Prophecy Granted Right to Buy Out Nevada Gibellini Vanadium Claims
Date:Apr 25, 2018
April 23, 2018 (Source) — Prophecy Development Corp. (“Prophecy” or the “Company”) (TSX:PCY, OTCQX:PRPCF, Frankfurt:1P2N) announces an amendment to the Gibellini mineral lease agreement dated June 22, 2017 (the “MLA”), whereby Prophecy has been granted the right to cause the current holder (the “Lessor”) of the Gibellini mineral claims (which Prophecy is currently leasing) to transfer their title to the claims to Prophecy.
Mineral Lease Agreement Background:
Under the MLA, Prophecy agreed to pay the Lessor, annual advance royalty payments which will be tied, based on an agreed formula (not to exceed US$120,000 per year), to the average vanadium pentoxide price of the prior year. Upon commencement of production by Prophecy, the Company will stop advance royalty payments and instead pay to the Lessor, a 2.5% net smelter return (“NSR”) until a total of US$3 million is paid. Thereafter, the NSR will be reduced to 2% over the remaining life of the mine (and referred to thereafter, as “production royalty payments”). All advance royalty payments made, will be deducted as credits against future production royalty payments.
Prophecy leased the Gibellini mineral claims (which comprise the majority of the resource per the Company’s news release dated November 20, 2017) with the intent to develop and operate a mine on the claims. In addition, Prophecy has either staked or acquired an additional 24 square kilometers surrounding the leased mining claims in the past 9 months for its proposed processing facility and potential future resource expansion.
