EMX Royalty has announced the signing of an exploration and option agreement for its Yarrol, Mt Steadman, and Queensland Gold projects with Mila Resources.
Mila, listed on the London Stock Exchange, is seeking to expand its exploration portfolio in Australia. Under the terms of the agreement, EMX will receive a cash payment, warrants, and work commitments during an initial one-year option period.
Should Mila exercise the option, EMX will receive further cash payments, equity in Mila, advance royalty payments, milestone payments, and a 2.5% net smelter return (NSR) royalty.
Each of the projects is situated within the Tasman Orogenic Zone in eastern Australia, a region known for significant gold mines and deposits, including Cracow, Mount Morgan, and Mount Rawdon.
The Yarrol and Mt Steadman projects both feature historically defined gold resources, along with sites of past gold mining. The Yarrol project also includes areas with cobalt-enriched manganese oxide mineralisation and deposits of heavy mineral sands.
Located north of Yarrol and Mt Steadman, the Queensland Gold project contains multiple historic gold mines, gold occurrences, drill-defined gold mineralisation zones, and various additional geochemical anomalies enriched with gold and copper.
EMX anticipates collaborating with Mila to commence work on the projects and to advance recent drilling and sampling programmes.
This agreement represents another example of EMX’s business strategy, providing ready-to-explore projects to its partner companies in exchange for royalty interests and other considerations.
EMX will receive A$25,000 upon signing the agreement, along with 16 million purchase warrants for Mila Resources stock at a strike price of £0.01.
Mila can acquire a 100% interest in the project by fulfilling A$450,000 in work commitments by the first anniversary of the agreement.
Upon exercising the option, Mila will issue shares equivalent to £110,000 (with certain escalation clauses) and make an initial advance royalty payment equivalent to 20 ounces of gold, payable in cash, shares, or bullion.
Grant EMX an uncapped 2.5% net smelter return (NSR) royalty and begin annual advance royalty (AAR) payments starting at 20 ounces of gold until the fifth anniversary of the agreement, when AAR payments will increase to 35 ounces of gold until a Preliminary Economic Assessment is completed. At that point, AARs will increase to 50 ounces of gold, payable in cash, shares, or bullion.
On the second anniversary of the agreement, make an additional payment of AUD $125,000 to EMX in cash or shares and complete a JORC Code or NI-43-101 compliant resource estimate on at least one project area.
By the fifth anniversary, complete a cumulative total of 30,000 metres of drilling and/or define a resource of at least 400,000 ounces of gold, with at least 40% of these ounces classified as ‘indicated’ resources.
It will also provide certain milestone payments.
For each project, Mila may repurchase 1.25% of the EMX royalty by making a payment equal to 65% of the post-tax royalty net present value (NPV) as outlined in the feasibility study.
