Metals Update 16/06/2021

Ely Gold royalty files NI 43-101 report on Jerritt

Ely Gold Royalties Inc. royalty First Majestic Silver Corp. has filed on SEDAR an independent National Instrument 43-101 technical report, dated April 30, 2021, and filed on SEDAR on May 5, 2021, detailing an updated mineral resource estimate for the Jerritt Canyon mine located in Elko county, Nevada. The Report was prepared by SLR Consulting (Canada) Ltd. (“SLR”), an independent international engineering firm specializing in mining and mineral exploration engineering and evaluation.

Ely Gold holds a 0.5% net smelter returns royalty (the “JC NSR”), which includes the entire 119 square mile land package at Jerritt Canyon and a per ton royalty interest (“PTR”) on all ore processed through the Jerritt Canyon mill. Ely Gold acquired the JC NSR, from Eric Sprott, in 2020 (refer to news release, May 13, 2020), and acquired the PTR through a private transaction in 2019 (refer to news release, May 23, 2019). The PTR is linked to a perpetual license for the patent to certain proprietary scrubbing technology involved in the removal of mercury from gas that is currently being used at the Jerritt Canyon Processing Facilities.

JCG LLC (“JCG”), a private mid-tier North American gold producer, took over the operation of the Jerritt Canyon Mine in 2015. On April 30, 2021, First Majestic acquired all of the issued and outstanding shares of JCG. As such, First Majestic now indirectly owns and operates Jerritt Canyon, through the owner and operator JCG.

The most recent mineral resource estimate carried out for Ely Gold on the Jerritt Canyon Mine was by Behre Dolbear & Company (USA) Inc. which was filed on SEDAR on June 25, 2020, with an effective date of June 30, 2018; results of which can be found in Table 2. The reduction in total contained ounces of gold in the December 31, 2020 resource estimate is due to ongoing production at the mine, as reflected in Table 3, as well as an overall reduction in gold grade. JCG has been drilling continuously since taking over the operation in 2015 and had drilled over one million feet of combined core and reverse circulation drill holes from underground between 2015 and 2017. From 2018 to 2020, JCG drilled an additional 1.8 million feet from underground which enabled them to convert a significant amount of the June 2018 Inferred Resources to Measured and Indicated Resources in the December 2020 resource calculation.