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Miranda inks deal to buy Willow Creek royalty

 

Last updated 11/1/2015 at Noon



Miranda Gold Corp. Oct. 22 reported that it has reached an agreement to purchase a 3.3 percent royalty on the Willow Creek project held by Daniel Renshaw.

Miranda holds the Willow Creek project under lease from Alaska Hardrock Inc. The Renshaw royalty has been separated into the area that covers the patented mining claims on the west side of the project (A Royalty) and the area that covers the patented mining claims on the east side of the project (B Royalty).

The A Royalty covers the area, including the Coleman resource that will be initially developed and placed into production.

The B Royalty covers ground that is prospective for exploration including the Bullion Mountain targets.

Miranda has agreed to purchase up to 100 percent of the A Royalty in a series of seven contracts with each subsequent contract contingent on the prior contract being paid in full.

Pursuant to each contract Miranda will purchase 0.4 percent to 0.5 percent of the royalty for each cumulative US$143,000 paid at the rate of US$5,000 per month plus interest with the first payment due on Oct. 31.

If Miranda does not complete payment of any contract the remainder of the A Royalty will remain with Renshaw.

The seven contracts will be over an aggregate period of up to 200 months, but such contracts and payments can be accelerated and paid off at any time, providing that Miranda pays Renshaw the full payment of US$1 million of principal.

Miranda also has the option to purchase the B Royalty for US$500,000 at any time provided that the A Royalty contracts are not in default.

The B Royalty is subject to terms, conditions and installments that are similar with those of the A Royalty.

Miranda CEO Ken Cunningham said, "It is not a guarantee that Miranda will buy the entire royalty but it provides Miranda with the opportunity to do so at a purchase price and payment schedule that does not overly burden Miranda and recognizes the early stage of development of the Willow Creek project.

Miranda will purchase the royalties for its own account."

Additionally, Miranda has provided Gold Torrent Inc. an extra six months to meet the terms of an exploration and option to joint venture agreement that the companies entered into on the Willow Creek project last November.

Under the agreement, Gold Torrent has the right to earn an interest in the Willow Creek project and to form a limited liability joint venture in the gold project by completing US$1.07 million of work by Nov. 5.

Contingent upon Gold Torrent completing an equity financing of not less than US$1 million by Nov. 5, Miranda has agreed to give Gold Torrent until May 5, 2016 to complete the initial earn-in obligation and until May 5, 2018 to complete US$10 million of expenditures to earn a 70 percent interest.

Gold Torrent plans to use these funds to establish a 150-ton-per-day gravity separation gold operation at the high-grade Willow project.

 

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