DENVER, Feb. 23, 2011 /PRNewswire/ -- Vista Gold
Corp. ("Vista", TSX & NYSE Amex Equities: VGZ) and Midas
Gold, Inc. ("Midas", a private Washington company) today announced that Midas
and certain of Vista's US subsidiaries have executed a Combination
Agreement ("the Combination Agreement") whereby they will
contribute their respective Idaho
gold assets through a share exchange and contribution to Midas Gold
Corp., a new Canadian private company ("Midas Gold"). If the
plan of share exchange is approved by the shareholders of Midas,
and all other conditions to the transaction are satisfied or
waived, Midas Gold will be owned, on a fully diluted basis, 65% by
Midas and 35% by Vista.
"We believe the combination of Vista's and Midas' Idaho gold assets is the first step towards
fully valuing our holdings in the Stibnite-Yellow Pine gold
district," said Mike Richings,
Executive Chairman & CEO of Vista. "The combined holdings
will create a company with sizeable gold deposits and district
exploration potential. Advancement of our Yellow Pine and the Midas properties will be
the sole focus of Midas Gold under the very capable leadership of
Mr. Stephen Quin. Vista has
been successful with similar asset rationalization strategies in
the past and we believe our shareholders will benefit from Vista
US' shareholding in Midas Gold and Midas Gold's focused exploration
of these assets."
"The Combination Agreement with Vista will finally consolidate
the Stibnite-Yellow Pine gold district under one company, which
should allow for the first systematic evaluation of gold potential
in the district, unconstrained by artificial property boundaries,"
said Stephen Quin, President &
CEO of Midas Gold. "Midas will be contributing the Hangar Flats and
West End gold deposits, with their significant estimated gold
mineral resources, along with its significant and highly
prospective land holdings, to Midas Gold, while Vista is
contributing Yellow Pine, the
largest gold deposit in the district," he said. "In addition,
considerable upside exploration potential remains, with
opportunities to expand all three known gold deposits along strike
and to depth. Further, there is potential to discover
entirely new deposits, based on information contained within an
extensive exploration database covering Midas' extensive land
holdings in the district."
Combination Agreement
The reorganization of the ownership of the Stibnite-Yellow Pine
gold district will be effected pursuant to the Combination
Agreement among Midas, Midas Gold , Vista's wholly-owned
subsidiary, Vista Gold U.S. Inc, a Delaware corporation ("Vista US") and its
wholly owned subsidiary, Idaho Gold Resources, LLC, an Idaho limited liability company ("Idaho
Gold"), assuming the plan of share exchange is approved by the
shareholders of Midas at a special meeting and all of the other
conditions to the closing of the reorganization are satisfied or
waived. Following the execution of the Combination Agreement,
Midas will hold a special meeting of its shareholders (the "Special
Meeting"). The purpose of the Special Meeting is to consider
and approve a plan of share exchange (the "Plan of Share Exchange")
between Midas and Midas Gold pursuant to which Midas' outstanding
shares of common stock (the "Midas Shares") and outstanding options
(the "Midas Options"), other than Midas Shares held by dissenting
shareholders, will be exchanged for common shares and options of
Midas Gold (the "Midas Gold Shares" and "Midas Gold Options",
respectively), with the result that Midas will become a
wholly-owned subsidiary of Midas Gold.
The Plan of Share Exchange is part of a broader, integrated
transaction undertaken pursuant to the terms of the Combination
Agreement, pursuant to which, if the Plan of Share Exchange is
approved at the Special Meeting and the other conditions to closing
specified in the Combination Agreement are satisfied or waived:
- Vista US will: (a) organize Idaho Gold Holding Company, as a
wholly-owned Idaho corporation
("Idaho Holdco"); (b) contribute its equity interests in Idaho Gold
to Idaho Holdco, and (c) at closing, contribute all of the issued
and outstanding shares of common stock of Idaho Holdco to Midas
Canada as a capital contribution, in exchange for that number of
Midas Gold Shares equal to, on a fully diluted basis, thirty-five
percent (35%) of the Midas Gold Shares that are issued and
outstanding at the time the transactions specified in the
Combination Agreement and the Plan of Exchange are completed;
- The shareholders of Midas, other than any dissenting
shareholders, will contribute their Midas Shares to Midas Gold in
exchange for that number of Midas Gold Shares equal to, on a fully
diluted basis, sixty-five percent (65%) of the Midas Gold Shares
that are issued and outstanding at the time the transactions
specified in the Combination Agreement and the Plan of Exchange are
completed; and
- The holders of Midas Option will exchange their Midas Options
for Midas Gold Options of like tenor.
About the Golden Meadows Project
The Stibnite-Yellow Pine gold district lies at the intersection
of major regional fault systems and lies on the margin of the
western ring fracture margin of the tertiary Thunder Mountain
caldera complex. Gold mineralization within the Golden
Meadows Project appears to be related to an intrusion-related,
gold-rich system overprinted by a younger, epithermal gold system
with increased silver and antimony. Historic gold production
from the district is estimated at approximately one million ounces,
primarily from underground, higher-grade gold-antimony production
at Hangar Flats from 1925-38, open pit mining at Yellow Pine from 1938-52, and from heap
leaching of oxide gold occurrences, including West End,
Garnet Creek and Homestake, from
1974 to 1997. The deeper sulphide gold potential has seen
little modern exploration. The principal gold deposits identified
to date within the Golden Meadows Project are Midas' Hangar Flats
and West End deposits, and Vista's Yellow
Pine deposit, all of which are associated with significant
structural corridors. In addition, numerous other gold
targets have been identified, with potential for both shallow oxide
mineralization and deeper sulphide potential.
The independent resource estimate for the Yellow Pine deposit was initially announced by
Vista on November 19, 2003, and the
"Yellow Pine Project, Idaho,
USA, Technical Report" was filed on SEDAR on
December 12, 2003. Vista
subsequently incorporated those mineral resources in the
"Preliminary Assessment of the Yellow Pine Project, Yellow Pine, Idaho" filed on SEDAR on
December 15, 2006. Both
documents are filed under Vista's profile on SEDAR
(www.sedar.com).
Since the filing of the 2006 preliminary assessment for
Yellow Pine, there has been no
drilling within the area of the mineral resource estimate for
Yellow Pine. As part of the combination of the Midas and
Vista properties, Midas has retained SRK Consulting (US) Inc.
("SRK") to complete a new NI 43-101 compliant mineral resource
estimate for the Yellow Pine
deposit using similar technical parameters as those used for the
Midas properties. Given that Midas has recovered additional
historic data, the different approaches to the estimation of
mineral resources and current economic conditions used by SRK,
combined with the lack of recent drilling at Yellow Pine, the mineral resource estimate for
Yellow Pine may change.
Further, SRK is likely to require some additional confirmatory
drilling at Yellow Pine before it
can classify the deposit in the indicated or measured
categories. Therefore, following the combination, some or all
of the mineral resources at Yellow
Pine are expected to be reclassified into the inferred
category until Midas Gold completes the confirmatory drilling
during the summer of 2011. It is anticipated that SRK will
complete its new mineral resource estimate for the Yellow Pine deposit by the end of March 2011.
As noted in the February 22, 2011
news release by Midas, all three deposits in the Stibnite-Yellow
Pine gold district remain open to expansion with opportunities to
expand all three known gold deposits along strike and to depth.
Further, there is potential to discover entirely new deposits
based on information contained within an extensive exploration
database.
About Vista Gold Corp.
Vista is focused on the development of the Mt. Todd gold project
in Northern Territory, Australia,
and the Concordia gold project in
Baja California Sur, Mexico, to
achieve its goal of becoming a gold producer. Vista's other
holdings include the Guadalupe de los Reyes gold project in
Mexico, the Yellow Pine gold project in Idaho, the Awak Mas gold project in
Indonesia, and the Long Valley
gold project in California. For
more information about our projects, including technical studies
and resource estimates, please visit our website at
www.vistagold.com.
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, estimates of mineral resources, the conversion of inferred
mineral resources to measured and indicated resources, the
conversion of mineral resources to mineral reserves, the potential
to expand the resource base at the Yellow
Pine gold project, the timing for completion and expected
results of the 43-101 resource estimate by Midas relating to its
properties in the District, potential gold resources at the
Yellow Pine gold project and on
Midas properties located in the District, the entering into a
definitive agreement with Midas, the extinguishment of the 5% net
smelter returns royalty on the Yellow
Pine gold project, the timing for the completion of the
definitive agreement and completion of the proposed transaction,
the potential upsize resulting from the combination of the
Yellow Pine gold project with
Midas' assets in the District, the quantum of the potential value
realization, if any, resulting from the proposed transaction, and
other such matters are forward-looking statements and
forward-looking information. When used in this press release,
the words "optimistic," "potential," "indicate," "expect,"
"intend," "hopes," "believe," "may," "will,", "could", "if,"
"anticipate," 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, negotiating a satisfactory definitive agreement, timing for
completing the definitive agreement, obtaining board and regulatory
approvals, tax consequences of the proposed combination, the
ability to find and hire an appropriate management team for Midas
Gold, the ability to integrate the operations of Midas Gold,
uncertainty of resource estimates, estimates of results based on
such resource estimates; risks relating to cost increases for
capital and operating costs; risks relating to delays in the
completion of the drilling program, risks related to the adequacy
of the design of the drilling program, risks related to the ability
to obtain the necessary permits, 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 "Uncertainty of
Forward-Looking Statements" and "Risk Factors" in Vista's latest
Annual Report on Form 10-K as filed on March
16, 2010, and Quarterly Report on Form 10-Q, as filed
November 9, 2010, 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.
Without limiting the foregoing, this press release uses terms
that comply with reporting standards in Canada and certain estimates are made in
accordance with NI 43-101. NI 43-101 is a rule developed by the
Canadian Securities Administrators that establishes standards for
all public disclosures an issuer makes of scientific and technical
information concerning mineral projects. All mineral resource
and reserve estimates contained in this press release, including
the terms "measured mineral resources," "indicated mineral
resources" and "inferred mineral resources" have been prepared in
accordance with NI 43-101, and these standards differ significantly
from the requirements of the United States Securities and Exchange
Commission ("SEC"). "Inferred resources" have a great amount
of uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred resource will ever be upgraded to a
higher category. The SEC normally only permits issuers to report
mineralization that does not constitute SEC Industry Guide 7
compliant "reserves" as in-place tonnage and grade without
reference to unit measures. The resource information
contained in this press release is not comparable to similar
information disclosed by U.S. companies. U.S. investors are
cautioned not to assume that any part or
all of mineral deposits in these categories
will ever be converted into SEC Industry Guide 7
reserves.
For further information, please contact Connie Martinez at (720) 981-1185, or visit the
Vista Gold Corp. website at www.vistagold.com.
SOURCE Vista Gold Corp.