Royalstar says bye to Tonkin Springs

Royalstar Resources (RYQ-V) is selling its stake in Gold Capital (GOPC-Q) to Globex Mining Enterprises (GMX-T).

An agreement, subject to regulatory approval, would see the Vancouver-based junior sell its 4.4 million shares of Gold Capital at US80 cents each. Globex would pay US$3.5 million, plus 80% of Gold Capital’s debt (totaling US$760,000). The total transaction is valued at US$4.1 million.

In a related transaction, Gold Capital’s 40% partner at the Tonkin Springs gold project, U.S. Gold, recently acquired a 25% interest in Gold Capital.

U.S. Gold has entered into a conditional agreement with Globex to vote its Gold Capital shares in favor of a possible merger between Gold Capital and Globex.

Globex has the irrevocable option to exchange U.S. Gold’s 2.3 million shares of Gold Capital for 632,094 shares of Globex common stock. Globex will also make an offer for the remaining shares of Gold Capital. If completed, Gold Capital would become a wholly owned subsidiary of Globex.

The transaction is conditional upon Globex raising US$10 million to place Tonkin Springs in production.

Situated in the Battle Mountain trend of central Nevada, Tonkin Springs contains 9.8 million tons grading 0.056 oz. gold per ton (equivalent to 553,700 oz. gold).