Columbus Gold Signs US$30 Million Definitive Option Agreement With Nord Gold on 5.37 Million Oz. Montagne d'Or Gold Deposit, ...
14 Marzo 2014 - 7:00AM
Marketwired
Columbus Gold Signs US$30 Million Definitive Option Agreement With
Nord Gold on 5.37 Million Oz. Montagne d'Or Gold Deposit, French
Guiana
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Mar 14, 2014) -
Columbus Gold Corp. (TSX-VENTURE:CGT) ("Columbus Gold") is pleased
to announce that it has executed the definitive option agreement
(the "Agreement") with major gold producer Nord Gold N.V.
contemplated in the binding letter of intent dated September 17,
2013 under which Nord Gold has been granted the right to earn a
50.01% interest in certain licences at Columbus Gold's 100% owned
Paul Isnard gold project in French Guiana, which host the 5.37
million ounce Montagne d'Or gold deposit (the "Project").
Pursuant to the terms, Nord Gold must pay US$4.2 million in cash
to Columbus Gold no later than May 21, 2014. The US$4.2 million
payment is mandatory and is not subject to any conditions. In
addition, during the earn-in period, Columbus Gold is the operator
and benefits from a 10% management fee on certain expenditures; the
2014 work program at the project is budgeted at US$11.8
million.
Robert Giustra, CEO of Columbus Gold, commented on the terms of
the deal in September 2013: "This agreement is exceptional not only
by its requirement for an experienced and world class mine
developer to fund a considerable amount of spending but also for
the fact that Columbus Gold shareholders retain half the project at
feasibility. In addition, the deal provides Columbus Gold with the
option to participate in mine construction or to delegate it to
Nord Gold for a resulting significant and valuable equity interest
for Columbus Gold shareholders in a large producing mine."
A 26,600 meter, 135 hole drilling program is currently underway
at Montagne d'Or which contains a NI 43-101 compliant inferred gold
resource using a cut-off grade of 0.3 g/t of 5.37 million ounces of
gold within 117.1 million tonnes at an average grade of 1.43 g/t.
Using a cut-off of 1 g/t the deposit hosts 4.15 million ounces of
gold within 58.1 million tonnes at an average grade of 2.22 g/t.
For additional details, please refer to the Technical Report (as
defined below).
Nord Gold may earn a 50.01% interest in the Project by
completing a bankable feasibility study (the "BFS") and by
expending not less than US$30 million in 3 years in staged work
expenditures, which includes the requirement for Nord Gold to pay
Columbus Gold US$4.2 million in cash no later than May 21, 2014. If
Nord Gold earns its interest it will take ownership of 50.01% of
the shares of SOTRAPMAG S.A.S. ("SOTRAPMAG"), the wholly owned
French subsidiary of Columbus Gold that owns the Project and
Columbus Gold will retain a 49.99% interest. SOTRAPMAG will be the
joint venture company. In the event that SOTRAPMAG decides to
advance the Project to mine construction and commercial production,
Columbus Gold may elect to fund SOTRAPMAG pro-rated to its 49.99%
interest or allow Nord Gold to solely fund, whereby Columbus Gold's
interest would be diluted pursuant to a straight-line formula. The
initial deemed value of each party's interest in SOTRAPMAG, which
affects the rate of dilution, will vary based on the ounces of
proven & probable reserves estimated in the BFS (the "Ounces").
For example, pursuant to the formula, 2 million Ounces would
require Nord Gold to spend approximately US$160 million to dilute
Columbus Gold to a 25% interest; 3 million Ounces would require
Nord Gold to spend approximately US$210 million to dilute Columbus
Gold to a 25% interest; and 4.5 million Ounces would require Nord
Gold to spend approximately US$270 million to dilute Columbus Gold
to a 25% interest. In the event that SOTRAPMAG decides not to move
forward to mine construction and commercial production within 4.5
months after completion of the BFS, Nord Gold must offer 0.01% of
SOTRAPMAG to Columbus Gold for a determinable price and each party
will then hold 50% of SOTRAPMAG.
During the option period, Nord Gold has agreed to a standstill
under which it will not obtain 20% or greater of the outstanding
voting securities of Columbus Gold, will not solicit proxies from
Columbus Gold's shareholders, will not attempt to engage in
discussions respecting fundamental transactions involving Columbus
Gold, and will vote any securities it holds in favour of management
proposals put forward by Columbus Gold.
The Agreement is subject to receiving confirmation from the
French government that it has no objection to the option. The
Agreement contains other provisions standard for an option
agreement, including an area of interest, force majeure extensions
and termination provisions. A copy of the Agreement will be
available in due course on Columbus Gold's SEDAR profile at
www.sedar.com.
ABOUT NORD GOLD
Nord Gold (LSE:NORD) is publicly traded on the London Stock
Exchange and is an international pure-play emerging-markets gold
producer established in 2007. Nord Gold has expanded rapidly
through acquisitions and organic investment, achieving a rate of
growth unmatched in the industry during that period. In 2013, Nord
Gold's gold production was 924,000 oz. It operates nine mines in
Russia, Kazakhstan, Burkina Faso and Guinea. Nord Gold has one
development project, four advanced exploration projects and a
diverse portfolio of early exploration projects and licenses in CIS
and West Africa. Nord Gold employs over 10,000 workers on two
continents.
Rock Lefrançois, P.Geo. (OGQ), Columbus Gold's Chief Operating
Officer and Qualified Person under National Instrument 43-101, has
reviewed and approved the technical content of this news release.
For additional technical details on the Project, please see the
technical report "Paul Isnard, French Guiana, Mineral Resource
Estimate, NI 43-101 Technical Report" with an effective date of
November 23, 2012 (the "Technical Report"), filed on Columbus
Gold's SEDAR profile at www.sedar.com on March 14, 2013.
For more information regarding the letter of intent dated
September 17, 2013, please see Columbus Gold's news release of
September 18, 2013.
ON BEHALF OF THE BOARD,
Robert F. Giustra, Chairman & CEO
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This release contains forward-looking information and
statements, as defined by law including without limitation Canadian
securities laws and the "safe harbor" provisions of the US Private
Securities Litigation Reform Act of 1995 ("forward-looking
statements"), respecting the option, the earn-in conditions, the
BFS, the payment of US$4.2 million, advancement of project to mine
construction and possible sale of 0.01% interest thereafter, the
standstill, and the other conditions under the Agreement.
Forward-looking statements involve risks, uncertainties and other
factors that may cause actual results to be materially different
from those expressed or implied by the forward-looking statements,
including without limitation that the French government may object
to the option, Nord Gold may not decide to exercise the option;
that Nord Gold may not have resources available to exercise the
option; that a BFS may not be able to be prepared on the terms
required under the Agreement; whether or not SOTRAPMAG will decide
to move the Project to mine construction; whether a party's
interest in SOTRAPMAG will be diluted; whether the standstill
provisions will be followed and, if not, whether they are
enforceable; that the condition underlying the Agreement may not be
able to be completed in a timely fashion or at all; the ability to
acquire necessary permits and other authorizations; the feasibility
of taking the Project into production; the number of Ounces
delineated in the BFS; that production may never occur at the Paul
Isnard Project; environmental compliance; cost increases;
availability of qualified workers and drill equipment; competition
for mining properties; risks associated with exploration projects,
mineral reserve and resource estimates (including the risk of
assumption and methodology errors); dependence on third parties for
services; non-performance by contractual counterparties; title
risks; and general business and economic conditions.
Forward-looking statements are based on a number of assumptions
that may prove to be incorrect, including without limitation
assumptions: that the French government will not object to the
option; that Nord Gold will decide to exercise the option; that
Nord Gold will have sufficient resources to keep the option in good
standing and to ultimately exercise it; that a BFS will be able to
be prepared on the terms and conditions set out in the Agreement;
that the dilution formula will operate as set out in this release
and in the Agreement; that SOTRAPMAG will decide to move the
Project to mine construction and commercial production; that the
standstill provisions will be followed and that they will be
enforceable; that the conditions underlying the Agreement will be
completed in a timely fashion; that general business and economic
conditions will remain consistent; that the timing and receipt of
required approvals will be timely in connection with the Agreement;
that financing, if required, will be available; power prices;
ability to procure equipment and supplies including without
limitation drill rigs will be positive; and that ongoing relations
with employees, partners and joint venturers will remain
consistent. Although Columbus Gold has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Columbus Gold undertakes no obligation to update forward-looking
statements if circumstances or management's estimates or opinions
should change except as required by applicable law. The reader is
cautioned not to place undue reliance on forward-looking
statements.
Columbus Gold CorporationInvestor Relations604-634-0970 or
1-888-818-1364info@columbusgroup.comwww.columbusgroup.com
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