EX-4.GG 5 exhibit4-gg.htm ROYALTY REDUCTION AGREEMENT DATED AUGUST 17, 2016 Exhibit 4.GG
Exhibit 4.GG

AFTER RECORDING, PLEASE RETURN TO
AND SEND TAX NOTICES TO:
Clover Nevada LLC
c/o Elko Mining Group LLC
905 Railroad Street, Suite 101
Elko, Nevada 89801

APN’s: 010-420-01, 098-701-94, 098-701-95, 098-702-21,
098-702-22, 098-702-37, 098-702-41, 098-703-34

The undersigned affirm that this document does not
contain the personal information of any person

AGREEMENT

This Agreement is made effective as of August _____, 2016 (“Effective Date”), by and among CLOVER NEVADA LLC, a Nevada limited liability company whose address for purposes of this Agreement is c/o Elko Mining Group LLC, 905 Railroad Street, Suite 101, Elko, Nevada 89801 (“CN”), the PHOENIX JOINT VENTURE, a Nevada joint venture which presently consists of Madison Enterprises (Nevada) Inc., a Nevada corporation, and Nevada Royalty Corp., a Nevada corporation, whose address for purposes of this Agreement is c/o Battle Mountain Gold Inc., 300 –1055 West Hastings Street, Vancouver, British Columbia, Canada V6E 2E9 (“PJV”), and GOLD STANDARD VENTURES CORP., a British Columbia corporation whose address for purposes of this Agreement is 610 – 815 West Hastings Street, Vancouver, British Columbia, Canada V6C 1B4 (“GSV”). CN, PJV and GSV are referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

A. In a Quitclaim Deed with Reserved Royalty on Mineral Production dated December 27, 2007 and recorded in the official records of Lander County as document number 250304 (the “2007 Deed”), Victory Exploration Inc. conveyed to PJV the real property described in Exhibit A hereto (the “Property”), which Property is located in Lander County, Nevada, but reserved to itself a royalty (the “Royalty”) on any production of minerals from the Property. The rate of the Royalty, as set forth in Section 3 of the 2007 Deed, is five percent (5.0%) of gross value as to gold and silver, and four percent (4.0%) of net smelter returns as to all other minerals.

B. CN is the successor in interest to Victory Exploration Inc. and is the current owner of the Royalty.

C. PJV remains the current owner of the Property.

D. GSV has acquired, or intends to acquire, an interest in an affiliate of Madison Enterprises (Nevada) Inc., and is therefore concerned with the Royalty that burdens the Property.

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E. By agreement made effective June 10, 2016 (the “Amendment Agreement”, and the 2007 Deed, as amended by the Amendment Agreement, being, the “Amended 2007 Deed”), the Parties agreed to amend the 2007 Deed to, inter alia, lower the Royalty rate on gold and silver in exchange for certain consideration provided to CN as more particularly set out therein.

F. The Parties wish to amend the Amendment Agreement on the terms and conditions set out herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, incorporating the Recitals set forth above, undertake and agree as follows:

1. Definitions. Capitalized words and phrases used but not otherwise defined herein shall have the meanings ascribed to such words and phrases in the Amendment Agreement.

2. Adjustment to Initial Reduction Conditions. Section 1 of the Amendment Agreement is hereby deleted in its entirety and replaced by the following:

“1. Reduction of Royalty Rate. In consideration of GSV’s payment to CN or its designee of $925,000.00 and GSV’s delivery to CN or its designee of 532,864 validly-issued common shares in the capital of GSV (the “Initial Reduction Conditions”) free and clear of any liens and encumbrances (the “Initial Shares”) the Royalty rate on gold and silver shall be reduced from five percent (5.0%) to three and one-half percent (3.5%). GSV agrees that if on the 180th calendar day after the Effective Date (the “First True-Up Date”) the Applicable Closing Price for the common shares in the capital of GSV (the “Common Shares”) is less than $1.7359, GSV shall issue to CN or its designee, within thirty (30) calendar days of the First True-Up Date, that number of Common Shares (the “First True-Up Shares”), which is equal to $925,000.00 divided by the Applicable Closing Price on the First True-Up Date, minus the Initial Shares, free and clear of any liens and encumbrances; provided that the number of First True-Up Shares shall not exceed 94,000 Common Shares, and such issuance shall satisfy GSV’s obligation to issue to CN the First True-Up Shares. For the purposes of this Agreement, the “Applicable Closing Price” for any date shall be the closing price for the Common Shares on the TSX Venture Exchange on the trading day immediately prior to such date, converted into United States Dollars using the Bank of Canada’s noon spot rate for the conversion of Canadian Dollars into United States Dollars on such trading day.”

3. Adjustment to Potential Further Reduction of Royalty Rate. Section 2 of the Amendment Agreement is hereby deleted in its entirety and replaced by the following:

“2. Potential Further Reduction of Royalty Rate. PJV and GSV shall have the collective right (the “Further Reduction Right”) to further reduce the Royalty rate on gold and silver from three and one-half percent (3.5%) to two and one-half percent (2.5%), upon (but only upon) completion of both of the following conditions (the “Further Reduction Conditions”) by no later than two (2) years after the Effective Date (the “Further Reduction Period”):

a. payment to CN or its designee of $1,075,000.00, in immediately available funds; and

 

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b. delivery to CN or its designee of an additional amount of Common Shares (the “Subsequent Shares”), which Subsequent Shares must and shall be free and clear of any liens and encumbrances. The required number of Subsequent Shares shall be determined by dividing $1,075,000.00 by the Applicable Closing Price on the date on which the Further Reduction Right is exercised; provided, however, that if on the 180th calendar day after the exercise of the Further Reduction Right (the “Second True-Up Date”) the Applicable Closing Price for the Common Shares is less than the Applicable Closing Price on the date on which the Further Reduction Right was exercised, GSV shall issue to CN or its designee, within thirty (30) calendar days of the Second True-Up Date, that number of Common Shares (the “Second True-Up Shares”) which is equal to $1,075,000.00 divided by the Applicable Closing Price on the Second True-Up Date, minus the Subsequent Shares, free and clear of any liens and encumbrances. Should GSV be prohibited under applicable securities laws or the policies of any stock exchange upon which the Common Shares of GSV are then listed from issuing to CN the Second True-Up Shares in full (after using commercially reasonable efforts to do so), GSV shall issue to CN the maximum number of Common Shares permitted to be issued under applicable securities laws or such exchange policies, and such issuance shall satisfy GSV’s obligation to issue to CN the Second True-Up Shares.

Notwithstanding the foregoing, PJV and GSV shall have the collective right (the “Further Reduction Extension Option”) to extend the Further Reduction Period until the date which is three (3) years after the Effective Date (the “Further Reduction Extension Period”), upon (but only upon) completion of both of the following conditions (the “Further Reduction Extension Conditions”) by the date which is no later than sixty (60) calendar days prior to the expiry of the Further Reduction Period:

a. PJV and GSV collectively notify CN or its designee in writing of their election to exercise the Further Reduction Extension Option; and
 
b. payment to CN or its designee of $250,000, in immediately available funds.

The Further Reduction Right shall terminate automatically, without any further reduction in the Royalty rate, at the end of the Further Reduction Period if PJV and GSV collectively have failed to either fully-satisfy the Further Reduction Conditions or exercise the Further Reduction Extension Option and fully-satisfy the Further Reduction Extension Conditions. For the avoidance of doubt, upon the exercise of the Further Reduction Extension Option, PJV and GSV collectively must fully-satisfy the Further Reduction Conditions and the Further Reduction Extension Conditions in accordance with the terms and conditions of this Agreement in order to exercise the Further Reduction Right during the Further Reduction Extension Period.”

4. Timing Consideration and Termination Right. Notwithstanding anything to the contrary herein, GSV hereby agrees to satisfy the Initial Reduction Conditions in full on or before the date which is five (5) business days following the Effective Date (the “Termination Date”). In the event that GSV fails to satisfy both of the Initial Reduction Conditions in full on or before the Termination Date, CN shall have the right (exercisable in its sole and absolute discretion) to

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terminate this Agreement and the Amendment Agreement in its and their entirety.

5. Monetary References. Except for explicit references to Canadian Dollars, all monetary references herein are to United States Dollars.

6. Communications. All communications required or contemplated under this Agreement shall be in writing and delivered by hand or sent by mail or by private courier company to the addresses set forth in the first paragraph of this Agreement. Any Party may, by written notice so delivered to the other Parties, change the address to which delivery shall thereafter be made. Any such communication shall be deemed effective as of the date and time it is actually received.

7. Entire Agreement; Conflicts. This Agreement, together with its Exhibits, and the Amended 2007 Deed, together with its Exhibits, collectively represent the entire agreement among the Parties with respect to the subject matter hereof and thereof and shall supersede all prior discussions, negotiations, statements, representations and agreements by and among the Parties, whether verbal or written. Notwithstanding anything to the contrary herein or therein, in the event of a conflict in or between the provisions of this Agreement and the provisions of the Amended 2007 Deed, the provisions of this Agreement will prevail and govern and the provisions of the Amended 2007 Deed will be deemed to be amended to the extent necessary to eliminate such conflict.

8. Amendments. This Agreement may not be amended or supplemented except by an instrument in writing signed by all Parties.

9. Construction and Enforcement. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Nevada, without regard to choice or conflict of law principles that would result in the application of the laws of any other jurisdiction. Each of the Parties, on behalf of itself and its successors, hereby agrees to the exclusive jurisdiction of the courts of the state of Nevada or the federal district court for the District of Nevada, as may be applicable, in respect of any disputes arising hereunder, with venue to be in the state of Nevada. The headings in this Agreement are for convenience of reference only and shall not affect the interpretation hereof. This Agreement may be specifically enforced. This Agreement shall be construed as though all Parties drafted it.

10. Survival. All provisions of this Agreement shall survive the satisfaction of the Initial Reduction Conditions and, if it occurs, the satisfaction of the Further Reduction Conditions and Further Reduction Extension Conditions, and shall continue until such time as their existence is of no benefit to any Party or its successors; provided that each Party hereby acknowledges and agrees that no provision of this Agreement and the Amendment Agreement shall survive termination by CN pursuant to Section 4 hereof.

11. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors.

12. Counterparts. This Agreement may be executed in counterparts, which taken together shall constitute a single and complete instrument.

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13. Amendment to Amended 2007 Deed. The Amended 2007 Deed is hereby amended with all necessary changes made to incorporate and give effect to the provisions of this Agreement. Save as aforesaid, all other terms and provisions of the Amended 2007 Deed shall remain unchanged and in full force and effect.

14. Effect of Agreement. Notwithstanding anything to the contrary herein, no reduction of the Royalty or amendment to the 2007 Deed contemplated herein or in the Amendment Agreement shall be of any force or effect until both of the Initial Reduction Conditions have been satisfied by PJV and GSV in full in accordance with the terms and conditions of this Agreement.

[signature page follows]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates indicated in the acknowledgements below, but effective as of the Effective Date.

CN:    
 
  CLOVER NEVADA LLC, a Nevada limited
  liability company
 
  By Signed”Richard Wells”
  Name Richard Wells
  Title Authorized Signatory
 
PJV:    
 
  The PHOENIX JOINT VENTURE, a Nevada
  joint venture
 
  By its Participants:
 
  MADISON ENTERPRISES (NEVADA)
  INC., a Nevada corporation
 
  By Signed “Ian Brown”
  Name Ian Brown
  Title Chief Financial Officer
 
  NEVADA ROYALTY CORP., a Nevada
  corporation
 
  By Signed “Brian Lupien”
  Name Brian P. Lupien
  Title Treasurer
 
GSV:    
 
  GOLD STANDARD VENTURES CORP., a
  British Columbia corporation
 
  By Signed “Richard Silas”
  Name Richard Silas
  Title Corporate Secretary

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PROVINCE    
STATE OF ONTARIO )
CITY : ss.
COUNTY OF TORONTO )

On this __17____ day of August, 2016, personally appeared before me, a Notary Public, ___Richard Wells_, the Authorized Signatory of CLOVER NEVADA LLC, a Nevada limited liability company, who acknowledged that he or she executed the above instrument on behalf of said company.

    SIGNED “Richard Wells”
[seal]    
 
    NOTARY PUBLIC, residing at
My commission expires: N/A Toronto, Ontario
   

 

STATE/PROVINCE OF British Columbia   )
    : ss.
COUNTY/MUNICIPALITY OF Vancouver )  

On this 18 day of August, 2016, personally appeared before me, a Notary Public, IAN DAVID BROWN_, the CHIEF FINANCIAL OFFICER of MADISON ENTERPRISES (NEVADA) INC., a Nevada corporation, which is a Participant in the Phoenix Joint Venture, a Nevada joint venture, who acknowledged that he or she executed the above instrument on behalf of said corporation.

FILIP de SAGHER
Notary Public
2515 Alma Street
Vancouver, BC
V6R 3E8
Tel: 604-221-4343

  Signed “”Filip de Sagher”
[seal]  
  NOTARY PUBLIC, residing at
My commission expires:N/A    
 

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STATE OF IDAHO )
  : ss.
COUNTY OF KOOTENAI )

On this 22_ day of August, 2016, personally appeared before me, a Notary Public, Brien Lupien , the Treasurer of NEVADA ROYALTY CORP., a Nevada corporation, which is a Participant in the Phoenix Joint Venture, a Nevada joint venture, who acknowledged that he or she executed the above instrument on behalf of said corporation.

LEE L. WHEELER JR.
NOTARY PUBLIC
STATE OF IDAHO

[seal]   Signed “Lee Wheeler Jr”
    NOTARY PUBLIC, residing at
My commission expires: 01/26/2018 Coeur d’Alene, ID
     

 

STATE/PROVINCE OF BRITISH COLUMBIA )  
    : ss.
COUNTY/MUNICIPALITY OF Vancouver )  

On this 18 day of August, 2016, personally appeared before me, a Notary Public, Richard Silas _, the Corporate Secretary of GOLD STANDARD VENTURES CORP., a British Columbia corporation, who acknowledged that he or she executed the above instrument on behalf of said company.

    Signed “David Watts”
[seal]    
    NOTARY PUBLIC, residing at
My commission expires: N/A  
   
    David Watts, Notary Public
    1602 – 675 West Hastings Street
    Vancouver, BC V6B 1N2
    Tel: 604-685-7786 Fax: 604-685-7796
    Email: david@davidnotary.com

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Exhibit A

Property

See attached 11 pages.

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