Rye Patch Gold Corp (TSX VENTURE:RPM)(OTCQX:RPMGF)(FRANKFURT:5TN) is pleased to announce that it has settled the legal dispute between Rye Patch and its wholly-owned subsidiary, Rye Patch Gold US Inc. and Coeur Mining Inc.’s wholly-owned subsidiary, Coeur Rochester Inc. Rye Patch and Coeur engaged in the legal dispute over title to certain LH and OG unpatented lode mining claims covering portions of the Rochester and Packard mine areas. In settlement of the legal dispute, Rye Patch will convey all of the disputed LH and OG unpatented lode mining claims (comprising 386 of the 410 LH claims and all three OG claims) to Coeur in return for the following:
-- A cash payment to Rye Patch of Ten Million Dollars ($10,000,000);
-- A net smelter returns production royalty equal to 3.4% of the gross
revenue, less refining costs, of gold and silver produced and sold from
the Rochester Mine covering 39.4 million ounces of silver equivalent
(the "NSR"); and
-- At Rye Patch's election, Coeur will transfer to Rye Patch the Blue Bird
patented lode mining claim located adjacent to Lincoln Hill, about two
miles west of Rochester.
William C. Howald, the Company’s President and Chief Executive Officer, stated, “I’ve travelled across Canada, Europe and the United States, and Rye Patch shareholders have expressed their appreciation for the Company’s ability to identify and act on significant opportunities. While we believe our legal position is strong, it is ultimately in the Company’s best interests not to continue with a potentially lengthy and protracted lawsuit at the expense of our core business operations. This settlement allows Rye Patch to move forward and focus on its core business of finding and developing gold and silver resources in Nevada, while providing non-dilutive cash and a royalty stream to the Company to identify the next value-adding opportunity. We are eager to develop our remaining gold and silver assets along the Oreana trend that could contribute upside to our new partners at Coeur or others looking to expand their presence in the Oreana trend. The Company has significant expansion potential along the Oreana trend and tremendous upside potential in our Cortez assets.”
The NSR will be effective as of January 1, 2014 and will terminate after 39.4 million silver equivalent ounces have been produced and sold from the Rochester Mine. Silver equivalent will be determined by converting sales of gold to the equivalent number of ounces of silver based on actual prices of gold and silver at the time of sale. The NSR is non-assignable except to an affiliate controlled by Rye Patch; however, from and after January 1, 2014, the NSR may be assigned (i) in a single-asset transaction, (ii) for cash consideration, (iii) upon at least 30 days’ advance notice to CRI and (iv) to a company whose principal business is the acquisition, holding or management of precious metals production royalties and streams. CRI shall have a right of first refusal to acquire the NSR on the same terms as any proposed permitted sale of the NSR by Rye Patch.
The settlement dismisses the legal dispute among the parties lodged in the Nevada Sixth District Court in 2011. Mr. Howald stated, “I would also like to take this opportunity to thank our Canadian counsel, Koffman Kalef LLP, led by Bernard Poznanski, and our U.S. counsel, Erwin & Thompson LLP, led by Tom Erwin and Frank Thompson, for their wise and determined advocacy on behalf of Rye Patch throughout the litigation proceedings and settlement negotiations.”
About Rye Patch
The Company is a Tier 1, Nevada-focused and discovery-driven company seeking to build a sizeable inventory of gold and silver resource assets in the mining friendly state of Nevada, USA. The Company’s seasoned management team is engaged in the acquisition, exploration, and development of quality resource-based gold and silver projects. Rye Patch Gold US Inc. controls over 75 square kilometres (30 sq. miles) along the Oreana trend located in west-central Nevada, and is developing gold and silver resources along this emerging trend. In east central Nevada, Rye Patch Gold US Inc. is exploring 66 square kilometres along the prolific Cortez trend near Barrick’s new gold discovery. The Company has established gold and silver resource milestones and time frames in order to build a premier resource development company.
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We acknowledge the [financial] support of the Government of Canada.