From LilyGdog Amended NSR Agreement During 2016, the Company issued 15,000,000 common shares at $0.05 under an amended agreement with arm’s length third parties that hold a NSR related to the Company’s interest in the Treaty Creek property located in NW British Columbia. The amended agreement reduces the prior $6 million payment obligation which was potentially triggered if the Company reduced its 51% interest in the property, or granted access for development and tunnel construction.
Additional terms of the amended agreement include: AMERICAN CREEK RESOURCES LTD. MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - FORM 51-102F For the period ended June 30, 2020 - 9 -
• The NSR Holders were issued 15,000,000 common shares of the Company.
• The NSR Holders will hold a 2% NSR on certain Treaty Creek property mineral tenures (“Group I”) and a 1% NSR on the remaining Treaty Creek mineral tenures (“Group II”). The NSR interests apply only to the Company’s interest in the Treaty Creek property. Within 30 days of a Treaty Creek property feasibility study being completed, the NSR Holders will be paid an aggregate sum of $1,500,000 in order for the Company to collectively buy out 0.75% of the Group I NSR and 0.25% of the Group II NSR. At any time the Company may buy out a further 0.75% of the Group I and 0.25% of the Group II NSR for the aggregate sum of $1,500,000. The NSR Holders will retain a 0.5% NSR on the Group I and Group II mineral tenures.
• The NSR Holders were entitled to 25% of the purchase price the Company received in 2016 from the Company’s sale of a 31% interest in the Treaty Creek property to an arm’slength purchaser. Consequently, the Company transferred to the NSR Holders 125,000 of the 500,000 purchaser shares received by the Company from such sale, thereby fully fulfilling this obligation under the amended agreement
• The Company will pay the NSR Holders 25% of any consideration the Company may receive from any non-governmental party for access, easement or right of way over, on, under or through any part of the Treaty Creek property for a mining infrastructure purpose, or fees for the use of the Company’s own infrastructure facilities.
• The Company will pay the NSR Holders 25% of any compensation proceeds the Company may receive from any governmental or quasi-governmental agency for the loss of any rights resulting from the expropriation of access, easement or right of way over, on, under or through any part of the Treaty Creek property for a mining infrastructure purpose.