DENVER, April 15, 2014 /PRNewswire/ -- Vista Gold
Corp. (TSX & NYSE MKT: VGZ) ("Vista" or the "Company") today
announced that its subsidiary, Minera Gold
Stake, S.A. de C.V. ("MGS"), has entered into an agreement
(the "Option Agreement") to option its interest in the Guadalupe de
los Reyes gold and silver project in Sinaloa, Mexico (the "GdlR Project") to
Cangold Limited ("Cangold").
Pursuant to the terms of the Option Agreement, Vista has granted
Cangold the right to earn a 70% interest in the GdlR Project
by:
- making payments totaling US$5,000,000 in five payments over a three-year
period, with payments totaling US$1,000,000 in the first year (US$150,000 of which was paid at signing),
US$1,500,000 in the second year and
US$2,500,000 in the third year;
- operating the GdlR project, maintaining the concessions
comprising the GdlR Project in good standing; and
- fulfilling all of the obligations of MGS, Vista's wholly-owned
subsidiary, to the Ejido La Tasajera (the "Ejido") as set out in the temporary occupation
contract between MGS and the Ejido.
The Option Agreement provides that all cash payments are
non-refundable and optional to Cangold, and in the event Cangold
fails to pay any of the required amounts on the scheduled dates or
fails to comply with its other obligations, the Option Agreement
will terminate and Cangold will have no interest in the GdlR
Project. Provided it is not in breach of the Option Agreement,
Cangold may at its discretion advance the above payment schedule
and exercise the initial option for a 70% interest in the GdlR
Project any time during the three-year period.
Subject to Cangold earning a 70% interest in the GdlR Project,
Vista has granted Cangold an additional option to earn the
remaining 30% interest in the GdlR Project by notifying Vista of a
production decision and by making a cash payment to Vista of
US$3,000,000 plus an additional cash
payment based on a formula that includes the growth, if any, in
estimated NI 43-101 Measured and Indicated mineral resources of the
GdlR Project, and the then prevailing spot gold price ("Escalator
Payment").
Should Cangold determine not to put the GdlR Project into
production, the Option Agreement provides Vista with the right to
buy back Cangold's 70% interest in the GdlR Project for a cash
payment of US$5,000,000 plus the
Escalator Payment described above. If Vista does not exercise
its buyback option, Vista will still retain a right of first
refusal should Cangold elect to sell its 70% interest in the GdlR
Project to a third party.
Cangold is a junior exploration company engaged in the
exploration and development of gold projects in Mexico and Canada. Cangold trades on the TSX Venture
Exchange under the symbol CLD.
About Vista Gold Corp.
Vista's principal assets include its flagship Mt Todd gold
project in Northern Territory, Australia, and an 11.2% holding in Midas Gold
Corp. In addition to non-core projects in Mexico and California, Vista holds royalty interests in
projects in Bolivia and
Indonesia. For more information about our projects, including
technical studies and resource estimates, please visit our website
at www.vistagold.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the U.S. Securities Act of 1933, as amended, and
U.S. Securities Exchange Act of 1934, as amended, and
forward-looking information within the meaning of Canadian
securities laws. All statements, other than statements of
historical facts, included in this press release that address
activities, events or developments that Vista expects or
anticipates will or may occur in the future, including such things
as Cangold complying with its obligations under the Option
Agreement (including making contemplated payments, maintaining the
concessions and complying with MGS' obligations to the Ejido), Cangold's potential decision to put
the GdlR project into production, Vista's ongoing interest in the
GdlR Project and other such matters are forward-looking statements
and forward-looking information. The material factors and
assumptions used to develop the forward-looking statements and
forward-looking information contained in this press release include
the following: ability of Cangold to make payments contemplated in
the Option Agreement, approved business plans, anticipated and
estimated costs and budget expenditures to continue to optimize and
advance the Company's core assets, the perceived extent and
duration of the current weakness of gold equity securities and
other such matters. When used in this press release, the
words "optimistic," "potential," "indicate," "expect," "intend,"
"hopes," "believe," "may," "will," "if," "anticipate," "would,"
"could," and similar expressions are intended to identify
forward-looking statements and forward-looking information.
These statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of Vista to be materially different from any future
results, performance or achievements expressed or implied by such
statements. Such factors include, among others, risks
relating to Cangold's ability to obtain financing (if at all),
risks related to Cangold's determination to put the GdlR Project
into production, uncertainty of resource estimates, estimates of
results based on such resource estimates; risks relating to
completing metallurgical testing; risks relating to cost increases
for capital and operating costs; risks related to the timing
and the ability to obtain approval of the environmental impact
statement and the necessary permits for the Mt Todd gold project,
risks of shortages and fluctuating costs of equipment or supplies;
risks relating to fluctuations in the price of gold; the inherently
hazardous nature of mining-related activities; potential effects on
Vista's operations of environmental regulations in the countries in
which it operates; risks due to legal proceedings; risks relating
to political and economic instability in certain countries in which
it operates; as well as those factors discussed under the headings
"Note Regarding Forward-Looking Statements" and "Risk Factors" in
Vista's Annual Report Form 10-K as filed on March 17, 2014 and other documents filed with the
U.S. Securities and Exchange Commission and Canadian securities
regulatory authorities. Although Vista has attempted to
identify important factors that could cause actual results to
differ materially from those described in forward-looking
statements and forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. Except as required by law, Vista assumes no
obligation to publicly update any forward-looking statements or
forward-looking information; whether as a result of new
information, future events or otherwise.
For further information, please contact Connie Martinez at (720) 981-1185, or visit the
Company's website at www.vistagold.com.
SOURCE Vista Gold Corp.