Nova Royalty Corp. (TSXV: NOVR) (OTCQB: NOVRF) has acquired a 0.25 per cent net smelter return (NSR) royalty from an arm’s length private party on the Tatogga Property in British Columbia, Canada.
The company said on Thursday that it would also be granted a right of first refusal for an extra 0.25 per cent NSR owned by the seller.
The agreed-upon aggregate purchase price for the transaction is $3.7 million. The payment will be $1 million in cash upon the closing of the transaction, followed by $2.7 million in shares.
The Tatogga Property also contains the Saddle North copper-gold-silver deposit, which is owned by Newmont Corporation (NYSE: NEM) (TSX: NGT).
The royalty is a component of a larger existing 2.00 per cent NSR on Tatogga. The seller holds exclusive legal and beneficial ownership of 50 per cent of the 2.00 per cent NSR, which means the seller possesses a 1.00 per cent NSR royalty on Tatogga.
Newmont has the right to buy back 50 per cent of the interest from the seller. If Newmont exercised this right, it would mean a reduction of the seller’s interest to a 0.50 per cent NSR on Tatogga.
“The Saddle North deposit has a significant copper-gold-silver resource and is situated in B.C.’s Golden Triangle, one of Canada’s premier mining camps,” said Hashim Ahmed, Nova’s interim CEO.
“Additionally, Tatogga is owned by Newmont, an industry-leading mining company with a proven track record of success. We view this Transaction as an accretive acquisition that improves both the quality and value of Nova’s portfolio.”
Royalty Area Map. Image via Nova Royalty Corp.
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The royalty pertains to the sale of all minerals extracted and sold from a collection of mining claims that encompass an approximate surface area of 36,700 hectares. These claims include the entirety of Tatogga and Saddle North.
Saddle North is a copper porphyry deposit abundant in gold, located in the Golden Triangle region of northwest British Columbia, Canada. GT Gold Corp published a maiden resource estimate in 2020, which came included in Newmont’s acquisition of the company in 2021.
The estimate included 1.81 billion pounds of copper, 3.47 million ounces of gold and 7.58 million ounces of silver in Indicated Resources, as well as 2.98 billion pounds of copper, 5.46 million ounces of gold and 11.64 million ounces of silver in Inferred Resources.
The mineralization at Saddle North extends further at depth and towards the northwest and southeast, leaving room for potential expansion. There is also exploration potential near the mine site, and the broader Tatogga property shows early indications of being a prospective district.
Additionally, the proximity of Saddle North and Red Chris presents opportunities for operational synergies and potential development, particularly if the proposed merger between Newmont and Newcrest Mining Limited (TSX: NCM) (ASX: NCM) is successfully finalized.
Nova Royalty shares rose by 3.2 per cent to $1.62 on Thursday on the TSX Venture Exchange.
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Golden Triangle represents significant potential value
The Tatogga property is located in the Stikine region of northwestern British Columbia, Canada, on the Klastline Plateau, within the area generally referred to as the “Golden Triangle”, approximately 14km west of the Red Chris copper-gold mine.
The term “Golden Triangle” refers to a 500 kilometers belt of mineralization that extends from Atlin in northern British Columbia, near the Yukon border, to Kitsault, southeast of Stewart, British Columbia.
This region has a historical association with molybdenum and silver production. The southern portion of the Golden Triangle, which is the reason behind its name, has been host to numerous mines that have produced minerals in the past, and there are several additional mines currently undergoing development to begin production in the future.
Skeena Resources Limited (TSX:SKE) (NYSE:SKE) released its updated mineral resource estimate for its Eskay Creek gold-silver project in the Golden Triangle earlier this month. The updated MRE incorporates an additional 278 drillholes totaling 67,885 metres, enhancements to the resource estimation methods, and updated metallurgical process recoveries.
South of Newmont’s Saddle property, Origen Resources Inc. (CSE: ORGN) (FSE: 4VXA) acquired the Wishbone property on Thursday, which is located next to a 11.3 billion pound copper, 9.3 million-ounce gold measured and indicated Galore Creek copper deposit, which is 10 kilometers west of Origen’s LGM property.
There’s also plenty of opportunity outside of British Columbia’s golden triangle as well. NevGold Corp. (TSX-V: NAU) (OTC: NAUFF) created a new BC-focused subsidiary at its Ptarmigan project in the southeast corner of the province. The new subsidiary, coupled with a the company’s recent acquisition of option projects from Eagle Plains Resources Ltd. (TSXV: EPL) will offer additional opportunities for shareholders of NevGold to explore promising ventures.
NevGold Corp is a sponsor of Mugglehead News coverage.
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