Spring Valley Royalty

Terraco has royalty coverage on claims covering the Spring Valley Gold Project ("Spring Valley "), located in Pershing County, Nevada. Spring Valley is a joint venture between Barrick Gold Corp. ("Barrick") and Midway Gold Corp. ("Midway"), where Barrick has earned a 70% interest in the project (2014) by completing work expenditures totaling US$38 million. In addition, Midway Gold has converted its 30% interest into a 25% free-carried interest in Spring Valley; as a result, will be carried to production by Barrick and will pay back its share of development capital from production. Barrick is the operator of the joint venture, has accelerated its earn-in under the joint venture terms and the project was upgraded to the Barrick's development team in early 2012. The Barrick Spring Valley budget for 2014 is over US$17 million.

Terraco's net smelter returns ("NSR") royalty coverage includes three separate components.  The map below and colour codes provides a schematic of the royalties.

  1. An option to acquire up to a 3.0% NSR royalty (by December 2016) on claims covering (outlined in RED hatching on map below) the majority of the currently outlined Spring Valley gold deposit.

  2. A total of up to a  1% NSR royalty on the remaining portion (outlined in GREEN hatching on map below) of the currently outlined Spring Valley gold deposit as well as areas to the north of the currently outlined NI 43-101 gold resource.  

    (Per #2, Terraco currently has direct ownership of 0.5% NSR royalty plus an option (by December 2016) to purchase an additional 0.5% NSR royalty for a total of up to 1% NSR)

  3. Terraco has a Right of First Refusal (ROFR) for a 1% NSR royalty on claims within a one-half (1/2) mile perimeter area of interest (around the claims in RED).

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