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News - DGAP-News: Ely Gold Royalties Closes C$6.0M Line of Credit
Link - https://www.otcmarkets.com/stock/ELYGF/news/DGAP-News:-Ely-Gold-Royalties-Closes-C$6.0M-Line-of-Credit-Facility-with-Eric-Sprott-(TSX-V:-ELY,-OTCQB:-ELYGF)?id=247902
Facility with Eric Sprott (TSX-V: ELY, OTCQB: ELYGF)
Press Release | 11/29/2019
DGAP-News: Ely Gold Royalties Inc. / Key word(s): Miscellaneous
Ely Gold Royalties Closes C$6.0M Line of Credit Facility with Eric Sprott (TSX-V: ELY, OTCQB: ELYGF)
30.11.2019 / 00:19
The issuer is solely responsible for the content of this announcement.
Vancouver, British Columbia--(Newsfile Corp. - November 29, 2019) - Ely Gold Royalties Inc. (TSXV: ELY) (OTCQB: ELYGF) ("Ely Gold") or the ("Company") is pleased to announce that the TSX Venture Exchange (the "Exchange") has conditionally accepted for filing the Company's agreement with 2176423 Ontario Ltd. (the "Lender"), a company controlled by Eric Sprott ("Sprott"), providing the Company with a $6.0 million revolving line of credit (the "LOC"), first announced on October 17, 2019 (the "Financing").
Pursuant to the Financing terms, the LOC is available to the Company, as and when required, until November 29, 2021 (the "Maturity Date"). Interest on principal outstanding under the LOC will bear interest at 10.0% per annum, with undrawn amounts of the LOC carrying a stand-by fee of 2.5% per annum, compounded monthly and payable quarterly. The LOC is secured by a registered security interest over all of the Company's assets, subordinate only to existing prior encumbrances.
In connection with the LOC, the Company has issued to the Lender 16,216,215 non-transferrable loan bonus warrants (the "Bonus Warrants"). Each Bonus Warrant is exercisable, up to the Maturity Date, to purchase one common share of the Company (each a "Bonus Warrant Share") at an exercise price of C$0.37 per Bonus Warrant Share. Based on the Company's current capital structure, such number of Bonus Warrant Shares would represent 14.0% of the Company's issued and outstanding shares and, taken together with Sprott's existing direct and indirect holdings on a partially-diluted basis, would represent 20.76% of the voting shares of the Company. The Lender has agreed not to exercise Bonus Warrants if such exercise would result in Sprott's direct and indirect holdings of the Company's outstanding voting shares being in excess of 19.9% based on the then-current outstanding shares of the Company.
Ely Gold expects to use the proceeds of the LOC principally for the acquisition of additional producing or near-term producing royalties as well as to prioritize its long-term capital management.
In connection with the Financing, the Company will issue 300,000 non-transferrable common share purchase warrants (each a "Finder's Warrant") to Medalist Capital Ltd., an arm's length registered dealer. Each Finder's Warrant will be exercisable to purchase one common share of the Company (each a "Finder's Warrant Share") at an exercise price of C$0.37 per Finder's Warrant Share for a term of three (3) years.
The Bonus Warrants, Bonus Warrant Shares, Finder's Warrants and Finder's Warrant Shares will be subject to a four-month hold period running from November 30, 2019. The Exchange's acceptance remains subject to the payment of customary filing fees and the filing of an Exchange Form 2C1 Declaration by Sprott.
About Ely Gold Royalties Inc. Ely Gold Royalties Inc. is a Vancouver-based, emerging royalty company with development assets focused in Nevada and Quebec. Its current portfolio includes 33 Deeded Royalties and 20 properties optioned to third parties. Ely Gold's royalty portfolio includes producing royalties, fully permitted mines and development projects that are at or near producing mines. The Company is actively seeking opportunities to purchase existing third-party royalties for its portfolio and all the Company's option properties are expected to produce royalties, if exercised. The royalty and option portfolios are currently generating significant revenue. Ely Gold is well positioned with its current portfolio of over 20 available properties to generate additional operating revenue through option and sale agreements. The Company has a proven track record of maximizing the value of its properties through claim consolidation and advancement using its extensive, proprietary data base. All portfolio properties are sold or optioned on a 100% basis, while the Company retains royalty interests. Management believes that due to the Company's ability to generate third-party royalty agreements, its successful strategy of organically creating royalties, its equity portfolio and its current low valuation, Ely Gold offers shareholders a low-risk leverage to the current price of gold and low-cost access to long-term mineral royalties.
On Behalf of the Board of Directors
Signed "Trey Wasser"
Trey Wasser, President & CEO
For further information, please contact:
Trey Wasser, President & CEO
trey@elygoldinc.com
972-803-3087
Joanne Jobin, Investor Relations Officer
jjobin@elygoldinc.com
647-964-0292
Excellent perspective on the posture of gold price:
https://www.gowebcasting.com/events/precious-metals-summit-conferences-llc/2019/11/12/crikey-what-s-going-on-with-gold-by-grant-williams/play/stream/28893?fbclid=IwAR0T3e2ufRIq6mytFz7Y-N_HA2baYZ5vpKZUxjwrziTtT0NLbeqny1tnIv8
A little more patience.
Smoking hot. Hope it holds its gains
Holy Doodle - You seen Wallbridge ?.....High today .74
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=151957211
How solid are these guys' royalties in 'em ?
The bottom line is gold stocks are just entering their seasonally-strongest period of the year. Their big winter rally is fueled by gold’s own, which is driven first by outsized demand from holiday jewelry buying and later new-year investment buying. So both the metal and its miners’ stocks have strong tendencies to rally between late October to late February in bull-market years. It’s the best calendar span to own gold stocks!
This year’s dawning winter rally has great upside potential despite the big recent surges in gold and its miners’ stocks. Gold’s decisive bull-market breakout left traders way more excited about this sector than they’ve been in years. The resulting bullish new-high psychology should feed on itself leading to growing capital inflows. Gold stocks still have a long way up to go to normalize relative to higher prevailing gold prices.
Adam Hamilton, CP
Complete report worth reading
https://www.gold-eagle.com/article/gold-stocks%E2%80%99-winter-rally-4
Agreed with the NIA thing, but I am glad our boys decided to terminate the contract - glad our boys too a stand to preserve the company from pump and dump status.
On another note, I'm starting to think the impeachment proceedings interposed by U.S. Democrats is affecting the price of gold more than I originally thought - wish they would stop the shenanigans, it's hurting our investment.
We had a good day here. Guess the NIA poo-pooh was a non-event. As it should have been.
Ely's comments on NIA should not be seen as a big deal. They have to be conservative and NIA price targets exceed their comfort. I did my own assessment and ELY and it's plans sound very good and worth investment.
GOLD IS UP 19.52 pre-opening. We ought to have a nice ride today.
CAUTION in order: Vancouver, British Columbia--(Newsfile Corp. - October 30, 2019) - Ely Gold Royalties Inc. (TSXV: ELY) (OTCQB: ELYGF) ("Ely Gold" or the "Company") is issuing this press release to address concerns raised by the TSX Venture Exchange (the "Exchange") regarding certain promotional activities.
In July 2019, the Company engaged National Inflation Association of Fort Lee, New Jersey ("NIA"), and Maiella Investment Holdings LLC, (collectively, the "Consultant") to provide investor relations services, including the production and publication of investor bulletins on the Consultant's https://inflation.us website, distribution of investor bulletins to the Consultant's e-mail list, and promotional posts via the Consultant's blogs and social media accounts (collectively, the "Agreement"). The Agreement was not filed with or accepted by the Exchange. In consideration of the Agreement, the Company paid the Consultant a one-time cash fee of US$30,000 for a 6-month contract.
The Company is retracting fifteen NIA articles dated August 1, 2, 5,19 and 30, as well as October 1, 22, 23, 24, and 28 in their entirety. These publications contained overly promotional statements inconsistent with the principles of factual and balanced disclosure pursuant to Exchange Policy and share price targets, revenue and other financial forecasts that failed to comply with National Instrument 51-102. While the Company does believe certain underlying factual information and technical analyses in the Consultant's publications were accurate, the Company does not endorse the share price, revenue and other financial forecasts that have been published by the Consultant and regrets not having exercised greater control over the manner and means by which the Consultant provided its services.
In light of these concerns, the Company has terminated its Agreement with the Consultant effective October 28, 2019. In addition, the Company has requested that the Consultant take down the online publications listed above and not publish any additional information, regarding Ely Gold.
Company management remains positive about the Company's outlook, including; (1) its continued progress toward closing the $6.0 million convertible debt financing announced on October 17, 2019; (2) the favourable exploration results reported by Wallbridge Mining Company Limited in its October 21, 2019 news release; and (3) Gold Resource Corp.declaring commercial production at its Isabella Pearl Mine in its October 7, 2019 news release. Shareholders and other Company stakeholders are encouraged to look to the formal disclosure record under the Company's issuer profile at www.sedar.com and on the Company's website at www.elygoldinc.com for material information regarding the Company.
************
I believe Ely to be a solid investment but expect it to go slower than NIA promoted it. Need the exit of NIA follower that is now expect to end and dust to settle till we see how it begins to move forward again. GLTY
Hope so. Heavier buying at end of day so maybe that will be a bottom of pullback????
Ely Gold Royalties (TSXV: ELY) has achieved a record 7 straight trading days of green candlesticks (closing at a higher price than its opening price)!
ELY gained by $0.035 or 8.75% yesterday to close at $0.435 per share on HUGE volume of 589,775 shares! This was ELY's highest closing price in 9 1/2 years and its third highest volume day of all-time! ELY is currently up by 45% from NIA's initial suggestion on August 1st at $0.30 per share!
SEEKER, thanks for the private message - I think the system prevents me from replying since I'm not a paid member, but thanks.
That is how NIA sees it. And it makes sense to me. Of course the market may see it differently. Bottom line is the Ely plan looks like a winner to me. My basis is $.26 USD although I would be happy to buy here in $.30s.
So, ELYGF should be trading at US$.4235 bottoms, per your thinking (CAD$.55 x .77 = US$.4235).
Hmmmm ....... seems like we have about US$.089 left to go upwards!
I KNOW !.....But she's currently in the midst of a somewhat brutal up-spike !......A "Fly-Away Up-Gap" if you will....
And I don't buy into no "Fly-Away Up-Gaps".....
I'm a much cheaper guy than that....he-he
Current undervalued by about 25%
NIA has put together a chart showing how the median gold royalty company owned by VanEck Vectors Gold Miners ETF (GDX) is trading with an enterprise value/revenue ratio of 17.33, which is 5.50X higher than the median gold mining company owned by GDX. Why are gold royalty companies worth so much more than gold mining companies? The median gold royalty company generated free cash flow last quarter equal to 54.55% of revenue vs. the median gold mining company generating free cash flow equal to only 5.42% of revenue! Click here to see NIA's exclusive chart!
Wallbridge Mining (TSX: WM) is up another 12% today to $0.56 per share making it by far the #1 best performing mid/large-cap gold stock in the entire market! WM's market cap is now CAD$279.22 million and after subtracting its cash position of CAD$14.6 million it has an enterprise value of CAD$264.62 million. On a very conservative basis, ELY's 2% royalty in WM's Fenelon project deserves a valuation equal to 11% of WM's enterprise value due to the fact that the market is currently valuing gold royalties 5.50X higher than equity in the same gold mine!
Therefore, ELY's 2% royalty in WM's Fenelon project is worth a minimum of CAD$29.11 million!
At the foundation of ELY is their Nevada Select business that has optioned 22 gold properties to 20 different publicly traded gold explorers. These 22 option agreements are contracted to bring in total 2019 revenue for ELY of USD$957,500 (CAD$1,250,687). In addition, ELY will receive advance royalty payments this year from 6 previously completed option agreements totaling USD$105,000 (CAD$137,151). With ELY's Nevada Select set to generate total 2019 revenue of CAD$1,387,838 from option agreements and advance royalty payments, the median gold royalty company enterprise value/revenue ratio of 17.33 values ELY's Nevada Select business at CAD$24.051 million!
Therefore, ELY deserves to trade immediately with an enterprise value of CAD$53.16 million from its WM royalty and Nevada Select business alone! ELY has a net cash position of CAD$2.1 million so ELY deserves to trade immediately with a market cap of CAD$55.26 million which equals a price of $0.55 per share!
Keep in mind, we're not even including ELY's Isabella Pearl royalty and Jerritt Canyon royalty, which will both begin to generate HUGE royalty revenues for ELY in its upcoming quarters!
Keep at 'er there Seeker - Such dd is awesome !
They've sure smacked gold bullion today though eh ?
To back down below $1500 - The Bass Turds !
All on the kicking of the Brexit can down the road ?
ELY and Wallbridge AND Sprott - Oh my goodness
Man, that Sprott has been sure been highly "active" throughout all of this hasn't he ?
Just WHEN might he be planning to sell ? (would be one worry for me) ?
Amyhoo - Carry on ! Hope ELY does well for ye' (and MAYBE us)
Ely - Recommend anyone not invested get moving at these prices. Trading off to a good start this morning.
NIA's Ely Gold Royalties (TSXV: ELY) Bullish chart and commentary
currently has the #1 most bullish chart out of all gold stocks! On Friday, ELY gained another $0.02 or 5.26% to close at $0.40 per share on HUGE volume of 386,720 shares, more than quadruple its average daily volume! This was ELY's second highest daily closing price and #1 highest weekly closing price of the last 9 1/2 years!
ELY's current 14-day relative strength index (RSI) is only 62.77. During ELY's summer rally, its RSI first surpassed 62.77 on July 9th when it closed at $0.22 per share. Over the following month, ELY gained an additional 113.64% to reach a new 9 1/2 year high of $0.47 per share! Click here to see for yourself!
ELY has achieved green candlesticks on the last six consecutive trading days! This means that on each of the last six trading days ELY closed at a higher price than it opened! This is ELY's most consecutive green candlesticks in history!
Look for ELY to surpass its 9 1/2 year high of $0.47 per share reached on August 6th sometime this week! ELY's #1 most valuable asset is their 2% royalty in Wallbridge Mining (TSX: WM)'s flagship Fenelon project. When ELY hit $0.47 per share on August 6th, WM hit $0.47 per share on the exact same day! Both ELY and WM finished the month of September at $0.32 per share. Since then, WM has gained by 56.25% to a new 11 1/2 year high of $0.50 per share vs. ELY only gaining by 25% to $0.40 per share!
ELY's #2 most valuable asset is their 0.75% royalty in the main reserve area of Gold Resource Corp (GORO)'s new flagship Isabella Pearl Mine in Nevada. GORO finished the month of September at $3.05 per share and has since gained by 34.1% to a new 6 1/2 month high of $4.09 per share!
For the month of October, WM has been the #1 largest gaining mid/large-cap gold stock and GORO has been the #4 largest gaining mid/large-cap gold stock! ELY is likely to rapidly catch up to the October gains of both WM and GORO in the days ahead!
Check out NIA's exclusive chart comparing ELY's October gains to both WM and GORO by clicking here!
Presentation October
https://elygoldinc.com/assets/docs/presentations/2019-10-21-CP-ELY.pdf
ELY will Break $0.50 and Explode Towards $1 Very Soon!
More NIA Comments:
Ely Gold Royalties (TSXV: ELY) will break $0.50 and explode towards $1 per share very soon, in our opinion! Gold Resource Corp (GORO) is up by 4.5% today to $4.08 per share and has now gained by 34.2% during the month of October due to the HUGE success of their new Isabella Pearl gold mine in Nevada that is rapidly ramping up production and ELY holds a 0.75% royalty in the main gold resource and larger royalties of between 2% and 3% in the surrounding gold claims that GORO is now aggressively exploring to extend the mine life of Isabella Pearl! ELY will begin to report HUGE royalty revenues from GORO in their upcoming 3Q 2019 results!
Undervalued now see NIA assessment of ELY
Wallbridge Mining (TSX: WM) is up another 8% today to $0.47 per share and ELY deserves to follow with its most valuable asset being their 2% NSR royalty in WM's Fenelon project! As a good rule of thumb, ELY is extremely undervalued any time its market cap is less than 20% or 1/5th of WM's market cap. Currently, WM's market cap at $0.47 is now up to CAD$225.65 million! This means ELY immediately deserves a market cap of CAD$45.13 million for a share price of $0.46! Look for ELY to rise by 22.67% from its current price of $0.375 within days to reach a minimum of $0.46 per share, in NIA's opinion!
The second most important company for ELY's valuation is Gold Resource Corp (GORO) and its up another 1.7% today to $3.90 per share!
GORO has gained by 29.14% for the month of October due to the HUGE success of its brand new Isabella Pearl gold mine that has been ramping up gold production ahead of schedule! ELY holds a 0.75% royalty in Isabella Pearl's main gold resource and larger royalties of 2-3% covering the surrounding claims that GORO is aggressively exploring to extend the mine life of Isabella Pearl!
ELY will begin to report major royalty revenue from GORO's Isabella Pearl mine in its upcoming 3Q 2019 results! It will produce 40,000 oz of gold per year!
NIA commentary breakout
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The U.S. chart of Ely Gold Royalties (ELYGF) is setup perfectly. ELYGF gained by 12.31% on Tuesday to $0.292 per share on strong volume of 258,675 that was 2.6X above average. ELYGF rallied into the close just like we predicted and finished at its high of day!
ELYGF's Tuesday closing price was its highest since August 12th and its volume was its highest since August 23rd! Click here to see for yourself!
ELYGF successfully broke out from its symmetrical triangle pattern that formed over the last three months! It is extremely significant that this breakout occurred on strong volume! ELYGF's strong volume indicates that this is a real breakout and we know it is being supported by real fundamental factors!
Much more HUGE news will likely be coming from ELYGF's Wallbridge Mining (TSX: WM) in the days/weeks ahead. In addition to WM's drill hole FA-19-086 intercepting 27.00 g/t gold over 38.39 metres for 1,036.53 grammeters of gold, WM said that they are, "keenly awaiting further assay results of surrounding batches from this hole which, based on the mineral assemblages described, should carry some additional gold mineralization." Meaning, WM has only received back the assay results for that 38.39m batch of gold, but there were additional batches of gold from this same drill hole that will cause its total grammeters of gold to rise even higher.
More importantly, WM has already drilled two additional drill holes within 100m to 150m from FA-19-086 and these two drill holes also returned mineralized intersections of significant width with visible gold! If their assay results are also strong it is impossible to predict how high ELYGF will rise in the upcoming weeks!NIA
Good presentation by our CEO:
https://us13.campaign-archive.com/?u=8a80084600706abb797a336f7&id=9baf343527
Good town hall presentation by our CEO:
https://us13.campaign-archive.com/?u=8a80084600706abb797a336f7&id=9baf343527
Thanks Seeker for these posts - I'm relatively new around here.
NIA observtion of ELY and Eric Sprott desire to own as much ELY as allowed.
Back on June 10th, Ely Gold Royalties (TSXV: ELY) wasn't even planning to conduct a private placement but billionaire Eric Sprott contacted the company requesting ELY to issue a large private placement solely to him. ELY didn't need the money and wasn't interested in diluting shareholders knowing that it has multiple major royalties that are about to begin generating HUGE revenue, but because Sprott has surpassed Frank Giustra to become the #1 kingmaker in the gold mining industry after recently profiting $1 billion on Kirkland Lake Gold (KL), ELY decided to sell him 5,615,454 shares for CAN$1,673,360 giving Sprott a 5.69% stake in ELY.
Sprott's investment into ELY came less than one month after he purchased 29,166,667 Wallbridge Mining (TSX: WM) shares for CAD$7 million equal to a 6.07% stake in WM. After investing into WM, Sprott realized that ELY owned a large 2% NSR royalty in WM's Fenelon project and decided that ELY was actually a much better way to play the high grade Fenelon gold mine because ELY will fully capitalize on all of Fenelon's upside without any of the downside risks (drilling costs, CAPEX, etc) of WM!
From what we understand, Sprott was interested in buying a much larger stake in ELY than the 5,615,454 shares that ELY was willing to offer. He is well aware that we are only nine months away from WM launching production at the Fenelon mine by initially mining/processing 400-500 tpd with grades in the 10-13 g/t range for initial annual production of 60,000 oz of gold per year. At current gold prices, WM's Fenelon mine will initially generate CAD$2.34 million in annual royalty income for ELY, thereby increasing ELY's annual revenue by more than 100% to CAD$4.45 million.
Based on the average enterprise value/revenue ratio of ELY's gold royalty peers of 20, this will value ELY at $0.94 per share for a gain of 176.47% from yesterday's close of $0.34 per share!
Sprott appears desperate to increase his ELY stake to 19.99% of the company. A few days ago, he made an unbelievable offer to ELY that we have NEVER seen him offer to any other company! Sprott knows that ELY doesn't want to dilute its shareholders right now, but because ELY is the most well-connected company in the Nevada gold royalty space... they sometimes come across unbelievable opportunities to acquire amazing royalty assets for pennies on the dollar.
Sprott has agreed to provide ELY with a CAD$6 million line of credit. If ELY came across a new unbelievable royalty acquisition opportunity, it now will have the ability to immediately draw down on this line of credit to make the acquisition immediately and ELY won't need to repay the money until 24 months later with Sprott receiving the right to convert all or any part of the outstanding line of credit into ELY shares at a price of C$0.37 per share (a premium of 7% when the deal was signed last week).
Sprott is hoping that ELY will draw down on this line of credit for the full CAD$6 million so that on the maturity date 24 months later he can convert the CAD$6 million owed into 16,216,216 ELY shares, which will give Sprott a total ELY stake of up to 19.9%! This is the maximum stake he can take under TSX rules and he only buys 19.9% stakes in a select few companies that he is extremely confident about! ELY appears ready to explode to new all-time highs!
See link for Expert commentary on ELY
https://www.streetwisereports.com/pub/co/2272
Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB) features a unique royalty generation model. The company holds a sizeable portfolio of resource properties in the Western United States—mostly Nevada—that it makes available to sell outright or through a four-year option contract. Once the buyer completes the payments, it owns outright 100% of the project, and Ely Gold retains a royalty on future production.
The buyer has no work commitments. If a buyer on a four-year option decides not to continue with the payments, the property is returned to Ely Gold.
Trey Wasser, Ely Gold's president and CEO, told Streetwise Reports, "Our model is much more scalable than the traditional joint venture model, as we have no property/exploration management responsibilities. This allows us to build a much larger portfolio that is constantly generating new royalties. It also allows us to keep our overhead very low and operate just like a royalty company. This keeps the company's cash flow positive. We, in turn, then can actively seek and purchase additional existing third-party royalties. This is how Ely Gold is transitioning into North America's newest gold royalty company."
Ely Gold's portfolio currently includes 33 deeded royalties, 21 properties optioned to third parties, and more than 20 properties available for optioning.
The company is one the radar of some of the most well-known names in the resource industry. In July, a company controlled by Eric Sprott purchased a 1% royalty on the Fenelon Mine property, located in central-west Quebec, that is operated by Wallbridge Mining Company Ltd., for US$1.25 million. Ely Gold retains a 2% royalty on the property.
Sprott also participated in an Ely Gold private placement, purchasing approximately 5.6 million Ely Gold units at the price of CA$0.18 for gross proceeds of more than CA$1.01 million. Each unit consists of one common share and one half of a common share purchase warrant; the warrant carries an exercise price of CA$0.30 and is valid for three years. This placement has Sprott holding 5.7% of Ely Gold shares, 8.3% if the warrants are exercised.
In January, Exploration Capital Partners 2005 Limited Partnership, where noted resource investor Rick Rule serves as president, subscribed for 9.069 million units at CA$0.11 per unit in the first tranche of a private placement. Each unit consists of one common share and one common share price warrant to purchase an additional share at an exercise price of CA$0.22 for five years. Exploration Capital Partners holds 9.74% of the issued and outstanding shares of Ely Gold on a non-diluted basis, and 17.75% on a partially diluted basis.
Additionally, McEwen Mining recently purchased an option agreement from Fremont Gold Corp. for Gold Canyon claims in Nevada for 300,000 McEwen shares. The claims are located in McEwen's Gold Bar Mining Complex, where the company achieved commercial production in May. McEwen takes over the obligation to pay the option payments to Ely Gold for the property, $112,500 per year for three years and a final payment of $300,000 on or before December 29, 2022.
Ely Gold has been actively selling options on properties, including:
The past-producing Green Springs gold project in Nevada to Contact Gold Corp. for 2 million common shares of Contact Gold, US$25,000 and reimbursement of prepaid claims fees, $50,000 annually for three years, and a final payment of $100,000 in the fourth year. Ely Gold will retain a 1% net smelter royalty on 76 core claims and a 0.75% royalty on two leased claims.
Castle West property in Nevada to Bitterroot Resources Ltd. for $241,000 in payments over four years. Ely Gold retains a 3% net smelter return royalty on precious metals production.
Nevada Rand property in Nevada to Goldcliff Resource Corp. for $250,000 in payments over four years. Ely Gold retains a 2.75% net smelter return royalty on precious metals production.
War Eagle property in Idaho to Integra Resources Corp. for $200,000 in payments over four years. Ely Gold retains a 1% net smelter royalty.
"Ely Gold has royalties on three properties that are producing: Isabella, Fenelon and Jerritt Canyon," Wasser told Streetwise Reports. "In addition, eight or nine of our properties have been optioned to companies—some of the best operators in Nevada—that have mining operations right around the optioned properties. These are operations that are in production or near to achieving production. That means that as the operators explore our properties, all they have to do is find a minor deposit. If they find 200,000 to 500,000 ounces of gold, that might not be enough to build a new mine, but it would work as a satellite deposit. The timeline to production is much shorter, as is the threshold of discovery. They are just looking for more resources to feed their existing mines."
Wasser believes the company is in a sweet spot for picking up royalties. "Ely Gold is now in a position with a market cap of CA$33 million where we are able to look at $2 million to $5 million royalty deals. We have very little competition at that end of the market. For royalty companies with $200 million market caps and higher, that size of deals won't move the needle, but it does for us. These deals really do add up and result in more capital appreciation for shareholders."
See link for Ely's full portfolio
https://stockhouse.com/opinion/independent-reports/2019/09/09/north-america-s-newest-gold-royalty-company-gaining-recognition
Funds to be used for Royalty Acquisitions and Long-Term Capital Management
Vancouver, British Columbia--(Newsfile Corp. - October 17, 2019) - Ely Gold Royalties Inc. (TSXV: ELY) (OTCQB: ELYGF) ("Ely Gold") or the ("Company") is pleased to announce that it has reached a mutual agreement (the "Agreement") with Eric Sprott ("Sprott") whereby Sprott will provide Ely Gold with a C$6.0 million line of credit (the "LOC"). Each draw on the LOC will be in the form of a convertible note (each a "Note") maturing 24 months from its issue date (a "Maturity Date"). At each Maturity Date, Sprott can elect to convert all or any part of the outstanding LOC into common shares of the Company ("Conversion Shares") at a deemed issue price of C$0.37 per share (an approx. 7.0% premium to the last closing price). The LOC will be secured by a registered security interest over all of the Company's assets, subordinate only to existing prior encumbrances.
An election by Sprott to convert the full C$6.0 million principal amount of the LOC would result in the Company issuing 16,216,216 Conversion Shares. Based on the Company's current capital structure, such number of Conversion Shares would represent 14.0% of the Company's issued and outstanding shares and, taken together with Sprott's existing holdings of Company common shares and share purchase warrants, would represent 20.76% of the partially-diluted equity of the Company. Sprott has agreed that he will not seek to convert an amount of the LOC into Conversion Shares if such conversion would result in his partially-diluted holdings of the Company being in excess of 19.9% based on the then-current outstanding shares of the Company.
Ely Gold will use the proceeds of the LOC for the acquisition of additional producing or near-term producing royalties as well as to prioritize its long-term capital management.
In connection with the Agreement, the Company will issue 300,000 warrants as an LOC arrangement fee to an arm's length registered dealer (each an "Arrangement Fee Warrant"). Each Arrangement Fee Warrant will be exercisable to purchase one common share of the Company (each a "Warrant Share") at an exercise price of C$0.37 per Warrant Share for a term of three years.
The Notes, Conversion Shares, Arrangement Fee Warrants and Warrant Shares will be subject to a four-month hold period, in the case of the Notes and Arrangement Fee Warrants, running from date of issue of the security and, in the case of the Conversion Shares and Warrant Shares, running from the date of issue of the applicable underlying convertible security.
The LOC will be available to be drawn down by the Company in two tranches between November 2019 and January 2020, each tranche having a Maturity Date 24 months from the date of the initial draw of the tranche. A first tranche in the amount of C$4.0 million will be made available at closing, and a second tranche of C$2.0 million will be available to the Company by the earlier of January 15, 2020 or the date by which the Company identifies a suitable additional royalty acquisition opportunity. Interest on the LOC will be 10.0% on drawn funds and 2.5% on stand-by funds, compounded monthly and payable quarterly.
The LOC financing and, to the extent applicable, the Company's acquisition of any royalties, will be subject to the settlement by the Company and Sprott of definitive loan and security documentation, and all necessary regulatory approvals, including the acceptance of the TSX Venture Exchange.
Trey Wasser, Ely Gold's President and CEO, commented, "We are very pleased that Eric Sprott continues to support and recognizes the rapid growth profile of Ely Gold Royalties. Having this credit line will allow us to seek out and participate in a wider range of royalty sale processes and allow us to manage our future equity offerings according to market conditions."
I buy this story! And I bought some more today and will probably continue to average in.
NIA comments on ELY
Major unexpected developments occurred last night regarding Ely Gold Royalties (TSXV: ELY) and we decided that we must focus on ELY today because it is almost definitely going to rally big from its current price of only $0.34 per share with a market cap of only CAD$33.57 million and enterprise value of only CAD$29.48 million. ELY's most valuable asset is their 2% NSR royalty in the Fenelon project of Wallbridge Mining (TSX: WM). Yesterday evening, after the close of trading, WM announced that its Fenelon Drill hole FA-19-086 assayed 27.00 g/t of gold over 38.39 metres in the Tabasco zone at a vertical depth of 500 metres! This is equal to 1,036.53 grammeters of gold and is WM's best gold intercept in history!
On September 30, 2019, ELY announced that it entered into an agreement with WM that we believe greatly increased the fundamental value of ELY's WM Fenelon 2% royalty. WM has agreed to officially acknowledge ELY's 2% NSR royalty in their Fenelon project, which is called the Morrison Royalty and dates back to an exploration agreement from Oct 31, 1986 between Morrison Petroleum and Morrison Minerals. WM also agreed to support registration of ELY's royalty with the Ministry of Energy and Natural Resources, Québec. In addition, WM has agreed to pay ELY its full 2% royalty on any future bulk samples at Fenelon that occur after the effective date of June 30, 2019. Finally, toll milling will not be considered a deductible expense when calculating royalty payments.
WM is currently working towards receiving approvals for the start-up of small-scale, 400-500 tpd production from the already-developed areas of the Main Gabbro zones by the second half of 2020. We estimate that this will initially allow WM to produce approximately 60,000 oz of gold per year. WM intends to reach production of 100,000 oz of gold per year within 5 years.
With WM's initial production of 60,000 oz of gold per year, ELY will earn an estimated CAD$2.34 million in annual royalty payments. Once WM reaches production of 100,000 oz of gold per year, ELY will earn an estimated CAD$3.9 million in annual royalty payments.
Over the last twelve months, ELY generated CAD$2.106 million in revenue and is currently trading with an enterprise value/revenue ratio of 14, which is much lower than other gold royalty companies! The average enterprise value/revenue ratio of the three leading gold royalty companies Royal Gold (RGLD), Franco-Nevada (FNV), and Wheaton Precious Metals (WPM) is currently 20.
ELY deserves a much higher multiple than these other gold royalty companies, because ELY's most valuable asset its 2% NSR royalty in WM's Fenelon mine is currently not generating any revenue at all, but will likely soon cause ELY's revenues to more than double! If ELY initially earns annual royalties from WM's Fenelon mine of CAD$2.34 million on top of its current revenue of CAD$2.106 million it will generate total annual revenue of CAD$4.45 million and the average gold royalty company enterprise value/revenue ratio of 20 would give ELY an enterprise value of CAD$89 million, which would equal a market cap of CAD$93.08 million and a share price of $0.94 for a gain of 176.47% from its current share price of $0.34!
I really like this company I believe that longs will be blessed
Full test Crux interview
We interviewed Trey Wasser, President and CEO of Ely Gold Royalties (TSX-V: ELY). They are still a young company, having only being around for 3 years and are focused on Gold properties in Nevada. They have a portfolio of 33 Gold Royalties and 20 Gold properties sold on an option programme. There is an additional 25 Gold properties which are available for sale.
A Gold Royalty is a share of the gross revenue off the top line of a mining operation. The most common being the Net Smelter Revenue (NSR).
For us to invest in a Gold Royalty company, we need to believe that they can identify a good project and can write proper contracts. Trey Wasser and his team have come from a traditional Gold exploration background and have a track-record of identifying Gold properties, they have previously sold projects to Newmont and Osisko. This track-record should lend comfort that they understand the technical aspect of mining properties.
They employ a cookie cutter approach. Gold. Nevada. Small Royalties. They have learnt ropes with small exposure and risk. It has allowed them to be very niche and free of competition as the bigger Royalty companies don’t play in this area. However, now the business is starting to grow and the Royalty amounts are growing and the returns are increasing. They will look to raise money as they feel they have the ability to deploy the capital. And they need smooth and consistent revenue. This is going to be driven by the strategy and focus going forward so find out what say they are going to do.
They have a blended approach to the types of properties that they have. Exploration, development and now producing properties. This will allow them to compete at the lower end but we want to see how they intend to deliver growth. At $40M market cap it is still a small company. Shares are up 160% over the last 3 years but how do they continue to grow? What are their plans? At what point do they start to see increased competition?
There are some meaningful investors involved: Eric Sprott, Rick Rule – money is available. Does Ely Gold Royalty have the potential to re-rate soon? And when do they start to pay a dividend? We like Royalty companies but is this one of them?
Interview Highlights:
Overview of the Company
What are Royalties and Why Should You Invest in a Royalty Company?
The Team, Relevant Experience & Remuneration
Company Strategy, Growth Plan & Challenges
The Market: How do You Stand Out From the Rest? Is There Much Competition?
Matthew Gordon: It’s lovely to have you on the programme Trey. We’re quite keen on Royalty companies. I think Micky Fulp mentioned your company to us, so we were keen to get a hold of you. Why don’t you start off with a one-minute summary on the business and then we’ll get stuck into some questions.
Trey Wasser: Ok, Ely Gold Royalties – we transformed the company basically 3 years ago and started building a portfolio of royal properties, mainly in Nevada with the idea of selling the properties and retaining Royalties. We’ve been doing that for about 3 years now. We’ve built up a portfolio of 33 Royalties. We’ve got 20 properties that have we sold under a 4-year option programme and if they continue with the option, those 20 properties will also generate Royalties. We then we have an additional 20-25 properties available for sale, so we control through our Royalty portfolio, our option portfolio and our available property portfolio, over 70 Gold properties, primarily in Nevada.
Matthew Gordon: Thanks for that summary. For people who are new to Royalties, can you explain what a Royalty is?
Trey Wasser: A Royalty is a share of the gross revenue off the top line of a mining operation. So, you have several types of Royalties. The most common would be a Net Smelter Royalty (NSR) which means that the producing company does get to deduct their cost of smelting the ore, which is the final process, which is to take what comes from the mine to make it 49 Gold. But other than that, the Royalty owner is paid right off the top line of the Gold sales.
Matthew Gordon: Right. How did you get into this? Have you been in the Royalty business for a long time? What’s your experience of it?
Trey Wasser: I’ve been with Ely about 10 years and we were a more traditional Exploration and Development company. And we developed a project in Nevada – the mount Hamilton Project. We took it all the way to Bankable Feasibility Study (BFS) and full permitting and then sold that in 2015. That’s when we changed our business model and we did that by buying out properties from long time prospector in Nevada – Jerry Baughman – and Jerry then came onboard. He runs our Reno office, he’s our main land man and Jerry’s been doing this for 35 years where he stakes properties, very low-cost acquisition on his properties, sells them and retains the Royalties. He built up one portfolio that was sold, ended up with Newmont and it’s now actually a Osisko Royalties, in 2011.
Matthew Gordon: So, tell me a little bit about the team because there’s a couple of things that I would need to believe to invest in a Royalty company. 1. That you know how to identify good projects – projects which will succeed – where the Royalties will be paid or continue to be paid. 2. You’ve an ability around the paperwork around the contracting on a Royalty. I guess sometimes that can be fairly formulaic, but they are quite nuanced at times. So, tell us about the team ability to deliver on those 2 things.
Trey Wasser: Well first of all, the bulk of the team is Jerry and myself. Jerry being the land man and working on the identifying of the properties. As I say he’s been doing it a long time, so we’ve accumulated a database on properties that’s probably second only to Barrick Gold and Newmont in Nevada and the Western United States. So, we’ve very good at identifying the properties, I think the quality of our properties is reflected in our third-party partners. If you go to our website and look at the list of our properties that are in the Royalty portfolio, you’ll see all the major companies listed there. The mid-tier producers, Premier Gold, Barrick, McEwan Mining. The list just goes on and on and they’re top quality companies that are prospecting and producing, especially in Nevada. The beauty of our model is that with our option model, we don’t do joint ventures with our projects. They’re way too hard to handle. So, when you mention from the contract side, because we option the properties 100%, we don’t have any management of the projects once the paperwork is signed. We basically just send them an invoice, follow their news of course and report to our shareholders on the progress on the project. For the most part it’s a very scalable model. And what we have is templates that have been approved by the lawyers. So I do most of the legal and contract work and we work under a template so basically from the time we sign an NDA, it’s our NDA, it’s the same one for everybody (non-disclosure agreement), our term sheets are the same, the same options contract goes to everyone and it’s very easy. So, our Royalty Deeds and Royalty Agreements are, with a few changes, nuances from company to company, basically all the same and you’re right it’s a very good question because you can get jumbled up in a lot of different thing if we accepted everyone else’s contracts, but we don’t do that, we supply the contracts.
Matthew Gordon: That’s fascinating to me. That says to me that you’ve got a cookie cutter approach to this. It’s the same types of companies, same structures and set up. So, 1. You’re focused on Gold, which we’ll come to in a second. 2. It’s Nevada, which I guess we’ll also come to in a second. So, you know what you know, you can replicate it and that’s part of the strategy which you’ve consciously decided to settle on. Is that right?
Trey Wasser: That’s correct. We took Jerrys model and put it on steroids by putting more capital behind it, concentrated more on consolidating claim packages. What you won’t see on the surface is that behind the scenes, to put a property package together, we may go out and stake some claims. We’ll then work on putting all the claims together. The best projects that are unexplored in Nevada, that haven’t seen exploration since the 80’s and 90’s, have claim fragmentation problems where different parties own the claims. The major companies won’t fool with that and take that risk. So, we have been very successful in consolidating claims packages and that’s where the real quality of our projects and our partners comes through. I’d probably add one other thing re. back when you’re talking about the development too is we sensed in that last 6 months that we began to purchase some producing Royalties outside of our Royalty generation program and we can get into a few of those. In the development what we really focus on are projects and Royalties that are in and around producing mines. So, if you look at say Gold Resource, we have a producing Royalty at their Isabella Pearl mine that they just put into commercial production this year. But we also have a larger Royalty on all the exploration ground there at Isabella Pearl, about 7 miles of trend that’s been unexplored. 3 satellites mines or projects, Mena Gold, County Line where there’s been not a lot of production, because of claim fragmentation problems, not a lot of modern exploration. So that’s an example of where our projects are near producing mines so what they need to do is find just more ore, they don’t have to find enough ore to build a brand new mine. That’s the same for the case with Premier Gold at their South Arturo mine, that’s a joint venture with Barrick. We’ve consolidated some claims right in the middle of their mining project. We’ve just approved a sale of some claims right in the middle of McEwan Mining’s Gold Bar mine. So, our properties that are being developed have a very high chance of becoming producers.
Matthew Gordon: So that is to my point. It almost doesn’t matter what projects you’ve got to me as an investor. I just need to know that you’ve looked at them, they meet your criteria, this cookie cutter approach to Gold Royalties in Nevada, and it should be fine. I should just sit back and wait for the dividends, shouldn’t I? That’s the kind of trust level I need to have in you.
Trey Wasser: Well you know I think that having now been at this for 3 years in this business model. Jerry having had more than 10 times that (35 years). We also have on our board Bill Sherriff who’s a long-time prospector in Nevada. We bought all of Bills properties and Royalties a couple of years ago and his database which was huge. He’s on the board advising so we know where the projects, we know who the people are who have them which is why we’re able to do deals to consolidate the properties. But if you look at our website and look at the news flow, you can see we’re pretty prolific at doing deals with quality companies.
Matthew Gordon: You are but also if I go and look at the news flow there’s not a lot of chat around it, no one cares, because it’s fairly formulaic. It’s business as usual which says a lot to me – it says people either trust you or they don’t care. Looking at your share price, it’s heading the right way. Gold price is helping obviously. Just sticking on numbers if I look at market cap, your $40M, you’re a small Royalty company in a sea of quite big precious metal, Royalty and streaming companies in the US. Is that because you’re niche – you’re going to remain niche – you know where you sit in the market or is there room for growth?
Trey Wasser: Oh, absolutely there’s room for growth.
Matthew Gordon: From where?
Trey Wasser: We’re at a point in the market now with a $40M market cap. I’ve always worked around an overall limitation that is we’re looking at deals that would have to be an awfully good deal for it to worth more than 10% of our market cap. So, this time in the first couple of years when we were at a $10M market cap, I was looking at a $1M deals. Last year I was able to start looking at some larger deals and now that our stock, over the last 3 years, has been up 160%, so we are growing. Now we’re looking at deals that are in the $3-5M. They’re flying below the radar of the larger companies for sure and yet we’re at that hockey stick yard with our growth because a $4M Royalty deal to us at that size really moves the needle for us. All of a sudden it can add up to $1M a year in revenue and it’s going to be adding some of these $4M deals that allows us to get to the next step which will be where we can have a predictable income to start paying dividends.
Matthew Gordon: Right, ok. So, you’re going to stick with Nevada, it’s what you know, you’ve got a big data base. This niche means you don’t have to compete with the big guys, because it’s way too small for them so you think there’s enough growth in the next couple of years for you. Is there much competition? Are you competing for these Royalties?
Trey Wasser: Well, yes. We compete for them. Some of them we get a leg up one way or another. Because we are more exploration and development orientated we a look at things that maybe don’t have full Bankable Feasibility Studies (BFS) and necessarily proven and probable reserves especially if they’re with good operators. The big operators they don’t necessarily publish 43-101 reports on their properties. But again, there is some competition. But in the junior Royalty space which there’s probably 4 or 5 companies, I won’t mention them here, but they’re in the area of $100M-$200M market cap, maybe even $300M. That’s what we call the junior Royalty space and that’s what we’re aspiring to right now. We think we have a portfolio, we’re only a Royalty or 2 away from handling the companies that are $100M market cap. You then have a second group – the mid tiers – that would be companies like Sandstorm. They’re closer to $1Bn, they have more predictable revenues, starting to pay more dividends. Then of course the big boys, Franco Nevada, Royal Gold, Wheaton Precious metals. Every time you step up in the Royalty space add to your net asset value you get higher valuation. Franco Nevada’s trade at x25-30 cash flow and x2.5 to 3 Net Asset Value (NAV). The mid tiers are a notch below that, maybe x18-25 cash flow. Then the juniors are a notch below that. So, as you grow you actually get a higher valuation off of the portfolio.
Matthew Gordon: So what’s holding you back?
Trey Wasser: Absolutely nothing. We have been going gang busters. And like I said our stock is performing quite well. We are in this for the long haul. There’s not a secret sauce that says we’re going to magically transform. It’s a long-term game so you will see us continue to acquire more Royalties and do more option and sale deals that create Royalties. And over the next 2 years you’re going to see, we believe, probably 3 of our development Royalties will start production. You were talking about the due diligence before, the one thing, and I use our Lincoln Hill Royalty that we purchased from a third party this year. This is a property that was bought by Core Mining. It’s right next to their Rochester mine. At Rochester they’re building a new 300Mt leach pad that is right next door to the Lincoln Hill deposit. And when they purchased it Core said that this is ore they want to put on the leach pad. It’s 4 times the grade of Rochester. You don’t just have to necessarily just believe what I say. You can go and look at what our partners are saying and look at Core’s press release. They’re saying that they’ll be in production there by 2021, 2022 at the latest.
Matthew Gordon: Coming back to the question, whats holding you back? Is it a case of you can’t deploy capital or you can’t raise capital? What do you see as the hurdles you next need to get over?
Trey Wasser: Well, look we built the portfolio up and this year was really the transformation year for us. We spent the first 2 years mostly working with companies, third party partners, to sell our properties for them to know who we are. To understand our 100% sale option model with the retained Royalty as opposed to the joint venture model. And we were very successful in putting that portfolio together for the first 2 years. It was just last year that we really started doing any work to get out and tell the story to investors. One of our goals for last year, and we completed it right at the end of the year, was to get our first institutional shareholder. So, Rick Rule took us, through one of his Sprott global funds,a 9.5% position, literally right at the 1st of the year this year. And then a couple of months ago in April, we did a deal where we sold a portion of a Royalty we had to Eric Sprott and he took a 5.5% position. Our market cap has doubled this year so we’re looking at bigger deals. We have proven we have the ability to raise the capital, but we want to raise it in conjunction with deals. We currently have about $3.5M in the bank and some marketable securities that puts working capital a little over $4M. But, we have transactions on the table right now where that could be deployed in the near future. But, we do have people wanting put money in the company. We’re not in the mind to go out and to just dilute shareholders at this market valuation to increase the piggy bank. We want to do it in conjunction with deals that are non-dilutive.
Matthew Gordon: So, if we look at where you’ve put yourself in the market, where you’ve slotted yourself in, you’re looking at Explorers and Developers, pre-revenue. So, you’ve got to wait until they get into revenue before you can start issuing dividends to shareholders, right?
Trey Wasser: Well, that’s correct. I mean, as I said we have picked up a couple of producing Royalties, one on Jerritt Canyon this year. That’s going to be a steady, predictable Royalty source. Isabella Pearl has started to pay Royalties and over the next 12 months we think we’ll see a couple more that are better paying. When we have that Royalty income, and we will do about $4M this year. So we more than cover our G&A. We’re not earning capital at all. But a lot of that comes from the property sales, from the option portfolio, which would generate about a $1M-$1.5M this year. Royalty income will be about $1.5M and then we had a gain on the sale of a Royalty too. That is the next step for us, certainly to pay a dividend and I think you can look for that. It’s one of my goals for 2020 is to get this company established to where we have a couple more producing Royalties and that predictable revenue to not just do a one-time dividend program, but on going.
Matthew Gordon: That’s going to be a much more competitive environment where you’re bidding for people who are in production rather than companies which are in expiration and development because you know people want to sort of see there’s money coming shortly.
Trey Wasser: That’s true, but we have a couple of advantages. As I said a $3M-$4M deal for us is significantly it moves the needle. We’re not competing with Franco Nevada and the majors for that. If we sell them once in a while, we’re in the mid-tiers. We might be running into more junior Royalty companies but there’s only a couple of the junior Royalty companies that are actively adding to their portfolio. Some of them just sitting back with the Royalties they already have and maybe you know something here or there but not aggressively out in the market like we are.
Matthew Gordon: We’ve talked about focusing on Nevada. Will you focus on looking outside of Nevada anytime, in terms of this growth story that you want to start telling?
Trey Wasser: Yes, we did purchase this last year and this year. We first purchased a 1% Royalty and then another 2% Royalty on Wallbridge Mining’s Fenelon Project in Quebec. It’s a very exciting project and anybody who is following Quebec mining has probably heard of Wallbridge and this Fenelon Project. It’s just looking very exciting and I think it’s a project that will probably be taken over by a major mid-tier producer. I’m not sure Wallbridge will take it all the way to commercial production. They had been doing bulk sampling there so that’s one example. For producing Royalties, we will look outside of Nevada, if it’s a good jurisdiction. I don’t think you’ll see us buying something in West Africa, but we did look at a producing Royalty in Peru with a very good operator that we know very well. So, if we know the operator and if we view it as a safe jurisdiction, certainly for producing Royalties, we are looking outside of our Nevada comfort zone.
Matthew Gordon: Right and who’s assessing those deals, is that Jerry?
Trey Wasser: No, that’s me.
Matthew Gordon: Ok that’s you. Right so you’ll assess those deals. Ok fine.
Trey Wasser: And I have a couple of outside consultants that I use. One that’s more of a number’s cruncher and he’s worked for hedge funds and bankruptcy and work out kind of situations. I’ve known him a long time. So, he helps on the evaluation of the deals and then we have a couple of outside consultants that are kind of bird-dogging deals and bringing us all the time on an they get paid on a success fee basis.
Matthew Gordon: OK, so we’re Nevada, outside of Nevada if it’s producing, it is Gold. I mean most of the big Royalty companies are precious metal companies in the US. There don’t seem to be many niche Royalty or streaming companies outside of precious metals. Why is that? Is it the sheer size of the market or is it too complicated to do anything else?
Trey Wasser: Well I think if you look at base metals for example they’re not really very exciting , the excitement kind of goes along the electric vehicle, or the battery market. So, you’ve seen some run up there but not really enough opportunities to really exploit. Of course, Franco Nevada has some oil & gas interests that they’ve picked up, so they’ve added a little bit there. Gold Royalty space is the best way to invest in Gold. I mean if you look at the 10-year charts. Franco Nevada, Wheaton and Precious Metals and Royal Gold who’ve out performed SNP. SNP’s been on a pretty good run.
Matthew Gordon: Trey, get into it. To me, I like Royalty companies, everyone’s different. But remind people why you say that? Why do you say they’re the best way to invest in Gold? What are the risks that you’re taking away from the table?
Trey Wasser: Well, look, I love physical Gold and that’s my second favourite way to own Gold. If you just look at the charts and see that Royalty companies have outperformed Gold, handily over the last 10 years. where the regular Gold equities have not. The juniors have underperformed and the GDX is about even. What you get with Royalty company is a very low risk. Like Gold itself but with leverage. The leverage that you get is on the operating business. Because you’re getting the Royalty right off the top. You don’t have development risks as a rule. You don’t have construction risk, you don’t have expiration risk. All of that comes and you have all the expiration upside in an asset without having to pay for it because you’re taking your money off the top, not the bottom after they’ve deducted for exploration cost you know. The big challenge in mining is the CapEx cost that have to be maintained and what your true cost of production is when you look at exploration, the operating expense, the CapEx that’s needed and everything. The Royalty holder isn’t affected by any of that. That’s where the you’re banking on the producer doing a good job and having a good asset. So it’s a very low risk way of getting the leverage of equity in Gold without taking all the risk.
Matthew Gordon: That’s great. And as soon as you guys start paying out a dividend it gets more exciting, right?
Trey Wasser: I think so yeah. Everybody likes to see the dividends.
Matthew Gordon: Everyone loves the dividends. And how are you guys keeping your cost down? It sounds like quite a small compact team, but how do you remunerate yourselves? Do you do it say based on what we’re returning to the company? Are you paying yourself big salaries? How does it work within a Royalty company in the US?
Trey Wasser: Well first of all the way we operate, Jerry and I are the only two full-time employees. We have a part time CFO that is with an accounting firm and we have to give some of our directors’ a small amount for their audit committee work. But Jerry and I are the only two full-time employees. We have a salary plus bonus and the salary is, you can go look at the financials and see it, we both draw up about $150,000 a year in salaries. So for what we’re doing in the shareholder value and then the board decides, based on performance through the year, on both the share price and the portfolio, about paying a bonus. But you know a bonus’ have never been equal even to the salary. We operate very lean, we use outside consultants as I said for a lot of our bird-dogging deals and evaluating deals, and that way we’re not paying a full-time staff. We do have an office manager in Reno whose full time I guess you could say we have a third full time employee there.
Matthew Gordon: I’m very glad to hear it. That’s a very honest – the most honest answer – I’ve had to that question. And I’ve asked a lot of companies, so I appreciate that, I appreciate the low overhead. I can see where you’re at in your development. The rest of this year and the beginning of next year is a big time for you and if you can just get that next deal over the line, it should move the dial considerably. Trey, thank you very much for the introduction to your business. I’d like to catch up with you soon to see how things are going. Sounds like you just as you say started to see the benefit of the hard work over the last 3 years.
Trey Wasser: Listen, I appreciate the chance and the introduction to your viewers and let’s check back with each other here. I think what you see, in our news flow, is several deals that are in the pipeline right now. Different levels and a couple of, as you say, and a couple that could and should move the needle.
cruxinvestor Interview: Ely at hockey stick growth point
(not sure if ever posted here
https://www.cruxinvestor.com/videos/ely-gold-royalties-tsxv-ely---can-they-deliver-a-re-rate-for-existing-and-new-shareholders
From NIA:
2) Ely Gold Royalties (TSXV: ELY) at $0.37 per share: Following NIA's initial ELY suggestion on August 1st at $0.30 per share it immediately gained by $0.17 or 56.67% over the following three trading days to reach a new 9 1/2 year high of $0.47 per share. On Tuesday evening, NIA alerted its members once again about ELY at $0.35 per share explaining how it was in a triangle pattern with a key breakout point of $0.365 per share. Yesterday, ELY gained by $0.02 or 5.71% to close at $0.37 per share, officially achieving a bullish breakout from its triangle pattern that we believe will lead to ELY rallying to new 52-week highs of above $0.47 per share this month! ELY should see smooth sailing to $0.46 and after ELY breaks $0.46 look for it to explode as high as $0.595 per share this month! Click here to see NIA's latest ELY technical chart!
NIA's assessment of ELY
Exactly two months ago, NIA suggested Ely Gold Royalties (TSXV: ELY) at $0.30 per share. Immediately afterwards, ELY made its largest three-day rally in history on its highest three-day volume in history! ELY made a rapid three day gain of $0.17 or 56.67% to a new 9 1/2 year high of $0.47 per share on total volume of 1,505,711 shares! ELY was the #1 largest gaining gold stock during this three-day time period!
When ELY hit $0.47 per share its relative strength index (RSI) surpassed 80, making the stock extremely overbought from a technical perspective. ELY was overdue for a healthy pullback and NIA has been watching ELY extremely closely in recent weeks, with a goal of accurately predicting the timing of ELY's next HUGE rally!
NIA has just upgraded its ELY confidence rating this evening to 98 out of 100, up from our initial confidence rating of 95 out of 100. On Tuesday, ELY showed major strength by rallying $0.03 or 9.375% to $0.35 per share on low volume of 52,449 shares. ELY has formed a bullish triangle pattern and is only $0.015 away from its key breakout point of $0.365 per share. Click here to see for yourself!
Based on the height of ELY's triangle pattern as shown in NIA's exclusive technical chart, when ELY breaks out of the triangle by surpassing $0.365 per share, it is likely to rally to $0.595 per share within the following two weeks! ELY currently has the strongest technicals out of all gold stocks along with rapidly improving fundamentals! Last quarter, ELY had the strongest profit margin in the entire gold industry!
ELY generated record quarterly revenue of CAD$1.161 million and was extremely profitable with net income of CAD$506,300 and normalized net income of CAD$600,000. ELY's normalized net income margin of 51.68% was ranked #1 in the gold industry ahead of companies like: #2 ranked Kirkland Lake Gold (KL), #3 ranked Franco-Nevada (FNV), and #6 ranked Royal Gold (RGLD)! These are three of the best managed gold mining/royalty companies in the world and each have market caps today of between $8.128-$17.07 BILLION! It is absolutely insane that ELY last quarter had MUCH higher profit margins than all three of them! Click here to see for yourself!
ELY is undoubtedly the best managed small-cap gold royalty play in the world today with a CEO who understands Wall Street, banking, and finance much better than other CEOs in the gold industry. He is committed to raising shareholder value with a focus on keeping the share count low and NIA is extremely confident that new 52-week highs of above $0.47 per share are coming very soon!
Rick Rule comments PM royalties investment
Ely Gold Royalties Purchases Jerritt Canyon Production Royalty (TSXV: ELY) (OTCQB: ELYGF)
DGAP-News: Ely Gold Royalties Inc. / Key word(s): Miscellaneous
09.09.2019 / 12:33
The issuer is solely responsible for the content of this announcement.
Producing Royalty is Based on Mill Production on a Per Ton Basis
Increasing at Higher Gold Prices
Vancouver, British Columbia--(Newsfile Corp. - September 9, 2019) - Ely Gold Royalties Inc. (TSXV: ELY) (OTCQB: ELYGF), through its wholly owned subsidiary Nevada Select Royalty, Inc, has closed its previously announced purchase of 100% of all rights and interests in a Per Ton Royalty Interest on the Jerritt Canyon Processing Facilities (the "PTR") from an arms-length third party (the "Owner").
The Jerritt Canyon Operations, located in Elko Nevada are operated by Jerritt Canyon Gold LLC, a privately held company ("JCG"). The closing of the transaction was subject to certain conditions precedent, including approval of the transaction by the TSX-V. (See press release dated May 23, 2019)
The PTR was granted in an Amended License Agreement dated May 19, 2015, between former operator, Veris Gold Corp., JCG and the Owner (the "License Agreement"). Pursuant to the terms of the License Agreement, the Owner granted to JCG a perpetual license for the patent to certain proprietary scrubbing technology involved in the removal of mercury from gas that is currently being used at the Jerritt Canyon Processing Facilities. The License Agreement entitles the Owner to receive a Per Ton Royalty Payment (the "PTR Payment") based on overall throughput from mining operations at the Jerritt Canyon Processing Facilities with increasing PTR Payments at higher gold prices.
Royalties are calculated, in US$, as:
$0.15 per ton if the gold price is less than or equal to $1,300 per ounce; or
$0.225 per ton if the gold price is greater than $1,300 but less than or equal to $1,600 per ounce; or
$0.30 per ton if the gold price is greater than $1,600 but less than or equal to $2,000 per ounce; or
$0.40 per ton if the gold price is greater than $2,000 per ounce.
Trey Wasser, Ely Gold's President and CEO commented, "The acquisition of this producing royalty at Jerritt Canyon is another significant asset for our portfolio. The pricing structure of this Per Ton Royalty offers excellent leverage to gold prices, similar to a traditional mineral royalty. Based on current production, the July PTR Payment was US$16,516. At $2000 gold, this royalty has the potential to pay up to US$48,000 per month."
Since mining began at Jerritt Canyon, more than eight million ounces of gold have been produced. Gold was first discovered at Jerritt Canyon in 1972, with the first gold poured in 1981. Underground operations began in 1993. The mineral processing operation at Jerritt Canyon is one of only three gold processing plants in Nevada that uses roasting in its treatment of refractory ores. Jerritt Canyon is designed to process highly refractory gold ores up to 4,000 TPD and has processed in excess of 1.1 million tons in 2017 and 1.2 million tons in 2018. (1)
Under the terms of the transaction, Ely Gold paid total cash consideration of US$650,000:
US$300,000 cash at Closing; and
500,000 warrants at Closing. Each warrant will entitle the Owner to purchase one additional common share for a period of three (3) years at an exercise price of CAN$0.18.
And will make Deferred Payments as follows:
US$150,000 cash on the 1st anniversary of Closing;
US$150,000 cash on the 2nd anniversary of Closing; and
US$50,000 cash on the 3rd anniversary of Closing.
The Deferred Payments will accrue simple annual interest at 5% and be secured by the PTR. If production or PTR Payments cease at the Facility for two (2) consecutive months or greater, Deferred Payments will be delayed by an amount equal to the time the production is halted.
Stephen Kenwood, P. Geo, is a director of the Company and a Qualified Person as defined by NI 43-101. Mr. Kenwood has reviewed and approved the technical information in this press release. The Company does not intend to file a technical report supporting disclosure with respect to acquisition of this royalty interest.
(1) Source: Jerritt Canyon Gold LLC
About Ely Gold Royalties Inc.
Ely Gold Royalties Inc. is a Vancouver-based, emerging royalty company with development assets focused in Nevada and Quebec. Its current portfolio includes 33 Deeded Royalties and 20 properties optioned to third parties. Ely Gold's royalty portfolio includes producing royalties, fully-permitted mines and development projects that are at or near producing mines. The Company is actively seeking opportunities to purchase existing third-party royalties for its portfolio and all the Company's Option Properties are expected to produce royalties, if exercised. The royalty and option portfolios are currently generating significant revenue. Ely Gold is well positioned with its current portfolio of over 20 available properties to generate additional operating revenue through option and sale transactions. The Company has a proven track record of maximizing the value of its properties through claim consolidation and advancement using its extensive, proprietary data base. All portfolio properties are sold or optioned on a 100% basis, while the Company retains royalty interests. Management believes that due to the Company's ability to generate third-party royalty transactions, its successful strategy of organically creating royalties, its equity portfolio and its current low valuation, Ely Gold offers shareholders a low-risk leverage to the current price of gold and low-cost access to long-term mineral royalties.
On Behalf of the Board of Directors
Signed "Trey Wasser"
Trey Wasser, President & CEO
Ely Gold Royalties Inc. (ELYGF) .2359 Vancouver-based, emerging royalty company with over 70 assets focused in Nevada and Quebec. Its current portfolio includes 33 Deeded Royalties and 20 properties optioned to third parties. Ely Gold’s royalty portfolio includes producing royalties, fully permitted mines and development projects that are at or near producing mines.
New Capital Structure (Jan 2019)
• 11% Management and Insiders
• 25% Tightly held by long-term shareholders
• 10% Exploration Capital Partners (Sprott)
Corp. Presentation https://elygoldinc.com/assets/docs/presentations/ELY-PPT-AUGUST-2019-UPDATE-NEW4.pdf
Website: https://elygoldinc.com/
Pinksheets: https://web.tmxmoney.com/quote.php?qm_symbol=ELY
TSX: https://web.tmxmoney.com/quote.php?qm_symbol=ELY
IHUB: https://investorshub.advfn.com/Ely-Gold-Royalties-Inc-ELYGF-30177/
Ely Gold currently owns a 100% interest in over 20 highly prospective, primarily un-encumbered precious metals properties in Nevada. The majority of its properties are gold exploration projects located in some of the most prolific and desirable gold trends in Nevada. Ten of the properties, are located in the Walker Lane district of western Nevada and ten are located in the Cortez Trend. The balance of the properties are unique situations throughout Nevada and surrounding western states. https://elygoldinc.com/investors/about
$ELYGF
$ELYGF ~ Investor Presentation ~ July 2019 ://elygoldinc.com/assets/docs/presentations/2019-07-11-CP-ELY.pdf
It sure does Bud.
ELYGF
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Ely Gold Royalties Inc. is a North American emerging royalty company with producing and development assets focused in Nevada and the Western US. Its current portfolio includes a number of Deeded Royalties and Optioned Properties, which are currently generating revenue. All portfolio properties are sold or optioned on a 100% basis, while the Company retains royalty interests. All the Company’s Option Properties will produce royalties, if exercised.
Ely Gold’s royalty portfolio includes producing royalties, fully permitted mines, mines under construction and development projects that are being permitted for mine construction. The Company is currently purchasing third-party royalties to add to its portfolio.
The Company is well-positioned with its current portfolio of over 20 available properties to generate additional operating revenue through option and sale transactions. The Company has a proven track record of maximizing the value of its properties through claim consolidation and advancement using its extensive, proprietary data base.
Management believes that due to the Company’s ability to generate royalty transactions, its successful strategy of organically creating royalties, its equity portfolio and its current low valuation, Ely Gold offers shareholders a low-risk leverage to the current price of gold and low-cost access to long-term gold royalties.
https://elygoldinc.com/
Ely Gold Royalties Inc. has a unique business model designed to create value for investors without excessive dilution of its shareholders. Through its wholly owned subsidiary, Nevada Select Royalty, Inc., the Company is focused on developing recurring cash flow streams through the acquisition, consolidation, enhancement, and resale of highly prospective, un-encumbered North American precious metals properties. Ely Gold’s property development efforts maximize each property’s potential for acquisition, while reserving significant royalty interests. The Company’s experienced management team has a proven track record staking/acquiring properties, then developing the projects through claim consolidation and data compilation to provide its clients with fresh properties that have not see exploration in the current mining cycle. The properties are vended on a option or sale allowing the purchaser to own a 100% interest. The option and advance royalty payments provide growing cash flow streams. The Company also acquires equity interests in the shares of mid-tier gold producers in lieu of some cash payments. Ely Gold is also purchasing existing royalties from third parties. Its recent acquisition included three Nevada royalties and one Canadian property. All of our deeded royalty properties are currently being explored by established mining companies. As a property developer, Ely Gold continually carries on an exploration program to maximize property values while offering shareholders the blue-sky of a significant resource discovery.
This multi-level business plan is a significant improvement on the typical project generator/joint venture model. It allows the Company to maintain a large portfolio of properties and generate significant deal flow. Shareholder value is highly levered to the price of gold. As prices increase, we see growth in the value of our properties, the cash flow from our option portfolio, our equity investments in mid-tier/junior companies, a higher market valuation on our growing royalty portfolio and the blue sky of our exploration program.
Ely Gold currently owns a 100% interest in over 20 highly prospective, primarily un-encumbered precious metals properties in Nevada. The majority of its properties are gold exploration projects located in some of the most prolific and desirable gold trends in Nevada. Ten of the properties, are located in the Walker Lane district of western Nevada and ten are located in the Cortez Trend. The balance of the properties are unique situations throughout Nevada and surrounding western states.
Common Shares O/S: | 99,640,929 |
Total Shares Fully Diluted: | 127,225,583 |
Options: | 8,100,000 |
Warrants: | 19,664,654 |
Stock Price: | $0.38 |
Market Cap: | $36,527,000 |
Unrestricted Cash: | $3,200,000 |
Investments: | $900,000 |
Total Debt: | $650,000 |
Enteprise Value: | $33,977,000 |
TSX Venture Exchange: ELY.V
OTC Bulletin Board: ELYGF
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