Veris Gold (VG-T) April 16, '14 has entered into a heads of agreement with Eric Sprott for the creation and sale of a 0.5-per-cent net smelter returns royalty for proceeds of $7.5-million (U.S.). Proceeds were delivered to Veris Gold at the date of closing, April 10, 2014.
The royalty applies to production of gold and silver from the company's Jerritt Canyon mines and processing plant, located in Elko county, Nevada. Jerritt Canyon is operated by Veris Gold USA Inc., a wholly owned subsidiary of the company. The company is currently targeting production of 160,000 to 180,000 ounces from Jerritt Canyon for 2014.
The company has the right, and in certain cases the obligation, to buy back the royalty for the purchase price plus a premium based on the price of gold and the sale price of another royalty to an arm's-length third party.
The above royalty agreement is part of an overall package currently being put together to deal with the financial restructuring of Veris's balance sheet. The restructuring package will include arrangements with Deutsche Bank, Small Mine Development, Concept Capital, Monument Mining and 683. |
