Vista Gold Corp. Announces Amendments to Agreement to Sell Amayapampa
21 Juli 2005 - 1:30AM
PR Newswire (US)
Vista Gold Corp. Announces Amendments to Agreement to Sell
Amayapampa DENVER, July 20 /PRNewswire-FirstCall/ -- Vista Gold
Corp. (AMEX:VGZ) Toronto announces that it has agreed with Luzon
Minerals Ltd. (TSX-V: LU), subject to regulatory approval, to
further amend the terms of the original purchase option agreement
between the companies concerning Vista's Amayapampa gold project in
Bolivia, with respect to the payments previously due on June 15,
2005 and June 15, 2006. The agreement had been most recently
amended in January 2005, in connection with Luzon's decision to
exercise its option to purchase the Amayapampa project from Vista,
as previously announced. Mike Richings, Vista President and CEO,
stated, "We believe the amendments will facilitate Luzon arranging
project financing and lead to accelerated development of the
project. At the same time, we believe that the amended agreement
will appropriately compensate Vista and provide us with the
potential for a long-term royalty revenue stream." The amended
agreement, dated July 18, 2005, calls for an aggregate purchase
price comprising: U.S. $2,700,000 (including U.S. $100,000
previously paid); either 3,250,000 or 4,250,000 common shares in
the capital of Luzon (including 250,000 already issued to Vista),
and 1,000,000 common share purchase warrants; and a net smelter
return royalty to Vista payable as follows: -- Within five days of
receiving approval of the TSX Venture Exchange, Luzon will issue to
Vista 3,000,000 Luzon common shares and 1,000,000 warrants, each
warrant entitling the holder to acquire one common share of Luzon
at an exercise price of CDN $0.20 for a period of three years from
the date of issuance, and, on the earlier of December 31, 2005 or
the date of the closing of the next debt, equity or other financing
completed by Luzon after July 15, 2005, Luzon will pay to Vista
U.S. $100,000 in cash. -- Within five days of the date that is the
earlier of December 31, 2006 or the date Luzon completes or obtains
financing sufficient to commence construction at the Amayapampa
Project, Luzon will pay to Vista U.S. $2,500,000. -- In the event
that Luzon completes a feasibility study or technical report for
the Amayapampa Project that discloses recovered gold of more than
400,000 ounces, Luzon shall issue to Vista an additional 1,000,000
common shares. -- If Luzon completes the acquisition of the
Amayapampa Project, Luzon will grant Vista a net smelter return
royalty as follows: (i) on the first 440,000 ounces of gold
production, a 4.5% net smelter return royalty where the gold price
is less than U.S. $450 per ounce and a 5.5% net smelter return
royalty where the gold price is U.S. $450 per ounce or more, and
(ii) thereafter, a 1.0% net smelter return royalty. In addition,
effective from July 29, 2004, Luzon will pay all costs associated
with holding and maintaining the Amayapampa Project, including
reimbursement of outlays made by Vista (approximately U.S. $51,000,
as of June 30, 2005). Other terms of the agreement remain
unchanged. Mike Richings also commented on the new board of
directors and management structure at Luzon: "We believe the recent
changes in Luzon's board of directors and management, including the
appointment of Scottish financier Mr. Willie McLucas as Chairman,
will re-energize the company and will lead to the financing and
early development of the Amayapampa Project." Vista Gold Corp.,
based in Littleton, Colorado, evaluates and acquires gold projects
with defined gold resources. Additional exploration and technical
studies are undertaken to maximize the value of the projects for
eventual development. The Corporation's holdings include the
Maverick Springs, Mountain View, Hasbrouck, Three Hills, Wildcat
projects and Hycroft mine, all in Nevada, the Long Valley project
in California, the Yellow Pine project in Idaho, the Paredones
Amarillos and Guadalupe de Los Reyes projects in Mexico, and the
Awak Mas project in Indonesia. The statements that are not
historical facts are forward-looking statements involving known and
unknown risks and uncertainties that could cause actual results to
vary materially from targeted results. Such risks and uncertainties
include those described from time to time in the Corporation's
periodic reports, including its latest annual report on Form 10-K
filed with the U.S. Securities and Exchange Commission. The
Corporation assumes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise. DATASOURCE: Vista Gold Corp. CONTACT:
Greg Marlier of Vista Gold Corp., +1-720-981-1185 Web site:
http://www.vistagold.com/
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