Vista Gold Corp. Announces Agreement to Purchase the Mt. Todd Gold Mine, Northern Territory, Australia
01 März 2006 - 2:29AM
PR Newswire (US)
DENVER, Feb. 28 /PRNewswire-FirstCall/ -- Vista Gold Corp. (Amex:
VGZ; TSX) is pleased to announce that it has signed agreements on
March 1 (Australia time) with Ferrier Hodgson, the Deed
Administrators ("Deed Administrators") for Pegasus Gold Australia
Pty Ltd. ("Pegasus"), the government of the Northern Territory of
Australia ("Territory") and the Jawoyn Association Aboriginal
Corporation ("JAAC"), subject to regulatory approval, to purchase
the Mt. Todd gold mine in the Northern Territory, Australia. As
part of the agreements, Vista has agreed to undertake a technical
and economic review of the mine and possibly form one or more joint
ventures with the JAAC. The agreement negotiated with the Deed
Administrators calls for Vista to pay to Pegasus AUD $1,000,000 and
for Vista to receive a transfer of the mineral leases and certain
mine assets together with an assignment of all rights of Pegasus to
the Mt. Todd property. The agreement with the Territory is for an
initial term of five years commencing January 1, 2006, with an
extension of five years at Vista's option and three additional
years possible at the option of the Territory. During the first
year of the term, Vista will undertake a comprehensive technical
and environmental review of the project to evaluate current site
environmental conditions to result in a program to stabilize
environmental conditions and minimize offsite contamination, review
the water management plan with recommendations, and produce a
technical report for the re-start of operations. During the term of
the agreement, Vista will examine all technical economic and
environmental issues, estimate site rehabilitation costs, explore
and evaluate the potential of the project, and prepare a technical
and economic feasibility study for the potential development of Mt.
Todd. Vista will pay the Territory's costs of management and
operation of the Mt. Todd site up to a maximum of AUD $375,000
during the first year of the term, and assume site management and
pay management and operation costs in following years. In the
agreement, the Territory acknowledges its commitment to
rehabilitate the site and that Vista has no rehabilitation
obligations for pre-existing conditions until it submits and
receives approval of a Mine Management Plan for the resumption of
mining operations. Vista has retained MWH, one of the world's
largest engineering firms specializing in environmental sciences,
to assist with the preparation of the environmental review and
water management studies. In addition, Resource Development Inc. of
Colorado, a metallurgical consulting firm, has been retained to
assist with metallurgical testing, process design and process cost
input necessary for the technical review. Recognizing the
importance placed by the Territory upon local industry
participation, Vista has agreed to use, where appropriate, Northern
Territory labor and services during the period of the agreement in
connection with the Mt. Todd property, and further, that when a
production decision is reached, to prepare and execute a local
Industry Participation Plan. The agreement with the JAAC calls for
Vista to issue common shares of Vista with a value of CAD $1.0
million as consideration for the JAAC entering into the agreement
and for rent for the use of the surface overlying the mineral
leases during the period from the effective date until a decision
is reached to begin production. Vista will also pay the JAAC AUD
$5,000 per month in return for consulting with respect to
Aboriginal, cultural and heritage issues. The JAAC will provide
Vista with an office in Katherine (a regional center of population
11,000 approximately 50 kilometers from the mine site) and with
secretarial services for a minimum of AUD $2,000 per month. If the
Mt. Todd project proves feasible for economic development of the
mineral leases including a fully funded site reclamation bond,
Vista will establish a technical oversight committee with
representatives of the Territory and the JAAC. Additionally, Vista
will offer the JAAC the opportunity for joint venture participation
in the operation on a 90% Vista / 10% JAAC basis. For rent of the
surface during production, Vista (or the Joint Venture if formed)
will pay the JAAC an annual amount equal to 1% of the annual value
of production with an annual minimum of AUD $50,000. As part of the
agreement, Vista will endeavor to use services and labor provided
by the JAAC when feasible. Vista and the JAAC may form a 50 / 50
exploration joint venture to explore JAAC lands outside the mineral
leases. Pegasus reported investing over U.S. $200 million to
develop the Mt. Todd mine and operated it from 1993 to 1997, when
the project was closed as a result of technical difficulties and
low gold prices. The Deed Administrators were appointed in December
1997. Pegasus, through the Deed Administrators, sold the mine in
March 1999 to a joint venture comprising Multiplex Resources Pty
Ltd and General Gold Resources Ltd. The mine was operated from 1999
to 2000 by this joint venture. Following cessation of operations in
July 2000, Pegasus, through the Deed Administrators, regained
possession of various mine assets so as to recoup the balance of
the purchase price owed to it. Most of the equipment and plant was
sold in June 2001 and removed from the mine, but the tailings
facility and raw water supply facility remain. In 1995, a resource
estimate for the Batman ore body down to a level of 302 meters
below sea level was prepared by Mining and Resource Technology Pty.
Ltd. ("MRT") for Zapopan NL (a predecessor company to Pegasus). MRT
estimated that, prior to the commencement of mining, the measured
and indicated resources in the Batman deposit were 190.92 million
tonnes at a grade of 0.94 grams per tonne gold and containing 5.75
million ounces of gold. Based on a review of project files, Vista
believes that approximately 24.6 million tonnes grading 1.05 grams
per tonne gold and containing 826,000 ounces of gold were extracted
between 1996 and the termination of mining in 2000. Other resource
estimates have been made in the past, the most recent by General
Gold in March 2000 just prior to mine closure and reflecting
previously mined material. This estimate reported the measured and
indicated resources to a level of 130 meters below sea level (172
meters shallower than the earlier estimate) to be 68 million tonnes
at 0.99 grams per tonne gold and containing 2.17 million gold
ounces (see Note 1). These estimates were prepared using similar
methodologies; involving the preparation of a computer resource
model, in which the volumes of mineralized material were estimated
based on the chemical and statistical analyses of samples obtained
from drill holes, taking into account geology, mineralization and
alteration information obtained from surface mapping and
examination of the drill samples. In the first estimate, 63,190
samples and in the second estimate, 47,029 samples were used from
diamond drill core and percussion drill chip samples. In each
report presenting the estimate, the effectiveness of sampling and
assaying procedures were reviewed. It is important to note that the
estimates reported above were carried out prior to the
establishment of Canadian National Instrument 43-101 standards.
Vista believes the historical estimates were made in accordance
with professional standards existing at the time, but has no way to
judge the validity of these estimates with respect to current
standards of resource estimation. A Qualified Person has not done
sufficient work to qualify these historical estimates as current
mineral resources, and Vista is not treating the estimates as
current mineral resources as defined in sections 1.2 and 1.3 of
Canadian National Instrument 43-101. These estimates should not be
relied upon. Vista intends to prepare a new estimate of mineral
resources in accordance with Canadian National Instrument 43-101
standards and has retained Gustavson Associates of Boulder,
Colorado, to complete the study. Mr. John Rozelle, a Qualified
Person, has visited the site on behalf of Vista and expressed the
opinion that there is adequate data and technical support to
complete a 43-101 compliant estimate. Mike Richings, Vista
President and CEO, stated "We know that the Batman deposit at Mt.
Todd has had significant historical gold resource estimates, and
that the mineral leases acquired by Vista have other discovered and
drilled gold deposits. We intend to proceed with a technical study
to determine the current gold resources on the mineral leases under
Canadian National Instrument 43-101 standards. The Vista team is
very pleased with the working relationships that have been
established with the Jawoyn and the Northern Territory government
and to have reached agreements that work for all parties. In time,
with the right gold price, economic conditions and technology, we
believe the Mt Todd gold mine can be rebuilt and operated
profitably with appropriate environmental safeguards." Vista Gold
Corp., based in Littleton, Colorado, evaluates and acquires gold
projects with defined gold resources. Additional exploration and
technical studies are undertaken to maximize the value of the
projects for eventual development. The Corporation's holdings
include the Maverick Springs, Mountain View, Hasbrouck, Three
Hills, Wildcat projects, the F.W. Lewis, Inc. properties and the
Hycroft mine, all in Nevada, the Long Valley project in California,
the Yellow Pine project in Idaho, the Paredones Amarillos and
Guadalupe de Los Reyes projects in Mexico, the Amayapampa project
in Bolivia and the Awak Mas project in Indonesia. Note 1.
Cautionary Note to U.S. Investors concerning estimates of Measured
and Indicated Resources: This press release uses the terms
"measured and indicated resources." The Corporation advises U.S.
investors that while these terms are recognized and required by
Canadian regulations (under Canadian National Instrument 43-101),
the U.S. Securities and Exchange Commission does not recognize
them. U.S. investors are cautioned not to assume that any part or
all of mineral deposits in these categories will ever be converted
into reserves. Mineral resources that are not "mineral reserves" do
not have demonstrated economic viability. The statements that are
not historical facts are forward-looking statements involving known
and unknown risks and uncertainties that could cause actual results
to vary materially from targeted results. Such risks and
uncertainties include those described from time to time in the
Corporation's periodic reports, including its latest annual report
on Form 10-K filed with the U.S. Securities and Exchange
Commission. The Corporation assumes no obligation to publicly
update any forward-looking statements, whether as a result of new
information, future events or otherwise. For further information,
please contact Greg Marlier at (720) 981-1185, or visit the Vista
Gold Corp. website at http://www.vistagold.com/ DATASOURCE: Vista
Gold Corp. CONTACT: Greg Marlier of Vista Gold Corp.,
+1-720-981-1185 Web site: http://www.vistagold.com/
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