Goldrich Mining Commences 2016 Mining Season at Chandalar Mine
SPOKANE, WA - June 6, 2016 - Goldrich Mining Company (OTCBB: GRMC) (“Goldrich” or the “Company") is pleased to announce Goldrich NyacAU Placer, LLC ("GNP") has commenced mining at the Chandalar gold project in Alaska. Favorable spring weather conditions allowed GNP to begin processing stockpiled pay gravel approximately three weeks ahead of the normal mid-June start of the production season. Mining of pay gravel is expected to continue through early September, subject to weather conditions.
"We are pleased to kick off the 2016 season at Chandalar,” stated Goldrich President and CEO Mr. William Schara. “GNP expects to process stockpiled pay gravel, blast and process additional mineralized material, and continue development of the new wash plant this year. We want to thank GNP for their continued hard work to move the Chandalar placer project forward."
GNP is a 50/50 joint-venture formed between Goldrich and NyacAU, LLC (“NyacAU”) to mine the various placer deposits that occur throughout the Company’s 23,000 acre Chandalar land package (“Chandalar”) in central Alaska. Goldrich retains ownership of its 50% interest in GNP but, after the sale of 12% of the cash flows Goldrich receives in the future from its interest in GNP to Chandalar Gold, LLC (“CGL”), a non-related entity, Goldrich will effectively receive approximately 44% and CGL will receive 6% (12% of Goldrich’s 50% of GNP = 6%) of any cash distributions produced by GNP, subject to the terms of the GNP operating agreement (see press release dated June 23, 2015).
According to the GNP operating agreement, on at least an annual basis, GNP shall allocate and distribute all revenue (whether in cash or as gold) generated from GNP’s placer operation in the following order:
- Current year operating expenses,
- Members’ distribution of 20% (10% to Goldrich and 10% to NyacAU) provided that, for so long as the loan (LOC2) to GNP from NyacAU for the purchase of a royalty is not paid in full, GNP shall retain 100% of Goldrich’s distribution to apply against the loan,
- After payment of operating expenses and the member’s distribution of 20%, GNP will apply any remaining revenue to reduce the remaining balance of the loan from NyacAU to GNP for the development of the mine (LOC1),
- Reserves for future operating expenses and capital needs, not to exceed $3,000,000 in any year, and
- Member distributions of any remaining gold production on a 50:50 basis to each of NyacAu and Goldrich provided that, for so long as LOC2 is not paid in full, GNP shall retain 100% of Goldrich’s distribution to apply against the loan.
To date approximately US$24 million has been invested by NyacAU to develop the mine. All initial capital expenditures are being funded by NyacAU under terms of the joint-venture operating agreement.