DENVER, April 15, 2014
/CNW/ - Vista Gold Corp. (TSX & NYSE MKT: VGZ) ("Vista" or the
"Company") today announced that its subsidiary, Minera Gold
Stake, S.A. de C.V. ("MGS"), has entered into an
agreement (the "Option Agreement") to option its interest in the
Guadalupe de los Reyes gold and silver project in Sinaloa,
Mexico (the "GdlR Project") to Cangold Limited
("Cangold").
Pursuant to the terms of the Option Agreement, Vista has granted
Cangold the right to 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$150,000 of which was paid at signing),
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 MGS, Vista's wholly-owned
subsidiary, to the Ejido La Tasajera (the "Ejido") as
set out in the temporary occupation contract between MGS and the
Ejido.
The Option Agreement provides 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,
Vista has granted Cangold 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 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 provides Vista with the right to
buy back Cangold's 70% interest in the GdlR Project for a cash
payment of US$5,000,000 plus 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.
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.
About Vista Gold Corp.
Vista's principal assets include its flagship Mt Todd gold
project in Northern Territory, Australia,
and an 11.2% 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 Cangold complying with its obligations under the Option
Agreement (including making contemplated payments, maintaining the
concessions and complying with MGS' obligations to the Ejido),
Cangold's potential decision to put the GdlR project into
production, Vista's ongoing interest in the GdlR Project 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 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 17,
2014 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.