DENVER, Jan. 16, 2014 /CNW/
- Vista Gold Corp. (TSX & NYSE MKT: VGZ) ("Vista" or the
"Company") today announced that it has signed a non-binding letter
of intent (the "LOI") to option its interest in the Guadalupe de
los Reyes gold and silver project in Sinaloa,
Mexico (the "GdlR Project") to Cangold Limited
("Cangold").
The LOI provides that a non-refundable US$50,000 payment
be made to Vista for which Cangold will have a 90 day period of
exclusivity (the "Exclusivity Period") to complete due diligence
and negotiate and enter into a definitive option agreement with
Vista (the "Option Agreement").
The LOI contemplates that the Option Agreement (if entered into)
will provide that Cangold may earn a 70% interest in the GdlR
Project by:
- making payments totaling US$5,000,000 in five payments over a
three-year period, with payments totaling US$1,000,000 in the
first year, US$1,500,000 in the second year and
US$2,500,000 in the third year;
- operating the GdlR project, maintaining the concessions
comprising the GdlR Project in good standing; and
- fulfilling all of the obligations of Vista's wholly-owned
subsidiary, Minera
Gold Stake, S.A. de C.V. ("MGS") to the Ejido La
Tasajera (the "Ejido") as set out in the temporary
occupation contract between MGS and the Ejido.
The Option Agreement is expected to further provide that all
cash payments are non-refundable and optional to Cangold, and in
the event Cangold fails to pay any of the required amounts on the
scheduled dates or fails to comply with its other obligations, the
Option Agreement will terminate and Cangold will have no interest
in the GdlR Project. Provided it is not in breach of the Option
Agreement, Cangold may at its discretion advance the above payment
schedule and exercise the initial option for a 70% interest in the
GdlR Project any time during the three-year period.
Subject to Cangold earning a 70% interest in the GdlR Project,
pursuant to the Option Agreement Cangold will be granted an
additional option to earn the remaining 30% interest in the GdlR
Project, by notifying Vista of a production decision and by making
a cash payment to Vista of US$3,000,000 plus an additional cash
payment based on a formula that includes the growth, if any, in
estimated NI 43-101 compliant Measured and Indicated mineral
resources of the GdlR Project, and the then prevailing spot gold
price ("Escalator Payment").
Should Cangold determine not to put the GdlR Project into
production, the Option Agreement will provide Vista the right to
buy back Cangold's 70% interest in the GdlR Project for a cash
payment of US$5,000,000 plus an additional cash
payment based on the same formula for the Escalator Payment
described above. If Vista does not exercise its buyback option,
Vista will still retain a right of first refusal should Cangold
elect to sell its 70% interest in the GdlR Project to a third
party.
The Option Agreement will also contain terms to provide that
Cangold will be the operator of the GdlR Project and set forth the
responsibilities and obligations of Cangold in this respect.
Cangold is a junior exploration company engaged in the
exploration and development of gold projects in Mexico and
Canada. Cangold trades on the TSX
Venture Exchange under the symbol CLD.
The LOI and the Option Agreement are subject to the approval of
the TSX Venture Exchange and to the Board of Directors of Cangold
and Vista.
About Vista Gold Corp.
Vista's principal assets
include its flagship Mt. Todd gold project in Northern Territory,
Australia, and a 24.9% holding in Midas
Gold Corp. In addition to non-core projects in Mexico and
California, Vista holds royalty
interests in projects in Bolivia and Indonesia.
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 the successful completion of Cangold's due
diligence review of the GdlR Project, the negotiation and execution
of the Option Agreement within the Exclusivity Period, the terms
and conditions of the Option Agreement, Cangold complying with its
obligations under the LOI and the Option Agreement (including
making contemplated payments and maintaining the concessions),
Cangold's potential decision to put the GdlR project into
production, approval of the Option Agreement by the TSX Venture
Exchange and the respective board of directors of the parties 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:
ability of Cangold to make payments contemplated in the LOI and the
Option Agreement, approved business plans, anticipated and
estimated costs and budget expenditures to continue to optimize and
advance the Company's core assets, the perceived extent and
duration of the current weakness of gold equity securities and
other such matters. When used in this press release, the words
"optimistic," "potential," "indicate," "expect," "intend," "hopes,"
"believe," "may," "will," "if," "anticipate," "would," "could," 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, risks relating to
Cangold's ability to obtain financing (if at all), risks related to
Cangold's determination to put the GdlR Project into production,
uncertainty of resource estimates, estimates of results based on
such resource 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
approval of the environmental impact statement and the necessary
permits for the Mt. Todd gold project, 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.