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NewCastle consolidates Castle Mountain gold project royalties with Franco-Nevada for C$3.4M

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NewCastle consolidates Castle Mountain gold project royalties with Franco-Nevada for C$3.4M

NewCastle GoldLtd. said April 11 that it has entered into an agreement with in which thetwo parties agreed to create a new 2.65% royalty covering all of NewCastle's gold projectclaims in California, in return for a cash payment of about C$2.2 million.

The new royalty will override five separate pre-existing royaltiesheld by Franco-Nevada that cover most of Castle Mountain and does not require anyadvanced minimum royalty payments.

Franco-Nevada will also subscribe for 3,636,364 of NewCastle'ssubscription receipts at 32 Canadian cents each for proceeds of C$1.2 million.

Each subscription receipt entitles Franco-Nevada to receive 1unit, which consists of 1 common share and 0.5 common share purchase warrant. Eachwarrant expires five years from the closing of the placement and can be exercisedfor 1 NewCastle common share at 64 cents apiece.

NewCastle said the transaction injects working capital into thecompany, allowing for advancement at Castle Mountain, and provides a streamlinedand more cost-effective royalty with Franco-Nevada.