TORONTO, ON / ACCESSWIRE / July 21, 2020 / Galway Metals Inc. (TSXV:GWM) ("Galway Metals" or the "Company") is pleased to announce that it has entered into an agreement (the "Agreement") with an arm's length third party royalty holder to buy back a two percent (2.0%) net smelter returns royalty (the "Royalty") covering certain mineral claims at the Company's Clarence Stream property in southwest New Brunswick (the "Property"). The mineral claims fully cover the South, North and George Murphy Zones, the gap area between the George Murphy and Richard Zones, and potential extensions to these zones and other prospective targets. The purchase of the Royalty was closed effective today pursuant to an agreement dated July 15, 2020.
The original agreement allowed only for buyback of one percent (1.0%) of the royalty for $500,000 for each 0.5%. Galway was able to negotiate with the royalty holder to purchase the royalty in its entirety. Under terms of the Agreement, Galway Metals will pay a total purchase price of $3,000,000 in six equal annual installments of $500,000, with each partial payment representing the purchase of one-sixth (1/6) of the Royalty (each a "Partial Payment"). Pursuant to the Agreement, on closing Galway will issue 434,783 common shares in the capital of the Company ("Shares") to the royalty holder, which shall represent the first Partial Payment of $500,000 at a deemed price equal to $1.15 per Share. Each subsequent $500,000 Partial Payment shall be paid as follows: (i) $125,000 in cash; and, (ii) the remaining $375,000, at the sole election of the Company, shall be paid either in cash, through the issuance of Shares or a combination thereof as shall equal $375,000 with the Shares valued at a deemed price equal to the higher of: (A) the closing price of the Shares on the TSX Venture Exchange ("TSXV") on the day that is two (2) business days prior to the date of the respective share issuance, and (B) the lowest price of Shares that shall be acceptable to the TSXV. The Shares will be subject to the statutory hold periods of four months and one day.
Robert Hinchcliffe, President, Chief Executive Officer & Director, commented, "We are extremely pleased to have come to an agreement with the royalty holder to buy back this significant NSR, which covers the entirety of all gold resources at Clarence Stream, plus the entirety of at least one additional zone discovered by Galway after the resource was released. We see the removal of this royalty as a significant transaction for Galway Metals shareholders as it will contribute meaningfully to further unlocking value of the Clarence Stream land package beyond what we have already accomplished. The royalty holder prospected and staked the claims on the Property, and his willingness to receive the majority of payment as shares in Galway demonstrates his continued belief in the Property and in our Company's future."
About Galway Metals Inc.
Galway Metals is focused on two gold projects in Canada, Clarence Stream, an emerging gold district in New Brunswick, and Estrades, the former producing, high-grade VMS mine in Quebec. The Company began trading on January 4, 2013, after the successful spinout to existing shareholders from Galway Resources Ltd. following the completion of the US$340 million sale of that company. With substantially the same management team and Board of Directors, Galway Metals is keenly intent on creating similar value as it had with Galway Resources Ltd.
For further information, please visit www.galwaymetalsinc.com or contact:
Robert Hinchcliffe
President, Chief Executive Officer & Director
Telephone: 1 (800) 771-0680
Cautionary Statement
Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this news release.
This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management's expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, completion of the Royalty buy back, objectives, goals or future plans. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to the risks involved in the mineral exploration and development industry, and those risks set out in the Company's public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
SOURCE: Galway Metals Inc.