Vista Gold Corp. Amends Guadalupe de los Reyes Option Agreement to Accelerate Payment Date and Monetize Royalties
16 June 2020 - 1:08AM
Vista Gold Corp. (NYSE American and TSX: 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., it has entered into an amendment
to the option agreement dated October 23, 2017 (“Amendment
Agreement”) for the Guadalupe de los Reyes gold / silver project in
Sinaloa, Mexico (“Los Reyes”). The Amendment Agreement accelerates
the due date for the final $1.5 million option payment to Vista and
provides for an additional $2.1 million payable to Vista in lieu of
being granted certain royalties and back-in rights.
Pursuant to the Amendment Agreement, Prime
Mining Corp. (“Prime Mining”) has agreed to accelerate the due date
for the final $1.5 million option payment to Vista from October 23,
2021 to not later than September 30, 2020 (the “Purchase Price
Payment Date”). Prime Mining further agrees to pay Vista an
additional $2.1 million through two payments of:
- $1,100,000 no later than six months from the Purchase Price
Payment Date, and
- $1,000,000 no later than 12 months from the Purchase Price
Payment Date.
If Prime Mining fails to make the two payments,
Vista will have the right to reinstate its royalties and back-in
right.
Frederick H. Earnest, President and Chief
Executive Officer, commented, “We are pleased with the acceleration
of the due date for the last option payment and this opportunity to
monetize the royalties and back-in right at Los Reyes. In addition
to cash proceeds of $2.4 million from the recent Awak Mas
transaction, Vista now has agreements in place to realize up to
$6.1 million over the next 16 months from Awak Mas and Los Reyes.
Monetizing our non-core assets has generated working capital
without significant dilution to our shareholders and retained
greater leverage to the value of Mt Todd as we achieved important
permitting milestones and improvements in the efficiency and
economic potential of the project. We believe these achievements
coupled with the improved gold price position Mt Todd as one of the
most compelling development opportunities in the gold sector.”
All dollar amounts in this press release are in
U.S. dollars.
About Vista Gold Corp.
The Company is a gold project developer. The
Company’s flagship asset is the Mt Todd gold project in Northern
Territory, Australia. Mt Todd is the largest undeveloped gold
project in Australia and if developed as presently designed, would
potentially be Australia’s 6th largest gold producer on an annual
basis.
For further information about Vista or the Mt
Todd Gold Project, please contact Pamela Solly, Vice President of
Investor Relations, at (720) 981-1185 or visit the Company’s
website at www.vistagold.com to access important information,
including the current Technical Report.
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
expectation that we will receive $1,500,000 no later than September
30, 2020, $1,100,000 no later than six months from September 30,
2020, and $1,000,000 no later than 12 months from September 30,
2020, our ongoing efforts to monetize non-core assets and seek
development of Mt Todd to potentially be Australia’s 6th largest
gold producer and our belief that Mt Todd is one of the most
compelling development opportunities in the gold sector 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 Prime Mining, our reliance that Prime Mining will
be able to raise funds to finance its business plans; 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 February 26, 2020 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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