Entering text into the input field will update the search result below

Solitario reduces royalty rate at joint venture Mt Hamilton, Shell property adds potential

May 20, 2011 9:26 AM ETXPL
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Solitario Exploration & Royalty Corp. (AMEX:XPL) (TSE:SLR) and Ely Gold & Minerals said Wednesday that they have bought down an existing 2.0% net smelter return (NSR) royalty on gold and silver production from their Mt. Hamilton joint venture project in eastern Nevada.

The venture purchased the 2.0% NSR royalty for $2.52 million, consisting of $1.52 million in cash and $1.0 million worth of shares in Solitario.

Solitario said if funded the entire purchase price, and loaned Ely Gold its 20% proportionate share. The loan will be repaid from Ely's future production proceeds.

As a result of the purchase, the royalty rate on gold and silver production from Mt. Hamilton will be reduced to 1.0%, assuming the joint venture exercises an option agreeement to reduce royalties with other holders.

Closing of the deal is subject to regulatory approvals, Solitario said.

Separately, Solitario also announced today that it has completed an initial evaluation of the Shell gold-molybdenum property optioned in the first quarter of this year. The property comprises eight mining claims located on the south side of the Mt. Hamilton project area.

The company said that the royalty buy down, along with the new potential of Shell, is expected to significantly increase the economics of the project.

At Shell, drilling was conducted on the property between 2006 and 2007, prior to Solitario's involvement. Of the 40 holes drilled, 23 contained significant intercepts of gold and/or molybdenum, according to Solitario.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.