Ely Gold Royalties Inc. and its subsidiary Nevada Select Royalty Inc. inked a definitive option agreement for the sale of its Butte Valley copper-gold project in Nevada to Quaterra Resources Inc.'s subsidiary Six Mile Mining Company.

The project consists of 78 unpatented mining claims.

Under the deal, Quaterra has to pay a total of US$250,000 in cash payments, and Nevada Select will retain a 2% net smelter returns royalty on the claims. Quaterra may buy 1% of the NSR for US$10.0 million at any time within 10 years of the effective date.

Meanwhile, Quaterra also signed a lease agreement with a Nevada prospecting syndicate, giving it the option to purchase 600 additional unpatented claims to consolidate the Butte Valley District.