…and in exchange, he is willing to give the company with the money a royalty on a worthless piece of moose pasture. And it just so happens that Kal Malhi runs the company that wants to pay Kal Malhi the money.
Nice man. Here’s an interesting mail received last week from A. Reader:
On August 11, 2022 Coloured Ties Capital (TIE.v), the former Growmax Resources after a nasty proxy fight and restructuring, issued a corporate update which reads in part:
Acquisition of Net Smelter Royalty on Arnett Creek Gold Project being developed by Revival Gold Inc.
Coloured Ties announces that, further to its news release dated May 12, 2022, it has entered into a royalty purchase agreement (the “Purchase Agreement”) with BullRun Capital Inc. (“BullRun”) pursuant to which it will acquire a one percent (1%) net smelter return royalty (the “NSR Royalty”) on the Arnett Creek Gold Project currently being developed by Revival Gold Inc. (the “Acquisition”). As consideration for the NSR Royalty the Company will pay BullRun USD$2,500,000.
Kal Malhi, a director and the Chief Executive Officer of the Company, is the sole shareholder and director of BullRun. The Acquisition is therefore considered a “related party transaction” for the purposes of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”) and TSX Venture Exchange (“TSXV”) Policy 5.9. The Acquisition is exempt from the formal valuation requirement of MI 61-101 pursuant to section 5.5(b) as the Company’s common shares are not listed on a “Specified Market” as set forth in MI 61-101. However, as the value of the consideration to be received by BullRun exceeds 25% of the Company’s current stock market capitalization, disinterested shareholder approval will be required for the Acquisition.Accordingly, the Company will seek the approval of the Acquisition by a majority of the votes cast by disinterested shareholders at the Company’s annual general and special meeting to be held on September 23, 2022 (the “AGSM”). Additional details of the Acquisition, as required by MI 61-101, will be described in the Company’s information circular to be filed and mailed to shareholders in connection with the AGSM.
We then go to the 43-101 Technical Report for Revival Gold. As can be seen, Yamana retained its claims over the Beartrack target, where 2.108 million oz of the recently announced 2.217 million oz of indicated resource and 1.876 million oz of the announced 1.924 million oz inferred resource are located (page 1-8). The Arnett target, located about 5 miles west of Beartrack (page 4-3), contains the rest of the resources: 0.109 million oz indicated at 0.59 g/t and 0.066 million oz inferred at 0.59 g/t (175,000 oz total). Looking at the claim map (4-3) and BLM files, Yamana dropped the Arnett property after it ceased mining at Beartrack while retaining the core Beartrack claims. The Arnett deposit was known at that time, and in 2003 a group of prospectors staked a small group of 16 claims over it (light green). Another group staked 10 more claims in 2014 (dark blue). Then in 2016, a claim staking contractor acquired the 68 “ACE claims” (orange), which surrounded the Arnett resource claims on nearly 3 sides, and transferred them to BullRun Capital, which runs Coloured Ties. Some geochemical and geophysical anomalies have been identified on the ACE claims, but there has been no discovery on the claims, much less defined resource. When the ACE claims were optioned to Revival Gold in 2017, BullRun retained a 1.0% NSR royalty which could be bought down at any time for US$2.0 million (pages 4.8 and 4.9). BullRun wants Coloured Ties shareholders to approve buying this royalty from it for US$2.5 million.