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US Gold sells Maggie Creek Property to Nevada Gold Mines

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Global Mining Review,


US Gold Corp. has announced the execution on of a transaction related to the Maggie Creek Property between itself, Nevada Gold Mines, and Orogen Royalties Inc.

Renaissance Exploration, Inc. (RenEx), an indirect wholly-owned subsidiary of Orogen, and the company’s wholly-owned subsidiary, Orevada Metals, Inc., are parties to an Exploration Earn-In Agreement dated 19 February 2019, pursuant to which Orevada, by making certain payments and incurring certain exploration expenditures, has the right to earn at least a 50% interest and up to a 70% interest in the Maggie Creek Property, owned by RenEx, in Eureka County, Nevada.

Pursuant to an assignment and assumption agreement dated 9 November 2022, among NGM, Orogen, RenEx, US Gold, and Orevada, US Gold caused Orevada to assign its interest in the original earn-in agreement to NGM. Simultaneous with that assignment, NGM and RenEx entered into an amended and restated exploration earn-in agreement, pursuant to which NGM can earn a 100% interest in the Maggie Creek Property.

As consideration for the assignment of the original earn-in agreement to NGM, US Gold received an upfront cash payment of US$2.75 million dollars from NGM, and NGM agreed that if it exercises the NGM Option and acquires the Maggie Creek Property, it will grant to US Gold a 0.5% Net Smelter Returns royalty on all gold and other recovered and saleable minerals from the Maggie Creek Property, pursuant to a separate royalty agreement between NGM and US Gold, the terms of which have been fully agreed as part of the transaction. Under the US Gold royalty agreement, NGM will have the right to buy back one-half of the US Gold Royalty (reducing the royalty to 0.25% of net smelter returns) for a fixed price of US$500 000. In addition, the US Gold royalty agreement will provide that US Gold waives the first US$800 000 of production royalty payments owed to it, regardless of whether NGM exercises its buy-back rights. Under the US Gold royalty agreement, NGM will also have a right of first refusal to purchase the US Gold royalty if US Gold decides to sell that royalty.

George Bee, President and CEO of US Gold, comments:

“While we have spent the last two years with a laser focus on moving our CK Gold Project along the path to development, we have not lost sight of the excellent exploration portfolio the company holds. In 2021, we drilled two holes at the south end of our Maggie Creek exploration project. While we knew that we had potential along the entire length of the claims, we followed the reasoning of our then Chief Geologist, Ken Coleman, that the geologic horizon hosting the large gold endowment was a stone’s throw away at NGM’s Gold Quarry Mine and might be within reach on the Maggie Creek Project. Previously, the consensus was that structures along the Carlin Trend had put important gold-bearing host horizons beyond reasonable reach. The holes drilled by US Gold intersected the Popovich Formation, the primary host of Carlin-style gold mineralisation and returned anomalous gold and significant elemental anomalies known to be associated with the most enriched gold deposits in the area. We believe all that remains is to vector into what could be significant occurrences of gold mineralisation, judging the extent of the alteration and pathfinder elements, through further exploration.

“Such exploration is very costly and, for US Gold, drilling Maggie Creek comes at a time when there is not a great deal of appetite in the capital markets to fund the resource sector and exploration in particular. We believe that pursuing deeper high-grade mineralisation is best conducted by NGM, who have decades of experience on the Carlin Trend and understand the gold occurrences in the target horizons. We are content to have played a part in what we believe will be another extension to the prolific Carlin Trend, to have recovered more than our investment in the Maggie Creek property, and retained an interest, via a production royalty, for our shareholders in what we hope will be future exploration success. Furthermore, we can now focus exploration efforts on our Keystone property, a 100% owned 20-square mile land package on the Battle Mountain Eureka/Cortez Trend, a highly prospective area just 10 miles on trend from the NGM Cortez Complex.”

Read the article online at: https://www.globalminingreview.com/mining/11112022/us-gold-sells-maggie-creek-property-to-nevada-gold-mines/

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