The North American Gold Royalty Company

Isabella Pearl Property

0.75% GRR Royalty

LOCATION Mineral County, Nevada
OPERATOR Gold Resource Corporation
MINERALS Au, Ag /open pit
ROYALTY GRR (Gross Revenue Royalty) 0.75%
STATUS Production
REVENUE 2019

Isabella Pearl, located on Nevada’s Walker Lane gold belt, began production in April 2019, only ten months after breaking ground. Commercial production began in October 2019. The .75% GRR was purchased from a third party in May 2019 for cash consideration of US$300,000. (See May 2, 2019 News Release.)

Overview — a Growing Asset

Ely Gold Royalties acquired the Isabella Pearl royalty in October of 2018. This purchase marks the fifth transaction the Company has completed in concert with Gold Resource Corporation’s (GORO) consolidation of its Nevada Mining Unit, encompassing over 10,100 hectares (25,000 acres) of development and exploration lands along Nevada’s south-central Walker Lane mineral belt. The remaining three properties of the Unit—County Line, Mina Gold and East Camp Douglas—are in various stages of exploration.

Additional Royalties

Total Ely Gold property sales to GORO of US $1,500,000 have created the following royalty structure:

2.5% NSR (Net Smelter Return) on the exploration ground at Isabella Pearl Extension;
2.5% NSR at County Line;
2-3% NSR at Mina Gold; and
2% NSR on certain claims at Camp Douglas (known as Silver Dyke Claims).

Reserves,Grades and Operations

Isabella Pearl contains Proven and Probable reserves estimated at 2,934,400 tonnes grading 2.28 grams per tonne, which equates to 214,800 gold ounces. Future production development anticipates two adjacent open pits with the Isabella pit averaging approximately 1 gram per tonne gold with mineral outcropping at the surface, and the Pearl pit averaging approximately 3.7 grams per tonne gold with a higher-grade core averaging nearly 5 grams per tonne gold. The project estimates an average 5:1 strip ratio with metallurgical tests estimating gold recoveries for crushed oxide rock of 81% and run of mine ore (ROM) of 60% using conventional heap leaching. Small amounts of silver are expected in recoveries, which would be treated as by-product credits against gold production costs.

Looking Ahead

As Isabella Pearl is fully developed and other satellite properties are fully explored, Ely Gold’s royalty interests are expected to become significant income-producing assets.

Isabella Pearl Extension

2.5% NSR Royalty

LOCATION Mineral County, Nevada
OPERATOR Gold Resource Corporation
MINERALS Au, Ag
ROYALTY 2.5%
STATUS Exploration drilling

Gold Resource Corporation controls over 10 kilometers of mineralized trend in Isabella Pearl area along the Walker Lane Mineral Belt.

Overview

Exploration and drilling has begun on Gold Resources’ Isabella Pearl Extension, on which Ely Gold has 2.5% NSR. This property is adjacent to the current operations, extends for six miles and has several drill ready targets.

Significant exploration upside exists at Isabella Pearl to the northwest along a geologic trend containing mineralized outcrops and historic mine workings.

County Line

2.5% NSR Royalty

LOCATION Mineral and Nye counties, Nevada
OPERATOR Gold Resource Corporation
MINERALS Au, Ag
ROYALTY 2.5%
STATUS Development trenching

The County Line property is part of the Paradise Peak collection cluster of high sulfidation epithermal deposits. This district historically produced a total of 1.5 million ounces of gold and 38.9 million ounces of silver.

Overview

The County Line property covers an area of approximately 2,401 acres consisting of 116 unpatented lode mining claims and 6 unpatented placer mining. The property is located within close proximity, approximately 14 miles northeast, of the Isabella Pearl Project.

The County Line open pit historically produced approximately 81,000 ounces of gold and 760,000 ounces silver. The Porphyry (East) Pit, located approximately 2,500 feet south east of the County Line pit, produced approximately 7,400 ounces of gold and 8,000 ounces silver. While both open pits represent exploration targets, other targets include "Newman Ridge" and the "Jackpot Zone.”

Mina Gold

2-3% NSR Royalty

LOCATION Mineral County, Nevada
OPERATOR Gold Resource Corporation
MINERALS Au, Ag
ROYALTY 3%
STATUS Exploration drilling

Drilling to date at Mina Gold has targeted expansion to depth of known surface high-grade gold mineralization, including five condemnation holes for a proposed heap leach site.

Overview

The property covers an area of approximately 1,328 acres consisting of 89 unpatented claims and 5 patented claims. Drill highlights include 15.24 meters grading 3.34 g/t gold from surface, 12.19 meters grading 2.98 g/t gold from 6.1 meters downhole, and 19.81 meters grading 1.47 g/t gold from 3.05 meters downhole. The property is located within close proximity, approximately 15 miles northeast, of the Isabella Pearl Project.

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