Elevation Gold Shares Plummet On Royalty Payment Halt
Elevation Gold Mining (TSXV: ELVT) has announced its decision to halt royalty payments to holders at its Moss Mine, citing operational difficulties in its first-quarter report ending March 31, 2024.
The company disclosed its operational results for the first quarter, revealing production of 6,303 ounces of gold from 654,354 ore tonnes processed, with an average grade of 0.42 g/t. Elevation Gold sold 5,850 gold ounces during this period.
Despite these figures, operational challenges persisted, primarily attributed to throughput issues with the crushing plant, compounded by the presence of harder and wetter-than-typical ore. CEO Tim Swendseid expressed optimism for improvements in the upcoming quarters, anticipating enhanced throughput and gold production.
However, due to lower-than-expected production, the company announced a temporary suspension of royalty payments and silver stream delivery obligations to preserve liquidity. Discussions with Maverix Metals, the principal lender and holder of the silver stream, along with other royalty holders, are underway to restructure obligations and alleviate royalty burdens.
The company shares declined by as much as 41% as of press time since the announcement.
The decision to suspend royalty payments was not uniformly accepted, as consent was not received from certain royalty holders. Elevation Gold is actively engaged in discussions with Maverix and other stakeholders to resolve outstanding obligations. The company is exploring various options to ensure liquidity, including debt restructuring, financing, or a potential sale of the Moss Mine.
Furthermore, the company consolidated outstanding unsecured debts owed to Maverix, amounting to approximately $28.2 million, as obligations under the silver streaming agreement. This debt consolidation, effective immediately, secures Maverix’s position against all of Elevation Gold’s assets.
In other developments, the US Bureau of Land Management approved a mine plan of operations minor amendment for the Moss Mine, facilitating the reallocation of acreage to the Reynolds Pit area. This amendment enables full development of the Reynolds Pit, with mining operations commencing in late March.
Additionally, the company announced the resignation of Mike Haworth from its board of directors, effective immediately.
Elevation Gold Mining last traded $0.08.
Information for this briefing was found via Sedar, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
