U.S. Gold sells interest in Maggie Creek Property for $2.75M

U.S. Gold (USAU) announced the execution on November 9 of a transaction related to the Maggie Creek Property among Nevada Gold Mines, Orogen Royalties, and U.S. Gold. Renaissance Exploration, a wholly-owned subsidiary of Orogen, and the company’s wholly-owned subsidiary, Orevada Metals, are parties to an Exploration Earn-In Agreement pursuant to which Orevada, by making certain payments and incurring certain exploration expenditures, has the right to earn at least a 50% interest and up to a 70% interest in the Maggie Creek Property, owned by RenEx, in Eureka County, Nevada. U.S. Gold caused Orevada to assign its interest in the Original Earn-In Agreement to NGM. Simultaneous with that assignment, NGM and RenEx entered into an agreement pursuant to which NGM can earn a 100% interest in the Maggie Creek Property. As consideration for the assignment of the Original Earn-In Agreement to NGM, U.S. Gold received an upfront cash payment of $2.75M dollars from NGM, and NGM agreed that if it exercises the NGM Option and acquires the Maggie Creek Property, it will grant to U.S. Gold a 0.5% Net Smelter Returns royalty on all gold and other recovered and saleable minerals from the Maggie Creek Property, pursuant to a separate royalty agreement between NGM and U.S. Gold. Under the U.S. Gold Royalty Agreement, NGM will have the right to buy back one-half of the U.S. Gold Royalty for a fixed price of $500K. In addition, the U.S. Gold Royalty Agreement will provide that U.S. Gold waives the first $800K of production royalty payments owed to it, regardless of whether NGM exercises its buy-back rights. Under the U.S. Gold Royalty Agreement, NGM will also have a right of first refusal to purchase the U.S. Gold Royalty if U.S. Gold decides to sell that royalty.