4. Mineral Properties


	At June 30, 2019		At December 31, 2018
Mt Todd, Australia	$	2,146	$	2,146
Guadalupe de los Reyes, Mexico		—		275
	$	2,146	$	2,421

During October 2017, we entered into an agreement (the “Option Agreement”) to option our interest in the Guadalupe de los Reyes gold and silver project in Sinaloa, Mexico (the “GdlR Project”) to Minera Alamos Inc. and its subsidiary Minera Alamos de Sonora S.A. de C.V. (“Minera Alamos”). In June 2019, the Option Agreement was assigned from Minera Alamos to ePower Metals Inc. (“ePower”) by way of assignment agreement (the “Assignment Agreement”), with our consent. Completion of the Assignment Agreement is subject to a number of conditions. The Assignment Agreement provides that in certain circumstances, the rights under the Option Agreement will revert from ePower to Minera Alamos.

Pursuant to the terms of the Option Agreement and the Assignment Agreement, we granted Minera Alamos or ePower, as applicable, (the “GdlR Optionholder”) an exclusive right and option right to earn a 100% interest in the GdlR Project by:

making payments totaling $6,000, comprised of a payment of $1,500 made at the execution of the Option Agreement (the “Option Grant Date”); two successive payments of $1,500 each to be made at the one-year and two-year anniversaries of the Option Grant Date; and a final $1,500 payment to be made before the four-year anniversary of the Option Grant Date;

maintaining the concessions comprising the GdlR Project in good standing;

fulfilling all obligations to the Ejido La Tasajera (the “Ejido”) as set out in the temporary occupation contract between us and the Ejido;

granting us a capped net smelter return royalty (“NSR”) on production from open pit mining (the “Open Pit NSR”) at rates that range from 1% (at gold prices of $1,400/oz or less) to a maximum of 2% (at gold prices above $1,600/oz) up to an aggregate of $2,000 in royalty payments;

granting us a perpetual NSR on production from underground mining (the “Underground NSR”) at rates that range from 1% (at gold prices of $1,400/oz or less) to a maximum of 2% (at gold prices above $1,600/oz); and

granting us the right to assume a 49% non-carried interest in an underground project if GdlR Optionholder decides to develop an underground mine at the GdlR Project (the “Back-in Right”).

The Option Agreement provides that all cash payments are non-refundable and optional to the GdlR Optionholder, and in the event the GdlR Optionholder fails to pay any of the required amounts as set out in the Option Agreement, or fails to comply with its other obligations, the Option Agreement will terminate and the GdlR Optionholder will have no interest in the GdlR Project. Provided it is not in breach of the Option Agreement, the GdlR Optionholder may, at its discretion, accelerate the above payment schedule.

Subject to the GdlR Optionholder timely making all the option payments, and fulfilling its other obligations with respect to the Option Agreement, we will transfer 100% of the shares of the Company’s 100% owned subsidiary Minera Gold Stake S.A. de C.V., the entity which owns the GdlR Project, to the GdlR Optionholder and the Open-Pit NSR and Underground NSR will be granted to us.

If the GdlR Optionholder discovers and decides to develop an underground mine at the GdlR Project and we exercise the Back-in Right, we and the GdlR Optionholder have agreed to form a joint venture to develop and operate the underground mine. If the joint venture is formed, the Underground NSR will terminate.

In October 2018, the Company agreed to extend the due date for the second $1,500 option payment for the GdlR Project by six months to April 23, 2019, at which time the payment was made. As consideration for the deferral, the Company received an additional $150 in cash, $50 paid on October 24, 2018 and $100 paid on January 23, 2019. In addition, Minera Alamos paid interest of $67 at a rate of 1.5% per month on the unpaid balance of the $1,500 payment beginning January 24, 2019.

The Company has determined that control of the GdlR Project has not been transferred for accounting purposes. Therefore, the first option payment of $1,500 received in October 2017 and the $150 for extension of the second option payment were accounted for as a reduction to carrying value. Receipt of the second option payment of $1,500 and interest of $67 during April 2019 reduced the carrying value to zero and resulted in recognition of $1,392 as a deferred option gain. In addition, potential royalty revenue and future option payments have not been recognized for accounting purposes.