TNR Gold sells 0.5% NSR Mariana royalty for $9M (U.S.) 2022-07-26 08:18 ET - News Release
Mr. Kirill Klip reports
TNR GOLD MONETIZES ROYALTY HOLDING ON MARIANA LITHIUM BY PARTIAL NSR SALE TO LITHIUM ROYALTY CORP
TNR Gold Corp. has entered into a royalty purchase agreement dated July 22, 2022, with an Ontario limited partnership affiliated with Lithium Royalty Corp. (LRC) for the sale of a portion of its net smelter return (NSR) royalty involving the Mariana lithium project. LRC has purchased from TNR a 0.5-per-cent NSR royalty for $9-million (U.S.), including a 0.05-per-cent NSR royalty sold by TNR on behalf of its shareholder. This represents one-quarter of the NSR royalty held by the company. LRC is an arm's-length party to the company.
On Oct. 21, 2021, TNR Gold announced that, further to the company's news release dated Sept. 27, 2021, International Lithium Corp. had announced the completion of the sale to Ganfeng Lithium Netherlands Co. BV of International Lithium's remaining 8.58-per-cent stake in Litio Minera Argentina SA (LMA), the owner of the Mariana lithium project in Salta, Argentina. The deal included confirmation that LMA would assume all rights or obligations that International Lithium had in respect of the Mariana property. TNR Gold holds a 2-per-cent NSR royalty on the Mariana lithium project.
Both TNR Gold and LMA have acknowledged LMA's responsibility to pay the 2-per-cent NSR royalty on the commencement of commercial production at the Mariana lithium project, and LMA has assumed the right to the repurchase of 50 per cent of the NSR royalty (that is 1 per cent).
TNR sold the portion of the NSR royalty, which is not subject to any buyback rights of LMA. After the closing of transaction with LRC, TNR will hold a 1.5-per-cent NSR royalty, including a 0.15-per-cent NSR royalty held on behalf of a shareholder (which represents a 1.35-per-cent NSR royalty held by TNR and a 0.15-per-cent NSR royalty in favour of the shareholder). The closing of the sale with LRC is subject to the parties' filing of certain notices in the Salta Mining Court in Argentina.
LMA has the right to purchase from TNR 1.0 per cent of the NSR royalty for aggregate payment of $1-million at any time within 240 days of commencement of commercial production as defined in the underlying agreement. The company would receive $900,000 and its shareholder would receive $100,000 on the completion of the repurchase by LMA. If such purchase was made by LMA, TNR would hold a 0.45-per-cent NSR royalty and its shareholder would hold a 0.05-per-cent NSR royalty.
Kirill Klip, TNR's chief executive officer, commented: "We are very pleased that, after many months of deliberate negotiations, we have achieved this major milestone for our company and a further validation of TNR Gold's business model. By monetizing part of our royalty holdings, we are providing a very important benchmark for valuations of assets in our royalty portfolio and generating very significant capital while selling to LRC only a portion of our royalty holding on the Mariana lithium project. This strategic transaction with LRC allows us to significantly improve our working capital position and strengthen our balance sheet. The parties expect the transaction to close within 60 days. The company has received an initial advance of $350,000 (U.S.) from LRC under the terms of the royalty purchase agreement.
"We believe that our royalty holdings are undervalued and their appropriate values are not reflected in the company's share price. This transaction clearly demonstrates it. We have generated a total amount of cash for TNR Gold that is well above the company's recent market capitalization. We have received significant industry interest in our assets and the company is working on potential new strategic partnerships to provide further benchmarks for the market valuations of our royalty holdings."
About TNR Gold Corp.
TNR Gold is working to become the green energy metals royalty and gold company.
Over the past twenty-six years, TNR, through its lead generator business model, has been successful in generating high-quality exploration projects around the globe. With the Company's expertise, resources and industry network, it identified the potential of the Los Azules Copper Project in Argentina, which is being developed by McEwen Mining Inc. now. TNR Gold holds a 0.4% NSR Royalty on the Los Azules Copper Project, including a 0.04% held on behalf of a shareholder.
TNR retains a 1.5% NSR Royalty on the Mariana Lithium Project in Argentina, of which 0.15% of the 1.5% NSR is held on behalf of a shareholder. LMA, has a right to repurchase 1.0% of the NSR Royalty on the Mariana Project, as described above.
TNR also holds a 7% NPR holding on the Batidero I and II properties of the Josemaria Project, which is being developed by Lundin Mining. Lundin Mining is part of the Lundin Group, a portfolio of companies producing a variety of commodities in several countries worldwide.
TNR provides significant exposure to gold through its 90% holding in the Shotgun Gold porphyry project in Alaska. The project is located in Southwestern Alaska near the Donlin Gold project, which is being developed by Barrick Gold and Novagold Resources Inc.
The Company's strategy with Shotgun Gold Project is to attract a joint venture partnership with one of the gold major mining companies. The Company is actively introducing the project to interested parties.
At its core, TNR provides a wide scope of exposure to gold, copper, silver and lithium through its holdings in Alaska (the Shotgun Gold porphyry project) and Argentina (the Los Azules Copper and the Mariana Lithium projects) and is committed to the continued generation of in-demand projects, while diversifying its markets and building shareholder value.
We seek Safe Harbor.