In an early test of its new gold-backed crypto token, GOLDUSA, Canamex Gold (CSE: CSQ; US-OTC: CNMXF) has used the digital currency to buy back a 1.5% net smelter royalty on its Bruner gold project in Nye County, Nevada.
Canamex bought back the royalty from American International Venture (US-OTC: AIVN) for US$450,000 by issuing the company 112,500 GOLDUSA tokens at a deemed price of US$4 per token.
Canamex estimates the NSR’s value at US$6.8 million over the life of the mine.
Canamex launched GOLDUSA through a private placement in mid-May 2018. Each token represents 1/200th of the price of gold. During the first week of the placement, Canamex offered tokens at US$4, a 40% discount to the spot price of gold at the time. The price of each token increased by 0.125¢ each week until the end of July.
Although Canamex intended to close the placement at the end of July, it extended the offer until Sept. 28, 2018, to allow all warrant holders a chance to convert their warrants into tokens.
With a current gold price of US$1,193.50 per oz., the tokens have an actual value of US$671,000.
“Most importantly, the transaction validates the GOLDUSA token to transact business with third parties, on normal commercial terms,” Canamex CEO David Vincent said in a press release.
As of a 2018 updated preliminary economic assessment, the Bruner project has a US$69.9 million after-tax net present value at a 5% discount rate and a 31% after-tax internal rate of return. The company says the project could produce 42,500 oz. gold and 44,250 oz. silver per year over 10 years.
Shares of Canamex are currently trading at 9¢ with a 52-week range of 9¢ to 17¢. The company has a $6 million market capitalization.
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