DENVER, Feb. 23, 2011 /CNW/ -- Consolidates Major Gold District
with 3 Significant Gold Deposits plus Exploration Upside Potential
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: 1. 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; 2. 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
3. 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. Connie Martinez, +1-720-981-1185, for Vista Gold
Corp. Web Site: http://www.vistagold.com
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