I’ve written about Lion One (LIO-V) probably a dozen times over the last couple of years. They are the only junior in the world with 100% ownership of a major alkaline gold system. Their Tuvatu gold project is located in Fiji on the Pacific Ring of Fire with multiple 20 million ounces high-grade gold mines on the same structure.
With a market cap of only about $171 million CAD the market seems to value the company for only their 2018 43-101 resource estimate of just over 720,000 ounces. But the company is about to be revalued in three different ways.
First of all, the resource does not reflect an accurate count of how much gold they have. The Tuvatu Gold project is similar in size to the Vatukoula Gold Mine in production since 1938 having shipped over seven million ounces of gold. Vatukoula is about 35 km from Tuvatu on the same structure. Vatukoula still reports about 3.8 million ounces in a resource.
These alkaline gold systems have an unusual form of gold. There will be hundreds of tiny fractures in the rock where flash gold has appeared. The veins may only be a couple of centimeters but are ultra-high grade. Since they vary widely in orientation it is not possible to get a representative assay of the real grade because there is no angle that you can drill that catches all of the tiny veins. Actually in one of the latest press releases the company changed how they sample assays of greater than 10 g/t gold to more accurately reflect the real grade.
What I’m trying to say is that in spite of having spent tens of millions of dollars in drilling, the company still does not know what an accurate grade is for the gold. But the good side of that issue is that no matter how you drill and sample it, you are always showing a lower grade than actually exists. Which means regardless of what they say they have for grade, production will in almost all cases show higher values for gold. It’s a good problem to have.
Lion One reported actually starting to mine in a May press release. The company has been predicting actual milling and gold production in the 4th quarter. Chief Operating Officer Patrick Hickey has been struggling to make the 4th quarter goal. He is so far ahead of schedule that there may be some “TRIAL” gold processing in the 3rd quarter, i.e. in a month.
In that May 18th press release there was a vital visual drawing of why grade control is always inaccurate. No matter how you drill, you miss veins. Here is an image from the press release.
The official first gold pour is scheduled for Fiji Day on October 10th in conjunction with a bunch of officials from the government who are thrilled to see a 2nd gold mine getting into production in Fiji. I know of no other jurisdiction where a junior company was able to go from exploration to production with greater support from the host country.
Lion One is on the sweet spot of valuation on the Lassonde Curve as the project begins production. That will give the stock a revaluation based on the risk has been removed from the stock.
The third part of the revaluation will be when gold and gold stocks start their next bull run. I see a general market crash between now and October. It could well take the metals and resource stocks with it. But when the dust settles, gold and gold stocks are going to be the only safe haven in town. The brilliant Bob Hoye is calling for October-November to be a good time to buy shares.
At startup the company is planning on production of 300 tonnes per day. The crushing circuit can do 1,000 TPD but for now the grinding circuit is limited to about 300 TPD. The company has already stockpiled over a two-month supply of material to mill. Plans are in progress to expand production to 500 TPD by September of 2024.
Guess estimates for grade are 6-7 g/t gold for the startup phase but COO Patrick Hickey has his fingers crossed and is hoping for 10 g/t gold. I think I have an understanding of the vein swarms and how they are always undercounted in assays. I’ll climb out on a limb and suggest that they will be doing 13-15 g/t gold a lot sooner than current investors understand.
I’ll make an important comment for investors to know here. I’ve been a small part of this story since Wally brought Quinton Hennigh on board in early 2019. Wally was making progress but it wasn’t visible. Quinton offered a lot of suggestions as to how and where to drill and what changes they needed to make in terms of personnel.
Quinton realized the company needed a professional team on site. He contacted two of the leading guys in mining, Patrick Hickey and Sergio Cattalani and convinced them to come on board. Prior to their entry management was being run out of Perth in Western Australia and frankly that just didn’t work. Investors should read the press release. I am triple impressed with both of them. I shared an hour-long update with Patrick last week. He has things totally under control. He’s the most impressive mine builder I have ever talked to.
Lion One is cashed up to production as a result of the last couple of private placements. Between standard warrants and broker warrants issued with prior placements, there are about 41 million outstanding warrants at prices between $0.77 and $1.49 dated for just over two years. As the warrants are exercised, it will bring in about $53 million. I don’t see cash being a problem for the company. There are about 15 million tradable warrants at $1.25 and I suspect they will add to the liquidity of the company since it allows investors to speculate on the price of the company with a degree of leverage. They expire in November of 2025.
I was in on a call with management of Lion One a week ago after I enquired as to the status of going into production. I was very impressed with the quality of the team and the direction the company is moving. I think the price will soon reflect the quality of management and high-grade of the ore. This should be one of the lowest cost producers in the industry. The government of Fiji is solidly supportive of the company and I see no problems on the horizon at any level.
Lion One has been my largest position for a couple of years now. The company is an advertiser and I couldn’t be more biased. Do your own due diligence.
Lion One Metals LIO-V $.84 (Aug 22, 2023) LOMLF OTCQX 206 million shares Lion One website
Ottawa, Ontario–(Newsfile Corp. – August 15, 2023) – Gold79 Mines Ltd. (TSXV: AUU) (OTCQB: AUSVF) (“Gold79” or the “Company”) announces that it has issued 2,062,548 common shares of the Company in connection with a US$48,000 ($63,283) share payment due under the option agreement covering a portion of the Company’s landholdings for the Gold Chain project in Arizona. The common shares issued have a statutory hold period until December 15, 2023.
About Gold79 Mines Ltd.
Gold79 Mines Ltd. is a TSX Venture listed company focused on building ounces in the Southwest USA. Gold79 holds 100% earn-in option to purchase agreements on three gold projects: the Jefferson Canyon Gold Project and the Tip Top Gold Project both located in Nevada, USA, and, the Gold Chain Project located in Arizona, USA. In addition, Gold79 holds a 32.3% interest in the Greyhound Project, Nunavut, Canada under JV by Agnico Eagle Mines Limited.
For further information regarding this press release contact:
This press release may contain forward looking statements that are made as of the date hereof and are based on current expectations, forecasts and assumptions which involve risks and uncertainties associated with our business including the uncertainty as to whether further exploration will result in the target(s) being delineated as a mineral resource, capital expenditures, operating costs, mineral resources, recovery rates, grades and prices, estimated goals, expansion and growth of the business and operations, plans and references to the Company’s future successes with its business and the economic environment in which the business operates. All such statements are made pursuant to the ‘safe harbour’ provisions of, and are intended to be forward-looking statements under, applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements as a number of factors could cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Company’s most recent annual MD&A and the Company’s continuous disclosure documents that can be found on SEDAR at www.sedar.com. Gold79 does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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North Vancouver, British Columbia–(Newsfile Corp. – May 18, 2023) – Lion One Metals Limited (TSXV: LIO) (OTCQX: LOMLF) (ASX: LLO) (“Lion One” or the “Company”) is pleased to announce that it has commenced mining on the URW1 lode at its 100% owned Tuvatu Alkaline Gold Project in Fiji.
Strike driving has reached the URW1 Lode and the first underground images of the lode have been received (Figure 1). The initial intersection of the lode revealed one primary vein and numerous stockwork style veins. Visible gold was observed in multiple locations on the face of the lode and within four different fracture orientations (Figure 2). Three of these fracture orientations are sub-parallel to the grade control drill axis and would therefore be difficult to identify given their orientation relative to the grade control drilling (Figure 3). A sample line was completed perpendicular to the main vein, and a grab sample was collected from the foot of the face.
Highlights of the initial face sampling on URW1 are as follows:
51.2 g/t Au over 0.56 m
117.48 g/t Au over 0.19 m
37.99 g/t Au over 0.19 m
58.68 g/t Au (grab sample)
Figure 1. URW1 face and select samples. Face of URW1. Red lines indicate the approximate locations and widths of select chip samples collected from the sample line, dashed red circle indicates the approximate location of the grab sample, and small red circles indicate the locations of visible gold on the face. Gold grades in g/t are indicated in yellow.
Figure 2. Visible gold. A), B), C) Close-ups of visible gold highlighted in Figure 1, with gold circled in red. Width of each image is approximately 10-15cm.
Figure 3. Fracture orientations vs orientation of grade control drilling. Grade control drilling (red arrow) is oriented perpendicular to the URW1 lode (blue rectangle). Shapes A, B, C, and D represent the approximate orientations of the gold bearing fractures within the URW1 lode. Orientations B, C, and D are sub-parallel to the axis of the bulk of the grade control drilling and are therefore difficult to identify. The approximate orientations of these fractures are as follows: A) sub-parallel to the main lode, B) striking E-W and dipping steeply to the south, C) striking E-W and subvertical dip, and D) sub-horizontal with variable dip directions.
Lion One Chairman and CEO Walter Berukoff commented: “We are excited to have started mining our second lode at the Tuvatu gold mine, especially so soon after we started mining our first lode. Without the diligence and hard work performed by our geology and engineering teams in Fiji we could not have located the lode as successfully and as accurately as we did.”
“We are extremely pleased with the amount of coarse-grained gold visible on the face of the lode, which is even more than was anticipated. Following our initial sampling of the face, and due to the presence of visible gold in multiple fracture orientations, we are optimistic that the overall grade of the URW1 lode could end up being even higher than what the grade control drilling has suggested. We continue to learn more about the Tuvatu system as we open the system up underground, and we are beginning to see how well-endowed the Tuvatu system truly is. Just like the discovery of the URA1 lode on our initial drive underground, the system continues to provide surprises to the upside as our underground developments progress.”
Figure 4. Location of URW1 Lode within Tuvatu. Plan view of the Tuvatu Main and West Zone deposits, with the URW1 Lode highlighted in blue. Underground developments are shown in red, and the other lodes within the Tuvatu Main and West Zones are shown in grey.
About Tuvatu The Tuvatu Alkaline Gold Project is located on the island of Viti Levu in Fiji. The January 2018 mineral resource for Tuvatu as disclosed in the technical report “Technical Report and Preliminary Economic Assessment for the Tuvatu Gold Project, Republic of Fiji,” dated September 25, 2020, and prepared by Mining Associates Pty Ltd of Brisbane Qld, comprises 1,007,000 tonnes indicated at 8.50 g/t Au (274,600 oz. Au) and 1,325,000 tonnes inferred at 9.0 g/t Au (384,000 oz. Au) at a cut-off grade of 3.0 g/t Au. The technical report is available on the Lion One website at www.liononemetals.com and on the SEDAR website at www.sedar.com.
Qualified Person In accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43- 101”), Sergio Cattalani, P.Geo, Senior Vice President Exploration, is the Qualified Person for the Company and has reviewed and is responsible for the technical and scientific content of this news release.
QAQC Procedures Lion One adheres to rigorous QAQC procedures above and beyond basic regulatory guidelines in conducting its sampling, drilling, testing, and analyses. The Company utilizes its own fleet of diamond drill rigs, using PQ, HQ and NQ sized drill core rods. Drill core is logged and split by Lion One personnel on site. Samples are delivered to and analyzed at the Company’s geochemical and metallurgical laboratory in Fiji. Duplicates of all samples with grades above 0.5 g/t Au are both re-assayed at Lion One’s lab and delivered to ALS Global Laboratories in Australia (ALS) for check assay determinations. All samples for all high-grade intercepts are sent to ALS for check assays. All samples are pulverized to 85% passing through 75 microns. Gold analysis is carried out using fire assay with an AA finish. Samples that have returned grades greater than 10.00 g/t Au are then re-analyzed by gravimetric method. For samples that return greater than 0.50 g/t Au, repeat fire assay runs are carried out and repeated until a result is obtained that is within 10% of the original fire assay run. Lion One’s laboratory can also assay for a range of 71 other elements through Inductively Coupled Plasma Optical Emission Spectrometry (ICP-OES), but currently focuses on a suite of 9 important pathfinder elements. All duplicate anomalous samples are sent to ALS labs in Townsville QLD and are analyzed by the same methods (Au-AA26, and Au-GRA22 where applicable). ALS also analyses 33 pathfinder elements by HF-HNO3-HClO4 acid digestion, HCl leach and ICP-AES (method ME-ICP61).
About Lion One Metals Limited Lion One’s flagship asset is 100% owned, fully permitted high grade Tuvatu Alkaline Gold Project, located on the island of Viti Levu in Fiji. Lion One envisions a low-cost high-grade underground gold mining operation at Tuvatu coupled with exciting exploration upside inside its tenements covering the entire Navilawa Caldera, an underexplored yet highly prospective 7km diameter alkaline gold system. Lion One’s CEO Walter Berukoff leads an experienced team of explorers and mine builders and has owned or operated over 20 mines in 7 countries. As the founder and former CEO of Miramar Mines, Northern Orion, and La Mancha Resources, Walter is credited with building over $3 billion of value for shareholders.
On behalf of the Board of Directors of Lion One Metals Limited “Walter Berukoff“, Chairman and CEO
Neither the TSX Venture Exchange nor its Regulation Service Provider accepts responsibility for the adequacy or accuracy of this release
This press release may contain statements that may be deemed to be “forward-looking statements” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “proposed”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information reflects Lion One Metals Limited’s current beliefs and is based on information currently available to Lion One Metals Limited and on assumptions Lion One Metals Limited believes are reasonable. These assumptions include, but are not limited to, the actual results of exploration projects being equivalent to or better than estimated results in technical reports, assessment reports, and other geological reports or prior exploration results. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Lion One Metals Limited or its subsidiaries to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: the stage development of Lion One Metals Limited, general business, economic, competitive, political and social uncertainties; the actual results of current research and development or operational activities; competition; uncertainty as to patent applications and intellectual property rights; product liability and lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting mining, timing and availability of external financing on acceptable terms; not realizing on the potential benefits of technology; conclusions of economic evaluations; and lack of qualified, skilled labour or loss of key individuals. Although Lion One Metals Limited has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Lion One Metals Limited does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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Vancouver, British Columbia–(Newsfile Corp. – March 28, 2023) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the “Company” or “EMX”) – is pleased to announce the filing of its 2022 annual report Form 40-F, which includes the audited financial statements for the year ended December 31, 2022, with the U.S. Securities and Exchange Commission (“SEC”) on EDGAR (www.sec.gov). EMX has also filed its Annual Information Form (AIF), audited Financial Statements (FS), and Management’s Discussion and Analysis (MD&A) for 2022 with Canadian securities regulators on SEDAR (www.sedar.com). The Company’s Form 40-F, AIF, audited FS, and MD&A are also available on EMX’s website at www.EMXroyalty.com under the heading “Investors”. Shareholders may receive a printed copy of the Company’s complete Financial Statements, or its complete Annual Information Form, free of charge, upon request to the Corporate Secretary at Suite 501 – 543 Granville Street, Vancouver, British Columbia V6C 1X8, Canada. All dollar amounts in this news release are USD unless otherwise noted.
HIGHLIGHTS
Financial Updates for the Year Ended December 31, 2022
Revenue and other income for the year ended December 31, 2022 was $18,277,000 (2021 – $7,526,000). Adjusted revenue and other income1 of $25,403,000 (2021 – $11,044,000) included $7,126,000 (2021 – $3,518,000) in income for the Company’s share of royalty revenue from the Caserones Mine (effective) royalty interest in Chile.
Net income for the year ended December 31, 2022 was $3,349,000 (2021 – loss of $23,731,000).
Operating cash flow for the year ended December 31, 2022 was $16,729,000 (2021 – cash used of $8,062,000). Adjusted operating cash flow1 from operations for the year ended December 31, 2022 was $21,953,000 (2021 – cash used of $6,356,000).
As at December 31, 2022, EMX had cash and cash equivalents of $15,508,000 (December 31, 2021 – $19,861,000), investments, long-term investments and loans receivable valued at $14,561,000 (December 31, 2021 – $18,170,000) and loans payable of $40,489,000 (December 31, 2021 – $50,733,000).
Corporate Updates
Timok Dispute Update On January 27, 2022 the Company announced that it had suspended the filing of a Notice of Arbitration to Zijin Mining Group Ltd (“Zijin”) regarding its royalty agreement covering the Timok project in Serbia, which includes the producing Cukaru Peki copper and gold mine. This suspension followed EMX’s previous announcement of its intention to file the Notice of Arbitration to formally dispute the royalty rate as defined under the Royalty Agreement (see EMX news release dated December 17, 2021). Discussions with Zijin have since proved amicable and productive. Both companies are expecting to execute a modified royalty agreement in 2023.
Settlement of the Bullion Litigation The Company’s wholly owned subsidiary, Bullion Monarch Mining, Inc. (“Bullion”), reached a settlement with Barrick Gold Corporation (“Barrick”) and Barrick affiliates and subsidiaries (“Barrick Entities”) with respect to Bullion’s claim of non-payment of royalties by the Barrick Entities to Bullion on production from properties in the Carlin Trend, Nevada. Bullion initiated litigation in 2008, before EMX acquired Bullion in 2012. Pursuant to the settlement, Barrick paid Bullion $25,000,000. Of the $25,000,000 settlement, $6,175,000 was paid as a fee to Bullion’s Reno, Nevada lawyers. The settlement of the lawsuit did not affect our 1% gross smelter return royalty from portions of Nevada Gold Mine’s Leeville, Carlin East, Four Corners, and other northern Carlin Trend underground gold mining operations (the “Leeville Royalty”), which continue to be paid.
Acquisition of Additional Royalty Interest on Caserones EMX acquired an additional (effective) 0.3155% Net Smelter Return (“NSR”) royalty on the Caserones Copper-Molybdenum Mine located in northern Chile for $25,742,000. When combined with EMX’s (effective) 0.418% NSR interest acquired in August 2021 (see EMX news release dated August 17, 2021), EMX’s new total totals to an (effective) 0.7335% NSR royalty interest.
Subsequent to the year ended December 31, 2022, the Company entered into certain agreements to acquire an additional 2.263% ownership in the underlying royalty holder, Sociedad Legal Minera California Una de la Sierra Peña Negra (“SLM”), for cash consideration of $3,517,000 pursuant to agreements with existing shareholders of SLM. The acquisition provides EMX with a further 0.0424% (effective) NSR interest in the Caserones property, increasing the Company’s NSR royalty interest to 0.7759%.
Acquisition of Royalty Portfolio from Nevada Exploration EMX executed a purchase and sale agreement (the “Agreement”) for a portfolio of royalties with Pediment Gold LLC, a wholly owned subsidiary of Nevada Exploration Inc. (“NGE”), for $500,000 (see EMX news release dated September 2, 2022). The portfolio consists of a 2% NSR royalty on NGE’s Nevada gold exploration portfolio covering ~62.5 square miles and includes four district-scale land positions, as well as certain other interests. In addition, if NGE options, farms out, or sells a project, then beginning on the first anniversary of the third-party agreement, EMX will receive advanced annual royalties of $20,000 that escalate $10,000 per year and are capped at $50,000. NGE has the right to buy back half of EMX’s 2% NSR royalty by purchasing a 0.5% NSR interest for $1,000,000 any time prior to the 7th anniversary of the Agreement and then, if the first NSR interest has been purchased, may purchase the second 0.5% NSR interest any time prior to production for $1,500,000.
Appointment of Independent Director EMX announced that Mr. Geoff Smith was appointed to the Board of Directors of the Company effective July 5, 2022. Mr. Smith brings to the board the benefit of 17 years of M&A and corporate finance experience having advised on or financed many of the largest, most complex and innovative streaming transactions in the past 10 years.
Royalty and Royalty Generation Updates In 2022, the Company’s royalty generation business was active in North America, South America, Europe, Turkey, Australia and Morocco. The Company spent $17,512,000 on royalty generation costs and recovered $8,577,000 from partners. Royalty generation costs include exploration related activities, technical services, project marketing, land and legal costs, as well as third party due diligence for acquisitions. During the year the Company also completed 10 partnerships across the portfolio while continuing to replace partnered properties with new royalty generation projects. In addition, our partners directly spent approximately $31,996,000 in exploration on the portfolio.
Producing Royalties
6
Advanced Royalties
11
Exploration Royalties
155
Royalty Generation Properties
96
Figure 1. EMX’s royalty and mineral property portfolio.
Initial production royalty payments were received from the Company’s Gediktepe oxide gold (silver) Royalty Property and Balya North polymetallic Royalty Property in Turkey (see respective EMX news releases dated September 9, and September 15, 2022). From Gediktepe EMX recognized $3,709,000 in royalty revenue and $4,000,000 in deferred milestone payments which will be paid in Q2 2023. EMX earned $276,000 from the Balya North Royalty Property in 2022.
EMX received a $3,000,000 milestone payment from Arizona Sonoran Copper Company, Inc. (“ASCU”) based upon declared resources totaling 200 million pounds or more of contained copper covered by the Company’s Parks-Salyer Royalty Property. ASCU’s maiden resource for its Parks-Salyer project, which is partially covered by EMX’s Royalty Property, was reported as total inferred underground resources of 143.6 million tons averaging 1.015% (total) copper and containing 2,915 million pounds of copper as oxide, enriched, and primary mineralization at variable cutoffs (see ASCU news release dated September 28, 2022). The Company retains a 1.5% NSR royalty covering the Parks-Salyer Royalty Property.
In the US, the Company added to its growing royalty portfolio with the completion of five new royalty agreements, the advancement of more than twenty-five partner-funded work programs, including nine drill projects, the acquisition of four large royalty positions from Nevada Exploration covering key land positions in Nevada, and new generative work leading to the acquisition of a district-wide land position at Tonopah, Nevada as well as a large (approximately 1,890 hectares), prospective land position in the Silver Valley district in Idaho. For the year, partners spent more than $18,000,000 on EMX’s early-stage US portfolio.
EMX’s Regional Strategic Alliance (“RSA”) with South32 Limited (“South32”) concluded in Q4 2022 after four years of generative exploration and project work. The Company is now following up on eleven priority projects identified by the RSA and retained by South32 for additional work, including an ongoing drill program at the Copper Springs porphyry copper project in Arizona’s Globe-Miami district.
In Canada, EMX programs advanced available properties in the portfolio as partners conducted multiple field programs, including drill programs on optioned and EMX royalty properties. EMX received C$577,000 in cash payments and C$52,000 in share equity payments during the year, while partners spent more than $3,700,000 in exploration expenditures advancing the portfolio.
EMX’s Latin American royalty portfolio advanced through field programs by Austral Gold Limited (at Morros Blancos and Morros Colorado), Pampa Metals Corporation (Block 4), and drill programs conducted by AbraSilver Resource Corp. (Diablillos), Aftermath Silver Ltd (Berenguela), and GR Silver Mining Ltd (San Marcial). In particular, the drill programs continued to produce significant results that expanded known resources and added new discoveries at nearby targets.
AbraSilver Resource Corp. (“AbraSilver”) announced an updated, open pit constrained mineral resource estimate for the Diablillos project’s Oculto deposit that included measured and indicated resources of 51.3 Mtonnes averaging 66 g/t silver (109 Moz contained Ag) and 0.79 g/t gold (1.3 Moz contained Au), as well as inferred resources of 2.2 Mtonnes averaging 30 g/t silver (2.1 Moz contained Ag) and 0.51 g/t gold (37 Koz contained Au) (see AbraSilver news release dated November 3, 2022). The updated resource was based upon drilling through Phase II. The ongoing Phase III drill program is designed to delineate a maiden resource estimate for the high-grade JAC zone discovery (see AbraSilver news release dated February 21, 2023).
In Northern Europe, the Company continued to develop its portfolio of projects, acquiring new gold and battery metals (nickel, copper and cobalt) royalty generation projects totaling nearly 175,000 hectares, and partnering four available properties. EMX also assisted with multiple partner-funded exploration and drilling programs. Overall, approximately $6,700,000 was spent by partners on EMX’s exploration royalty properties in Northern Europe during 2022.
Royalty generation programs proceeded in the Balkans and in Morocco, where multiple exploration license applications have been filed by the Company. New target areas are being assessed for further acquisitions.
Financing Updates
Sprott Credit Facility The Company entered into a credit facility in 2021 with Sprott Private Resource Lending II (Collector), LP (“Sprott”) totaling $44,000,000 (the “Credit Facility”). On January 24, 2022, the Company signed a credit agreement modification extending the maturity date to December 31, 2024. In connection with the extension, an additional 1.50% of the principal ($660,000) was added to the principal balance as at January 24, 2022.
Private Placement with Franco-Nevada The Company completed a $10,000,000 private placement with Franco-Nevada Corporation (“Franco-Nevada”). The proceeds were used to acquire the additional (effective) 0.3155% NSR royalty on the Caserones open pit mine in northern Chile (see EMX’s news release dated April 14, 2022).
Franco-Nevada purchased 3,812,121 units at C$3.30 per unit. Each unit consisted of one common share of EMX and one warrant to purchase one common share of EMX for C$4.45 exercisable until April 14, 2027. Franco-Nevada now owns approximately 3.5% of the issued and outstanding shares of EMX on an undiluted basis.
Repayment of Vendor Take Back Note The Company repaid in full the vendor take back note issued to SSR Mining Inc. totaling $8,319,000 including interest owed.
Exercise of Stock Options granted by EMX 1,110,000 stock options were exercised pursuant to the Company’s Stock Option Plan, which generated proceeds of $1,037,000 to EMX.
Investment Updates As at December 31, 2022, the Company had marketable securities of $9,970,000 (December 31, 2021 – $7,409,000), and $4,591,000 (December 31, 2021 – $8,761,000) in private investments. The Company will continue to generate cash flow by selling certain of its investments when appropriate. Much of the investment portfolio was derived from strategic investments, including Premium Nickel Resources Corporation (“PNR”), and royalty deals completed as part of our organic royalty generation business.
Strategic Investment in Premium Nickel Resources From 2020 through 2022, EMX acquired 5,412,702 shares of PNR, a private company with nickel-copper-cobalt assets in Botswana. On April 26, 2022, PNR announced the execution of a definitive agreement for a reverse takeover transaction (“RTO”) with North American Nickel Inc. (“NAN”) to create a new reporting entity, Premium Nickel Resources Ltd (“PNRL”). PNRL began trading on the TSX Venture Exchange in Q3 of 2022, having completed the RTO process with NAN. As a result of the RTO transaction, EMX’s interests were converted to 5,704,987 shares of PNRL, which represents roughly 5% of the issued and outstanding shares of PNRL.
OUTLOOK
The 2023 year will continue to see revenue and other income coming from our cash flowing royalties, including Leeville in Nevada, Gediktepe in Turkey, potentially Timok in Serbia (pending conclusion of discussions with Zijin), and our effective royalty interest on Caserones in Chile. As in previous years, production royalties will continue to be complemented by option, advance royalty, and other pre-production payments from partnered projects across the global asset portfolio. As a royalty holder, the Company has limited, if any, access to information on properties for which it holds royalties. Additionally, the Company may receive information from the owners and operators of the properties, which the Company is not permitted to disclose to the public pursuant to the underlying agreement or the information is not NI 43-101 compliant. Accordingly, the Company has not, and does not anticipate that it will have the ability to, provide guidance or outlook as to future production.
The Company will continue to strengthen its balance sheet over the course of the year by looking to retire portions of our long-term debt, continuing to evaluate equity markets, and the ongoing monetization of the Company’s marketable securities.
EMX is well positioned to identify and pursue new royalty and investment opportunities, while further filling a pipeline of royalty generation properties that provide opportunities for additional cash flow, as well as exploration, development, and production success.
Qualified Person. Michael P. Sheehan, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified, and approved the above technical disclosure on North America and Latin America. Eric P. Jensen, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified, and approved the above technical disclosure on Europe, Turkey, Australia, and Strategic Investments.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and TSX Venture Exchange under the symbol “EMX”, and also trade on the Frankfurt exchange under the symbol “6E9”. Please see www.EMXroyalty.com for more information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
Forward-Looking Statements This news release may contain “forward looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the year ended December 31, 2022 (the “MD&A”), and themost recently filed Annual Information Form (“AIF”) for the year ended December 31, 2022, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
1 Adjusted revenue and other income and adjusted cash provided by (used in) operating activities are non-IFRS financial measures with no standardized meaning under IFRS and might not be comparable to similar financial measures disclosed by other issuers. Refer to the “Non-IFRS financial measures” section of the Company’s annual MD&A for the year ended December 31, 2022 for more information on each non-IFRS financial measure.
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