Riley Gold stock soars on US$2.6M Osisko Gold investment

Credit: Riley Gold Corp.

Riley Gold (TSXV: RLYG; US-OTC: RLYGF) has received a US$2.6 million investment from Osisko Gold Royalties (TSX: OR; NYSE: OR) in exchange for royalties on two gold projects held by Riley Gold’s wholly owned Nevada subsidiary.

The agreement comprises a 2% net smelter return royalty on the Pipeline West/Clipper (PWC) gold project; a 0.5% NSR on the Tokop gold project, and an assignment of certain royalty buyback rights on PWC.

Proceeds from the investment will be used for exploration and development activities on these properties. According to Riley Gold, this investment would allow for various workstreams including continued exploration at PWC.

Located in Lander County, about 80 km southwest of Elko, the PWC project includes 24.7 sq. km of unpatented mining claims and patented lands adjacent to properties controlled by Barrick Gold (TSX: ABX; NYSE: GOLD) and Newmont‘s (TSX: NGT; NYSE: NEM) Nevada Gold Mines joint venture. Historical drilling on the property – which began in the early 1990s – returned results of 2.59 grams gold per tonne over 4.6 metres, including a high value of 3.84 grams gold.

The Tokop project is located on the prolific Walker Lane trend in Esmeralda county, about 80 km south of Tonopah. The land package spans over more than 31 sq. km, with a number of deposits currently being developed or mined nearby.

“We are extremely pleased to have Osisko endorse and support our work in Nevada, particularly at PWC, by way of the investment. We believe that this transaction delivers significant value to our shareholders through our ability to limit equity dilution given the current challenging state of the equity markets,” Todd Hilditch, CEO of Riley Gold, commented.

Shares of Riley Gold surged 35.7% by midday Toronto time following the investment announcement. The company has a market capitalization of approximately $6.4 million.

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