Pilot Gold Inc. (TSX: PLG) (?Pilot Gold? or the ?Company?) has signed and closed a definitive purchase agreement (the ?Agreement?) to sell 100% of its Regent exploration property (?Regent?, or the ?Property?) to Rawhide Mining LLC (?RMC?) for $3 million in cash.
Pilot Gold will retain a net profits royalty of 15% on the Property and is entitled to a sliding scale gold equivalent bonus payment (the ?Gold Bonus?), each of which is payable in certain circumstances after RMC has achieved production at the Property.
"Regent?s divestiture allows the Company to add to its strong cash position while the royalty potentially offers exposure to production for Pilot Gold, as RMC intends to integrate Regent into its existing mining operations,? said Matt Lennox-King, President and CEO, Pilot Gold.
Non-refundable payments to Pilot Gold of $2 million received at closing and $1 million payable six months following closing
15% royalty on net profits from Regent after RMC recovers its upfront cash payments to Pilot Gold and its development costs to take Regent to production
A Gold Bonus for any gold-equivalent ounces from Regent placed on the RMC leach pad in excess of 115,000 ounces based on:
|Gold price/oz||Gold Bonus price/oz|
|$1,800 or more||$29.050|
|$1,700 to $1,800||$23.275|
|$1,600 to $1,700||$17.500|
|$1,500 to $1,600||$11.550|
|$1,400 to $1,500||
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