Velocity has an option to acquire a 75% interest in the Zlatusha project and the associated exploration licence covering an area of 195 km2.
To exercise the Option in full and acquire a 75% interest in the Property, Velocity must (over a 5-year period):
- make cash payments in the aggregate amount of $700,000;
- make payments in the aggregate amount of $300,000, payable in cash or common shares of Velocity;
- complete 40,000m of drilling on the Property;
- deliver an Inferred Mineral Resource estimate on a deposit on the Property prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”); and
- deliver a Preliminary Economic Assessment on a deposit on the Property prepared in accordance with NI 43-101
If Velocity exercises the Option, Velocity and Raiden will be deemed to have formed a Joint Venture with Velocity initially owning 75% and Raiden owning 25%. If a participant's participating interest in the Joint Venture falls below 15%, that participant will transfer its participating interest to the other participant in exchange for the grant of an ongoing royalty to be paid at 1% of net smelter returns. The participant with the largest participating interest in the Joint Venture will have the right, but not the obligation, exercisable at any time prior to a production decision to purchase half of the 1% NSR Royalty (being 0.5%) for the sum of $1.5 million.
The Property is subject to an existing 2% net smelter royalty held by Gold Bull Resources Corp., of which, prior to commencement of commercial production:
- an initial 0.5% of the total Gold Bull Royalty can be purchased for USD$2,500,000 (reducing the Gold Bull Royalty from 2% to 1.5%); and
- a further 1% of the total Gold Bull Royalty can be purchased for USD$5,000,000 (reducing the Gold Bull Royalty from 1.5% to 0.5%).
