Solitario Exploration & Royalty Corp. (“Solitario;” NYSE MKT: XPL; TSX: SLR) and Ely Gold & Minerals (“Ely Gold;” TSX.V: ELY) are pleased to announce that Sandstorm Gold (“Sandstorm”) has purchased a 2.4% net smelter returns royalty (“NSR”) on the Mt. Hamilton gold project (“Mt. Hamilton”) for US$10.0 million. The Mt. Hamilton gold project, located in Nevada, U.S.A., is held by Mt. Hamilton LLC (“MH-LLC”) that is 80%-owned by Solitario and 20%-owned by Ely. MH-LLC received an upfront payment of US$6.0 million upon signing the agreement and will receive a future cash remittance of US$4.0 million on January 15, 2013.
As part of the agreement, MH-LLC will have the option, for a period of 30 months, to repurchase up to 100% of the NSR for US$12 million, provided that Solitario enters into a gold stream agreement with Sandstorm that has an upfront deposit of no less than US$30 million. In addition, MH-LLC has provided Sandstorm with a right of first refusal on any future royalty or gold stream financing for the Mt. Hamilton project.
Chris Herald, President and CEO of Solitario, stated: “Annually, Sandstorm evaluates a significant number of projects for funding participation, we are very pleased that they have elected to participate in the funding of Mt. Hamilton’s development. Sandstorm’s purchase of this royalty confirms our belief that the Mt. Hamilton gold project displays robust economics and outstanding resource growth potential. We are currently focused on permitting and engineering activities, with drilling on the horizon.” Ely’s President and CEO, Trey Wasser, said: “This funding enables the joint venture to drill test the historic Seligman deposit where we hope to add significant economic ounces to the current mine plan.”
About Mount HamiltonSolitario released a feasibility study on the Centennial gold-silver deposit in February 2012 showing favorable economics for an open pit operation with heap leach extraction. Once in operation, the mine is expected to produce 48,000 ounces of gold and 330,000 ounces of silver for an average gold-equivalent production (at a 55:1 silver to gold ratio) of 54,000 ounces per year over an eight-year period, with excellent potential to add additional resources and extend the mine life.
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