Battle Mountain Gold Completes Acquisition Of Dolores Net Smelter Royalty
Battle Mountain Gold Exploration Corp. (OTCBB:BMGX) (“Battle Mountain”) is pleased to announce that the company has completed the acquisition of the 2% Net Smelter Royalty (“NSR”) on all of the gold and silver production from Minefinders Corporation Limited’s (Minefinders) Dolores Mine in Chihuahua, Mexico. This acquisition complements Battle Mountain’s existing 1.25% NSR on the gold production from the Dolores Mine.
Based on the Technical Report released by Minefinders on November 7, 2006, the Dolores Mine has an estimated 14 year mine life with an estimated average annual gold production of 121,000 ounces and annual silver production of 4,500,000 ounces. Minefinders anticipates a third quarter, 2007 start up of the Dolores Mine.
The acquisition cost of the Dolores 2% NSR, of $9.45 million and a concurrent pay down of the Macquarie Bridge Facility (principal and accrued interest of $4.464 million) was financed by a $13.91 million bridge loan facility from Royal Gold, Inc. (“Royal”). The facility is for a one year term bearing interest at LIBOR plus 3% and is convertible until November 15, 2007 into Battle Mountain shares at $0.60 per share.
Mr. Mark Kucher, President and CEO stated, “The purchase of the 2% gold and silver NSR on the Dolores Mine culminates Battle Mountain’s recent search for a long term, ’anchor asset’ for the company’s royalty portfolio. We are very pleased with the acquisition and anticipate receiving an expanding cash flow stream from Dolores.”
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