The Toronto-based company has entered a second deal with Ely Gold Royalties that McEwen says consolidates the Gold Bar district for the first time in 20 years.
McEwen has signed a definitive all-scrip agreement to acquire 12 patented mining claims and 310 unpatented mining claims referred to as the Old Gold Bar project.
Historical records indicate the claims, which host an old mine and mill, produced 286,354oz gold between 1986-1994. The Millsite deposit was thought to be a faulted offset of the former Gold Bar mine.The claims were last explored under option from Ely by Fremont Gold in 2017, which completed a soil sampling programme to the southeast of the historic Gold Bar mine.
Fremont had drilled two reverse-circulation drill holes at Gold Bar totaling 492m which returned 25.9m grading 4.66g/t within a longer interval of 41.2m grading 3.08g/t at the Millsite deposit, and 6.1m grading 1.22g/t immediately west of the former openpit.
Fremont terminated its Gold Bar option in July this year.
Under terms of the deal, McEwen will issue to Ely 53,600 shares and reimburse $38,000 for the 2020 claim fees and taxes.
True to its business model, Ely vended the project from its well-stocked cupboard of Nevada-focused exploration plays close to a producing mine but kept a 2% net smelter return royalty on both the patented and unpatented claims. McEwen has the right to buy down 1% of the patented claims NSR for $1 million, and a further 1% NSR on the unpatented claims for $2 million.
Including this transaction, Ely now has three royalties on McEwen's Gold bar complex after recently closing a deal with McEwen and Fremont on the Gold Canyon option and buying the Scoonover royalty from a third party.
McEwen declared commercial production at its Gold Bar project in May following a rough and delayed start up.
Gold Bar's guidance for 2019, its first year of production, is in the range of 30,000-33,000oz gold, at all-in sustaining costs of $975/oz. For 2020, Gold Bar is forecast to produce 65,000-70,000oz.
