DENVER, Oct. 7, 2013 /CNW/
- Vista Gold Corp. ("Vista" or the "Company") (NYSE MKT and TSX:
VGZ) today announced that it has signed a binding agreement to sell
its debt and equity participation in the Los Cardones gold project
in Baja
California Sur, Mexico, to the Invecture Group
("Invecture") for US$13 million.
The Los Cardones gold project (formerly known as Paredones
Amarillos) is subject to a 2012 earn-in agreement between Invecture
and Vista whereby Invecture could earn a 62.5% interest in the
project by completing certain activities. The agreement announced
today will result in the termination of that earn-in agreement and
the sale of 100% of its debt and equity participation in the
project to Invecture for US$13 million (US$7 million of
which will be paid at closing and US$6 million of
which will be paid in January 2014).
The agreement provides that Invecture has the option to elect, in
its discretion, to not make the second payment of US$6 million; in
which case, Vista will retain the US$7 million
already paid and the project. The transaction is subject to a
number of conditions, including receipt of any required regulatory
approvals. The agreement provides that the parties will execute the
definitive documentation with respect to the sale of the project by
October 16,
2013, or such other date mutually agreed to by the
parties.
Proceeds from the completed sale are anticipated to fund Vista's
operations substantially through 2014. Approximately half of the
proceeds will be used to reduce the outstanding balance of Vista's
term loan with Sprott Resource Lending Partnership, resulting in an
expected reduction of Vista's monthly interest payments by
Cdn$40,000.
Frederick H.
Earnest, President and Chief Executive Officer, said,
"The sale of the Los Cardones gold project is consistent with
Vista's strategy to raise capital through the sale of non-core
assets. This transaction preserves our shareholders' exposure and
leverage to Vista's two core assets (the Mt. Todd gold project and
Vista's ownership of Midas Gold Corp.) without diluting our
shareholders."
Vista continues to list its Colomac mill equipment for sale
through AM King Industries. A successful sale could provide
sufficient additional capital for Vista to fund itself beyond 2014,
complete the Feasibility Study of the Mt. Todd gold project, and
fully repay its term loan with Sprott.
About Vista Gold Corp.
Vista is a gold company
currently conducting a strategic review of its portfolio of gold
assets, and is focused on advancing its flagship Mt. Todd gold
project in Northern Territory, Australia.
Vista's portfolio of assets also includes a 24.9 % holding in Midas
Gold Corp., the Guadalupe de los Reyes gold/silver project in
Mexico (a preliminary economic
assessment was completed in March 2013), the Awak Mas gold project in
Indonesia (One Asia Resources Ltd.
working to earn an 80% interest), the Long Valley gold project in
California and a royalty on the
Amayapampa gold project in Bolivia (being advanced by LionGold).
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, completion of the sale of the Los Cardones gold project, the
termination of the earn-in right agreement, the use of proceeds
from such sale (the expected results of such use of proceeds), the
impact of the potential sale of the Colomac mill equipment, 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:
mineral reserve estimates, terms and conditions of our agreements
with contractors and our approved business plans, management's
assessment of potential transactions and strategic options, and the
Company's ability to cut costs and improve liquidity. When used in
this press release, the words "optimistic," "potential,"
"indicate," "expect," "intend," "plans," "hopes," "believe," "may,"
"will," "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,
ability to settle definitive agreement to sell the Los Cardones
gold project, ability to obtain any necessary regulatory approvals
for such transaction, reliance on Invecture to complete its
obligations under its agreements with Vista, uncertainty of
resource and reserve estimates, estimates of results based on such
resource and reserve 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 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 "Note Regarding
Forward-Looking Statements" and "Risk Factors" in Vista's Annual
Report Form 10-K as filed on March 14, 2013 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.