Big news from Paramount, ICN owns 400,000 shares
Multi Million Ounce Gold Resource Defined at Paramount Gold's Sleeper Project in Nevada
9/13/2011 11:24:16 AM - Market Wire
https://www.stockhouse.com/tools/?page=%2FfinancialTools%2Fsn%5Fnewsreleases%2Easp%3Fsymbol%3DT%2EPZG%26newsid%3D8306195
"Acquired by Paramount in 2010, the 45 square mile project area includes the original Sleeper high-grade open pit mine operated by Amax Gold from 1986 to 1996 as well as newly purchased claims (Paramount press release Aug. 23, 2011) stretching south down trend to Newmont`s Sandman project"
The 8-23-11 press release is about the ICN Resources Dunes Properties and it states:
"A 100% interest in the Claims is being purchased from ICN Resources Ltd. (TSX VENTURE:ICN) of Vancouver in exchange for 400,000 shares of Paramount restricted common stock. ICN retains a net smelter royalty of 1.5% on the portion of the Claims not subject to other royalties and a net smelter royalty of 0.5% on the portion already subject to a 2.0% royalty held by a third party. Closing of this transaction is subject to regulatory approval."
Doing the math, it looks like the Dunes properties are about 15 square miles since on 8-23-11 PZG talked about 30 square miles, now they mention 45.
As far as the 1.5% and the 0.5% spilt, ICN news release from 8-31-10 explains it this way:
Purchase and Sale Agreement
ICN Resources has entered into a purchase and sale agreement for the Property from an arms length public company. The terms of the agreement call for a payment of US$50,120 (paid), with a final payment of approximately $35,000 within 60 days following receipt of all the past exploration data on the property. The vendor expended in excess of $ 1.8 million dollars exploring the property during 2007 and 2008, and they will retain a 2% net smelter royalty. A finder's fee of 200,000 ICN shares will be paid upon closing of this transaction.
and
"ICN Resources is pleased to announce the 100% acquisition of 358 unpatented lode mining claims. The claims cover approximately 3000 hectares (7400 acres) and lie along the west flank of the Slumbering Hills in Humboldt County, Nevada. These claims are located between the well-known Sleeper Mine (Paramount Gold & Silver Corp.) and the newly discovered mineralization at the Sandman Project (Fronteer Gold -- Newmont Mining JV). The Property is immediately north and west of Sandman, and adjoins ICN's recently staked Dunes Project."
and
from ICN news 8-24-11
"The 606 Claims subject to the Agreement (the "Claims") cover a total of approximately 12,000 acres (4,900 hectares) and are located in northwestern Nevada, approximately 30 km northwest of Winnemucca. A link to a claim map is given in Paramount's News Release."
----So it would appear that 0.5% NSR applies to 7,400 acres, with the 1.5% NSR applying to the 4,600 acres. 45 square miles is 28,800 acres, so ICN has NSR's on 42% of the property.
also a bit more from PZG 8-23-11:
"A 100% interest in the Claims is being purchased from ICN in exchange for 400,000 common shares in the capital of Paramount (the shares are subject to a four month plus one day hold period). ICN retains a net smelter royalty ("NSR") of 1.5% on the Claims not subject to other royalties (248 in total) and a net smelter royalty of 0.5% on the remaining claims which were already subject to an underlying 2.0% royalty to a third party. Paramount has the option to purchase 0.5% of either or both NSRs for a cash payment of $500,000 each. Closing of this transaction is subject to regulatory approval and a 15 day due diligence period."
If PZG exercised the option, that could be an additional $2,000,000 into the ICN kitty (assuming $1,000,000 for both 0.5% NSR's, plus assigning an additional value of $1,000,000 to the other 1%); not to mention 400,000 shares of PZG already worth almost $1,200,000.
So potential of $3,200,000 of value here within the Dunes deal with PZG alone? This would cover 19% of ICN Resources market cap, assuming a current market cap of $16,600,000. And this assumes PZG share stays around $3. Wow, incredible amount of value here that is not currently being realized by the market.