Terraco Gold Acquires Royalty Option on Spring Valley Gold Deposit and a US$5,000,000 Cash Infusion

- December 21st, 2011

Terraco Gold Corp. (TSXV:TEN) has entered into a tripartite transaction whereby Terraco will have the option to acquire an interest in a net smelter returns royalty (NSR) on part of the Spring Valley Gold Project, located in Pershing County, Nevada.

Terraco Gold Corp. (TSXV:TEN) has entered into a tripartite transaction whereby Terraco will have the option to acquire an interest in a net smelter returns royalty (NSR) on part of the Spring Valley Gold Project, located in Pershing County, Nevada.

As quoted in the press release:

Under the terms of the transaction between Terraco, the current royalty owner (“Royalty Vendor”), and a third party investor (“Strategic Investor”), the Strategic Investor will acquire 5/7ths of the sliding scale NSR (the “Purchased NSR Interest”) (see Note 1) held by the Royalty Vendor.  The Purchased NSR Interest represents 5% of net smelter returns when gold prices exceed US$700 per ounce and on production greater than 500,000 ounces of gold from the claims covered by the Royalty Vendor’s NSR.  The Strategic Investor will pay US$20,000,000 to the Royalty Vendor and US$5,000,000 to Terraco.  As part of the transaction, Terraco will retain an option to acquire, for US$12,500,000, one-half of the Purchased NSR Interest from the Strategic Investor for a period of 5 years from the closing of this transaction or within 1 year of a change of control of Terraco.  Terraco will also issue 4,000,000 shares to the Royalty Vendor for a right of first refusal on all or part of a separate 1% area of interest royalty owned by the Royalty Vendor, also located on the Spring Valley Project.

Click here to read the Terraco Gold (TSXV:TEN) press release

See this press release on Marketwire
Click here to see the Terraco Gold (TSXV:TEN) profile.

Leave a Reply