Vancouver, British Columbia--(Newsfile Corp. - January 16, 2018) - EMX Royalty Corporation (TSXV: EMX) (NYSE American: EMX) (the "Company" or "EMX") is pleased to announce the execution of a definitive agreement (the "Agreement") for the sale of the Modum cobalt project (the "Project") in Norway to Boreal Metals Corp. ("Boreal") (TSX Venture: BMX). The Agreement provides EMX with additional share equity in Boreal, a 3% NSR royalty on the Project, and advance annual royalty payments. The Modum Project is located in southern Norway's Modum mining district, ~75 kilometers west of Oslo. The Project partially surrounds the historic Skuterud mine property, which was Europe's principal producer of cobalt from the late eighteenth through nineteenth centuries1. Please see www.emxroyalty.com for more information.
Commercial Terms Overview. Pursuant to the Agreement, Boreal will acquire 100% interest in the Project according to the following terms (all dollar amounts in USD):
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At closing, Boreal will issue to EMX 1,324,181 common shares of Boreal that will bring EMX's share of equity ownership in Boreal to 19.9%. EMX will have the right to participate pro-rata in future financings at its own cost to maintain its 19.9% interest in Boreal.
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At closing, EMX will transfer its Modum exploration licenses to Boreal.
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EMX will retain a 3% NSR royalty on the Project, of which 1% may be purchased by Boreal on or before the fifth anniversary of the closing date in 0.5% increments for a total of $2,500,000 in cash and common shares of Boreal stock.
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EMX will receive annual advance royalty ("AAR") payments, with an initial $20,000 payment, commencing on the second anniversary of the closing, with each subsequent AAR payment increasing by $5,000 per year until reaching $60,000 per year. Once reaching $60,000, AAR payments will be adjusted each year according to the Consumer Price Index (as published by the U.S. Department of Labor, Bureau of Labor Statistics).
The issuance of Boreal shares to EMX, as set forth in the Agreement, is subject to receipt of TSX Venture Exchange approval.
Project Overview. The Modum Project covers a propsective north-south trend of historic cobalt mines, prospects and occurrences of the historic Modum mining district. The district's cobalt mineralization was discovered in 1772. Historic production from open pits commenced in 1776, but mining moved underground in 1827 and continued through 1898. Historic production from the Skuterud mine is reported to have been approximately 1 million tonnes averaging 0.2% cobalt1.