(TheNewswire)
Vancouver, BC – August 1, 2024 –TheNews w ire – GlobalStocks News – Sponsored by TRU Precious Metals. On July 30, 2024 TRUPrecious Metals (TSXV:TRU, OTCQB:TRUIF, FSE:706) announced that it has signed an option agreement withEldorado Gold (TSX:ELD, NYSE:EGO) .
Today Eldorado’s market cap is CAD $4.7 billion whileTRU’s market cap is CAD $5.7million, making Eldorado 800 X bigger by marketcap.
The agreement gives TRU access to the geologicalexpertise and financial resources of a major mining company, whileEldorado gains a foothold in the gold deposit-bearing Cape Ray –Valentine Lake Shear Zone in Central Newfoundland.
Eldorado can earn an 80% ownership interest in TRU’s Golden Rose Project by paying TRU $250,000/year for the next four years, andspending $7 million on exploration in the next five years.
Upon execution of the option, Eldorado will pay another$7 million to TRU, making the total value of the deal, $15,250,000 .
“Golden Rose is the marquee asset in Southwest Newfoundland,” TRUCEO Joel Freudman told Guy Bennett, CEO of Global Stocks News (GSN).“It has three important features: 1. high grade gold, 2. high gradecopper, 3. we are flanked between two major gold deposits.”
“Calibre Mining purchased one deposit earlier this year for $340million,” continued Freudman. “Calibre’s five-million-ounceValentine gold mine is currently under construction. They aretargeting annual output next year of 195,000 ounces on a 12-14 yearmine life. The asset on the other side of Golden Rose is a 600,000ounce gold deposit owned by AuMega Metals. We control all the landbetween these two deposits.”
“We are thrilled to partner with Eldorado to advance the Golden RoseProject,” stated Freudman in the July 30 2024 PR, “which weconsider a strong endorsement of the work completed since optioningthe initial land package from Altius Minerals in 2021.”
“Eldorado’s expenditures under the Option Agreement will accelerate the advancement of theproject’s gold and copper potential , while the cash paymentswill help fund TRU’s corporate overhead as we remain operator of theProject.”
The agreement anticipates that “TRU will initially act as operatorof the Golden Rose Project. A technical committee, comprised of threeEldorado representatives and two TRU representatives, will review workprograms, exploration expenditures and provide guidance onoperations.”
“Although TRU are the operators of the Golden Rose Project,”Freudman explained to GSN, “Eldorado will have input into the designand execution of the exploration programs through the technicalcommittee. Eldorado’s expertise and guidance are extremelyvaluable to us.”
The Option Agreement is subject to TRU’s receipt of certain permitsrequired to conduct Exploration Expenditures.
“About six weeks ago we filed for a trenching permit and a drillpermit,” confirmed Freudman. “We have the trench permit in handand expect to have the drill permit shortly.”
The Fraser Institute’s Investment Attractiveness Index combines thePolicy Perception Index (PPI) and results from the Best PracticesMineral Potential Index.
The 2023 Survey of Mining Companies , ranksNewfoundland & Labrador the 9 th most attractive global mining jurisdiction.
“Newfoundland is a Tier 1 mining jurisdiction,” Freudman told GSN.“We have access to a skilled labor force. A provincially maintainedhighway runs through the middle of the Golden Rose project. We canexplore year-round, including drilling through the winter. We’ve hadmeetings with the Newfoundland mining minister and his staff. Theyare informed, motivated and responsive to our corporate objectives.”
Upon Eldorado exercising the Option, TRU and Eldorado will negotiateand enter into a joint venture agreement.
If TRU’s interest in such joint venture is diluted below 10%, itsinterest would convert to a 2% net smelter returns royalty, of which1% would be re-purchasable by Eldorado for $5,000,000 at the time ofcommercial production.
On July 25, 2024, Eldorado reported Q2, 2024 Financials . Highlightsincluded 122,319 ounces of gold production, revenue of $297.1 millionand cash, cash equivalents and term deposits of $595.1 million.
The proposed option agreement with TRU is a relatively small item onEldorado’s 2024 global balance sheet. But ELD’s ongoingfinancial commitment to the Golden Rose project suggests that it seesa big future for this Newfoundland gold asset.
With Eldorado funding exploration, TRU should not have to raise moneyfor the foreseeable future to conduct exploration work. The optionagreement is non-dilutive for existing shareholders. In the lasteight months, TRU has been buying back shares to strengthen thestructure of the company.
TRU is a portfolio company of ResurgentCapital , a Canadian merchant bank providing venture capitalmarkets advisory services and proprietary financing.
The completion of the granting of the option is expected in the nextmonth.
Contact: guy.bennett@globalstocksnews.com
Disclaimer: TRU Precious Metals paid GSN $1,500 CND forthe creation of this content.
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