The North American Gold Royalty Company

Jerritt Canyon PTR

Ely Gold has signed a binding letter of intent (the "Transaction") with a private individual ("the Owner") whereby Ely Gold will acquire 100% of all rights and interests to a Per Ton Royalty Interest on the Jerritt Canyon Processing Facilities (the " PTR Interest"). The Jerritt Canyon Operations, located in Elko Nevada, encompasses a number of underground operations, and are operated by Jerritt Canyon Gold LLC, a privately held company ("JCG").

The PTR Interest was granted in an Amended License Agreement dated May 19, 2015 between former operator, Veris Gold Corp., JCG (formerly WBVG LLC) and the Owner (the " License Agreement"). Pursuant to the terms of the License Agreement, the Owner granted to JCG a perpetual license for the patent to certain proprietary scrubbing technology involved in the removal of mercury from gas that is currently being used at the Jerritt Canyon Processing Facilities. The License Agreement entitles the Owner to receive a Per Ton Royalty Payment (the " PTR Payment") based on overall throughput from mining operations at the Jerritt Canyon Processing Facilities. As a production royalty, the source of the mill feed would include any contract that JCG would enter for toll milled ore. The term of the License Agreement is for a period ending on the earlier of the expiration of the Patent or the life of the Jerritt Canyon Mine.

The PTR Payment is based on the Average Realized Gold Price ("ARGP") which is derived by dividing Total Gold Revenue during the previous month by Gold Ounces Sold during the previous month, Royalties would be calculated, in US$, as:

  1. $0.15 per ton if the ARGP is less than or equal to $1,300 per ounce; or
  2. $0.225 per ton if the ARGP is greater than $1,300 but less than or equal to $1,600 per ounce; or
  3. $0.30 per ton if the ARGP is greater than $1,600 but less than or equal to $2,000 per ounce; or
  4. $0.40 per ton if the ARGP is greater than $2,000 per ounce.

Since mining began at Jerritt Canyon, more than eight million ounces of gold have been produced. Gold was first discovered at Jerritt Canyon in 1972, with the first gold poured in 1981. Underground operations began in 1993. The mineral processing operation at Jerritt Canyon is one of only three gold processing plants in Nevada that uses roasting in its treatment of refractory ores. Jerritt Canyon is designed to process highly refractory gold ores up to 4,000 TPD and has processed in excess of 1.1 million tons in 2017 and 1.2 million tons in 2018.