Enters into Option Agreement with Eldorado Gold Val-d'Or, Qubec--(Newsfile Corp. - October 15, 2021) - Golden Valley Mines and Royalties Inc. (TSXV: GZZ) ("Golden Valley" or the "Corporation"), announces that it has entered into an option agreement (the "Option Agreement") with Eldorado Gold (Qubec) Inc. ("Eldorado"), a wholly owned subsidiary of Eldorado Gold Corporation, enabling Eldorado to earn up to an additional 50% interest in the Claw Lake Gold Prospect, the Cook Lake Prospect, the Murdock Creek Prospect, all located in Ontario and the Perestroika Prospect, located in Qubec (the "Properties").
Golden Valley and Eldorado are currently parties to a Joint Venture Agreement (the "Existing JV") pertaining originally to an aggregate of nine properties (the "Existing Properties") in which Golden Valley has a 70% undivided beneficial interest, and Eldorado has a 30% undivided beneficial interest. Under the new Option Agreement, the Existing JV will be terminated upon the satisfaction of certain conditions precedent (including the amendment of certain historical royalty agreements pertaining to the Properties), which were satisfied concurrently with the execution of the Option Agreement. Further, Golden Valley has the option to be assigned, from Eldorado for nominal consideration, all of the right, title and interest of Eldorado in and to five of the remaining Existing Properties (Munro Prospect, Recession Larder Prospect, Matachewan Prospect all in Ontario, and the Bogside Prospect in Quebec; Denovo Prospect in Ontario was previously dealt with in a transaction with Highgold Mining Inc.), other than the Properties.
Eldorado may earn an additional 40% in the Properties (the "40% Option") by funding expenditures on the Properties for a minimum of $10,500,000 over a period of 5 years from the termination of the Existing JV and making annual payments to $50,000 per annum to the Corporation ("Annual Payment") with the first Annual Payment being made on termination of the Existing JV and each subsequent Annual Payment being made on the anniversary thereof until Eldorado exercises the 40% Option. Upon exercise of the 40% Option by Eldorado, the parties will be deemed to have formed a joint venture in accordance with the terms set out in the Option Agreement and will use commercially reasonable efforts to enter into a formal joint venture agreement within 60 business days of the exercise of the 40% Option.
In order to earn and acquire an additional 10% undivided interest in the Properties (the "Additional Option"), Eldorado will contribute all joint venture expenditures on behalf of the parties, and deliver to Golden Valley, a preliminary economic assessment (PEA) report in respect of the Properties.
Upon the exercise of the Additional Option by Eldorado, Golden Valley will have a 20% undivided beneficial interest in the Properties and Eldorado will have an 80% undivided beneficial interest in the Properties.
https://www.newsfilecorp.com/release/99571