DENVER, Oct. 24, 2017 /PRNewswire/ -- Vista Gold
Corp. (TSX & NYSE American: VGZ) ("Vista" or the "Company")
today announced that, together with its wholly-owned subsidiaries
Minera Gold Stake Holdings Corp., Granges Inc. and Minera Gold Stake, S.A. de C.V. ("MGS"), it has
entered into an agreement (the "Option Agreement") to option our
interest in the Guadalupe de los Reyes gold and silver project in
Sinaloa, Mexico (the "GdlR
Project") to Minera Alamos Inc. and its subsidiary Minera Alamos de
Sonora S.A. de C.V. ("Minera
Alamos").
Pursuant to the terms of the Option Agreement, Vista has granted
Alamos an exclusive right and option right to earn a 100% interest
in the GdlR Project by:
- making payments totaling $6,000,000 comprised of a payment of $1,500,000 made at the execution of the Option
Agreement ("Option Grant Date"), two successive payments of
$1,500,000 each to be made at the
one-year and two-year anniversaries of the Option Grant Date; and a
final $1,500,000 payment to be made
before the four-year anniversary of the Option Grant Date;
- maintaining the concessions comprising the GdlR Project in good
standing;
- fulfilling all of the obligations of MGS to the Ejido La
Tasajera (the "Ejido") as set out in the temporary occupation
contract between MGS and the Ejido;
- granting Vista a capped NSR royalty on production from open pit
mining (the "Open Pit NSR") at rates that range from 1% (at gold
prices of $1400/oz or less) to a
maximum of 2% (at gold prices above $1600/oz) up to an aggregate of $2,000,000 in royalty payments;
- granting Vista a perpetual NSR royalty on production from
underground mining (the "Underground NSR") at rates that range from
1% (at gold prices of $1400/oz or
less) to a maximum of 2% (at gold prices above $1600/oz); and
- granting Vista the right to assume a 49% non-carried interest
in an underground project if Minera
Alamos decides to develop an underground mine at the GdlR
Project (the "Back-in Right").
The Option Agreement provides that all cash payments are
non-refundable and optional to Minera
Alamos, and in the event Minera
Alamos fails to pay any of the required amounts as set out
in the Option Agreement, or fails to comply with its other
obligations, the Option Agreement will terminate and Minera Alamos will have no interest in the GdlR
Project. Provided it is not in breach of the Option Agreement,
Minera Alamos may at its discretion
advance the above payment schedule.
Subject to Minera Alamos timely
making all the option payments, and fulfilling its other
obligations with respect to the Option Agreement, Vista will
transfer 100% of the ownership of the GdlR Project to Minera Alamos and the Open-Pit NSR and
Underground NSR will be granted to Vista.
If Minera Alamos discovers, and
decides to develop, an underground mine at the GdlR Project and
Vista exercises the Back-in Right, Vista and Minera Alamos have agreed to form a joint
venture to develop and operate the underground mine. If the
joint venture is formed, the Underground NSR will terminate.
Frederick H. Earnest, Vista's
President and CEO, commented, "We are pleased to have Minera Alamos as a partner in the GdlR Project.
We believe they have the requisite experience and skill to succeed
in Mexico, and we are very
supportive of their commitment to develop the GdlR Project.
"The Option Agreement preserves the upside of the GdlR Project
for Vista shareholders by maintaining exposure to the underground
potential as well as providing near-term non-dilutive strength for
our balance sheet."
All dollar amounts in this press release are expressed in U.S.
dollars.
About Minera Alamos
Minera Alamos is an advanced
stage exploration and development company. Its portfolio of
Mexican projects includes the La
Fortuna open pit gold project in Durango and the Los Verdes open pit
copper-molybdenum project in Sonora.
About Vista Gold Corp.
The Company is a well-funded gold project developer. Our
principal asset is our flagship Mt Todd gold project in Northern
Territory, Australia. Mt Todd is one of the largest known
undeveloped gold projects in Australia. For more information about our
projects, including technical studies and resource estimates,
please visit our website at www.vistagold.com.
For further information, please contact Connie Martinez at (720) 981-1185.
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 we expect or
anticipate will or may occur in the future, including such things
as our belief that Minera Alamos
will have no interest in the GdlR Project if the Option Agreement
terminates; the receipt of any future payments and the grant of the
Open-pit NSR and the Underground NSR pursuant to the terms of the
Option Agreement; the entry into a joint venture agreement on
acceptable terms, if at all, if we exercise the Back-in Right; our
belief that Minera Alamos has the
requisite experience and skills to succeed in Mexico and its committed to developing the
GDLR Project; our belief that we are preserving the upside of the
GdlR Project for Vista shareholders by maintaining exposure to the
underground potential; and our expectation that the transaction
will strengthen our balance sheet 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: our discussions with Minera
Alamos, our approved business plans, exploration and assay
results, results of our test work for process area improvements,
mineral resource and reserve estimates and results of preliminary
economic assessments, prefeasibility studies and feasibility
studies on our projects, if any, our experience with regulators,
and positive changes to current economic conditions and the price
of gold. When used in this press release, the words
"optimistic," "potential," "indicate," "expect," "intend," "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 the Company to
be materially different from any future results, performance or
achievements expressed or implied by such statements. Such
factors include, among others, uncertainty of resource and reserve
estimates, uncertainty as to the Company's future operating costs
and ability to raise capital; risks relating to cost increases for
capital and operating costs; 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 our 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;
uncertainty as to the results of bulk metallurgical test work; and
uncertainty as to completion of critical milestones for Mt Todd; as
well as those factors discussed under the headings "Note Regarding
Forward-Looking Statements" and "Risk Factors" in the Company's
latest Annual Report on Form 10-K as filed on February 22, 2017 and other documents filed with
the U.S. Securities and Exchange Commission and Canadian securities
regulatory authorities. Although we have 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, we assume no obligation
to publicly update any forward-looking statements or
forward-looking information; whether as a result of new
information, future events or otherwise.
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SOURCE Vista Gold Corp.