt. The Company’s flagship, 1,000 km2 Detour Gold Trend Project hosts the resource stage Bug and Martiniere West gold deposits and the Grasset nickel-copper-cobalt-PGE deposit. Employing an aggressive, drill focused exploration style in one of the world’s preeminent mining jurisdictions, Balmoral is following an established formula with a goal of maximizing shareholder value through the discovery and definition of high-grade, Canadian gold and base metal assets.
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