Columbus Gold Accelerates Earn-In Terms for 1.9 Million oz. Paul Isnard Gold Project
June 08 2011 - 9:00AM
Marketwired
Columbus Gold Corp. (TSX VENTURE: CGT) ("Columbus Gold") is pleased
to announce that it has amended its option to acquire a 100%
interest in the Paul Isnard gold project in French Guiana (the
"Amendment"), which includes the 43-101 compliant 1.9 million ounce
Montagne d'Or gold deposit, thereby accelerating Columbus Gold's
ability to earn an initial 51% interest in the project.
Robert Giustra, Chairman & CEO of Columbus Gold, stated:
"The amendment to the acquisition terms for Paul Isnard removes a
significant share overhang from the market and provides complete
clarity and a higher level of confidence respecting the projected
share structure of Columbus Gold as we aim to earn an initial 51%
interest in the project, and ultimately a 100% interest.
Maintaining a reasonable capital structure from the onset will
ensure the potential for higher share levels and as a consequence
will result in greater returns for our shareholders".
Columbus Gold originally had the right to earn an initial 51%
interest in the Paul Isnard project over a two year period, by
incurring minimum exploration expenditures of US$7 million, and by
issuing common shares equal to 49% of its post-issuance outstanding
share capital, in a combination of a part and parcel private
placement to Pelican Venture SAS ("Pelican") for up to 15%, and
annual share option payments to the vendor, Auplata S.A.
("Auplata") for the balance to 49% in aggregate. The first two
share issuances to Auplata were subject to a two-year escrow.
Pursuant to the original terms, Columbus Gold could not accelerate
share payments prior to the completion of $7 million in exploration
expenditures. (See press release dated December 3, 2010 for details
on the original terms.)
With the Amendment, Columbus Gold is now able to issue all of
the shares to Auplata at closing, which is expected this month,
whereby Pelican will acquire up to 15% in a part and parcel private
placement and the balance to 49% in aggregate will be issued to
Auplata. In consideration for the Amendment, Columbus Gold has
agreed to only escrow 67% of those shares that were subject to
escrow prior to the Amendment.
The Paul Isnard gold project includes the 43-101 compliant 1.9
million ounce Inferred gold resource in the Montagne d'Or gold
deposit which consists of 36.7 million tonnes grading 1.6 gpt. The
Montagne d'Or gold deposit is open along strike and at depth.
Columbus Gold has an option to earn a 100% interest in Paul Isnard,
subject to an underlying royalty.
The Amendment, the underlying agreement, and the transactions
contemplated thereby are subject to TSX Venture Exchange approval
and to the completion of the remaining conditions precedent, being
a positive title opinion and the completion of the Pelican private
placement.
The Paul Isnard gold project is located approximately 180 km
west of the capital city of Cayenne, French Guiana and has been an
important centre of alluvial and colluvial gold mining operations
since the late 19th century with reported estimated production of
about two million ounces.
The project occurs within the northernmost of two east-west
trending Proterozoic greenstone belts making up the French Guiana
sector of the Guiana Shield. Modern exploration at Paul Isnard
includes geological, geochemical and geophysical surveys, and
diamond core drilling carried out primarily from 1996 to 1999. Most
of this work included 54 holes for 10,600 metres directed at the
Montagne d'Or gold deposit which consists of a linear mineralized
body within laminated felsic volcanic rocks outlined and partially
delineated for a strike length of 2,000 metres and an average depth
of 100-150 metres. The deposit consists of two closely spaced,
mineralized layers, respectively averaging about 50 and 17.5 metres
in thickness, and multiple smaller, sub parallel gold-bearing bands
and stringer zones.
The initial Columbus Gold drilling program planned to commence
in August will be focused on the Montagne d'Or deposit where holes
drilled to 200 metres depth are planned in order to increase the
mineral resources and infill drilling is planned to convert
Inferred resources to Measured and Indicated categories. Future
drill programs will also target the eastern and western extensions
of the Montagne d'Or deposit where more than 2.5 km of strike
provides excellent expansion potential and will also test numerous
less developed gold prospects and undrilled geochemical anomalies
which occur throughout the project area.
Columbus Gold's independent consultant and Qualified Person,
John Prochnau (P. Geo), B.Sc. (Mining Engineering), M.Sc.
(Geology), has reviewed and approved the technical content of this
news release.
ON BEHALF OF THE BOARD,
Robert Giustra, Chairman & CEO
This release contains forward-looking information and
statements, as defined by law including without limitation Canadian
securities laws and the "safe harbor" provisions of the US Private
Securities Litigation Reform Act of 1995 ("forward-looking
statements"), respecting the Amendment, the underlying agreement
(with the Amendment, the "Agreement"), the closing share issuances,
the timing of closing, and the conditions precedent in connection
therewith. Forward-looking statements involve risks, uncertainties
and other factors that may cause actual results to be materially
different from those expressed or implied by the forward-looking
statements, including without limitation the ability to obtain
regulatory and TSX Venture Exchange approval of the transactions
contemplated under the Agreement, in particular obtaining those in
time for a June 2011 closing; Columbus Gold's willingness to
complete the transactions on the above terms; the ability to obtain
applicable exemptions from prospectus and registration requirements
in connection with the issuance of securities of Columbus Gold; the
ability to satisfy the conditions precedent contained in the
Agreement, including without limitation the ability to obtain a
positive title opinion, TSX Venture Exchange approval, and the
Pelican private placement in particular in time for a June 2011
closing; the ability to obtain alternate financing; changes in the
market; decisions respecting whether or not to pursue the
transactions contemplated under the Agreement; non-performance by
contractual counterparties; and general business and economic
conditions. Forward-looking statements are based on a number of
assumptions that may prove to be incorrect, including without
limitation assumptions about: general business and economic
conditions; that Columbus Gold and Auplata will be able to
successfully complete the conditions precedent to the Agreement;
that Columbus Gold will desire to continue earning into the
Property over time; the ability to locate sufficient financing for
ongoing operations; and general market conditions. The foregoing
list is not exhaustive and we undertake no obligation to update any
of the foregoing except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Columbus Gold Corporation Peter Kendrick Senior
Vice-President 604-638-3474 or 1-888-818-1364
info@columbusgoldcorp.com www.columbusgoldcorp.com