Ely Gold & Minerals′ Shareholders Approve Mt. Hamilton Joint Venture; Solitario Makes Second Private Placement into Ely
Solitario Exploration & Royalty Corp. ('Solitario;? NYSE Amex: XPL;
TSX: SLR) announced that Ely Gold & Minerals Inc. ('Ely;? TSX.V: ELY)
received shareholder approval and TSX-Venture Exchange acceptance for
the previously announced Letter of Intent ('LOI?) to joint venture Ely′s
Mt. Hamilton advanced gold project situated at the southern end of the
prolific Battle Mountain gold trend in eastern Nevada. Solitario may
earn up to an 80% interest in the project by completing various staged
commitments. In addition, Solitario has funded the second tranche
private placement in Ely of CDN$250,000 for units, described below. This
placement is part of a previously disclosed Letter of Intent between
Solitario and Ely signed on August 26, 2010.
Chris Herald, President and CEO, stated, 'With the approval of the LOI
by Ely′s shareholders, and the anticipated signing of a definitive joint
venture agreement in accordance with the terms of the LOI, we can now
focus on rapidly advancing this very attractive advanced stage gold
project. Within the next two weeks we intend to mobilize two drill rigs
to conduct additional deposit definition drilling on the Centennial
deposit, as well as several geotechnical and hydrologic holes required
for completion of a bankable feasibility study.?
Terms of the LOI
Solitario has funded the second $250,000 tranche for 1,666,666 units at
a price of CDN$0.15 per unit of the previously announced private
placement of 3,333,333 units of Ely, which brings the total aggregate
consideration for both tranches to CDN$500,000. Each unit consists of
one common share and one-half share purchase warrant entitling the
holder of a whole warrant to purchase an additional share of Ely for
CDN$0.25, with such warrant expiring two years from the subscription
date. Upon signing the LOI in late-August 2010, Solitario subscribed to
the first tranche of the agreed to two-stage financing under terms
identical to the second tranche. The shares received in this second
tranche will have a four-month hold period which will expire on February
21, 2011.
Solitario is committed to spend $1.0 million on exploration and
feasibility work and to pay US$300,000 in an advanced royalty payment as
part of the LOI. After completing these initial commitments, Solitario
may elect to terminate its interest in the Mt. Hamilton project at any
time and will have no further earn-in obligations on the project.
To earn its full 80% interest in the project and fulfill other LOI
commitments Solitario is further required to:
Make cash payments to the subsidiary of Ely which will hold Ely′s
joint venture interest totaling US$2.75 million in cash, issue 300,000
shares of Solitario common stock, and subscribe to US$2.50 million
worth of Ely common stock at market, all of which are scheduled from
2011 through mid-2015.
Make payments of US$300,000 per year in advanced royalty payments that
are deductible against future production royalties to the underlying
royalty owner, and prior to commercial production, pay $5.0 million to
reduce the NSR royalty rate from 8% to 3%.
Complete a bankable feasibility study.
Upon request, arrange 100% project financing for development of the
Mt. Hamilton project after completion of a bankable feasibility study.
Construction and permitting costs incurred after feasibility will be
shared pro-rata, however, Ely may elect to have Solitario fund all
costs with such costs, plus interest, to be repaid by the joint
venture to Solitario out of 80% of Ely′s share of net proceeds from
the joint venture.
For a more complete list of the terms and conditions under the LOI, a
copy of the LOI is available online at www.sedar.com,
www.solitarioxr.com
& www.elygoldandminerals.com
About Solitario
Solitario is a gold, silver, platinum-palladium, and base metal
exploration and royalty company actively exploring in Brazil, Mexico,
and Peru. Solitario has significant business relationships with
Votorantim Metais, Compañia de Minas Buenaventura S.A.A., Anglo
Platinum, and Newmont Mining. Solitario has approximately US$18 million
in net cash and marketable securities. Solitario is traded on the NYSE
Amex ('XPL') and on the Toronto Stock Exchange ('SLR'). Additional
information about Solitario is available online at www.solitarioxr.com
About Ely
Ely is focused on acquisition and development of gold resources in the
Americas. The Company is currently evaluating other near term production
assets with a partnership business model focused on cash flow. Ely is
traded on the TSX Venture Exchange ('ELY'). Additional information about
Ely is available online at: www.elygoldandminerals.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This press release includes certain 'Forward-Looking Statements'
within the meaning of section 21E of the United States Securities
Exchange Act of 1934, as amended. All statements, other than statements
of historical fact, included herein, including without limitation,
statements regarding potential mineralization and reserves, exploration
results and future plans and objectives of Solitario, are
forward-looking statements that involve various risks and uncertainties.
There can be no assurance that such statements will prove to be accurate
and actual results and future events could differ materially from those
anticipated in such statements. Development ofSolitario′s
properties are subject to the success of exploration, completion and
implementation of an economically viable mining plan, obtaining the
necessary permits and approvals from various regulatory authorities,
compliance with operating parameters established by such authorities and
political riskssuch as higher tax and royalty rates, foreign
ownership controls and our ability to finance in countries that may
become politically unstable. Important factors that could cause actual
results to differ materially from Solitario′s expectations are disclosed
under the heading 'Risk Factors' and elsewhere in Solitario′s documents
filed from time to time with Canadian Securities Commissions and the
United States Securities and Exchange Commission.
Solitario Exploration & Royalty Corp.
Debbie Mino-Austin,
800-229-6827
Director ? Investor Relations
Christopher E.
Herald, 303-534-1030
President & CEO
or
Ely Gold &
Minerals Inc.
Steve Kenwood, 604-488-1104
President
Trey
Wasser, 940-365-1314
EVP Corp Development