Feb. 7, 2012
/PRNewswire/ -- Vista Gold Corp. (TSX & NYSE Amex Equities: VGZ) ("
" or the "
") is pleased to announce that it has entered into an Earn-in Right Agreement (the "
-based Invecture Group, S.A. de C.V. ("
") with respect to Vista's
gold project in
Baja California Sur
, Mexico. Invecture is the owner of Frontera Copper Corporation, which owns and operates the Piedras Verdes Copper Mine in the Mexican State of Sonora. A conference call with management to discuss this transaction is scheduled for
Monday, February 13, 2012
11:00 a.m. MST
Vista holds the
gold project through its wholly-owned, Mexican subsidiary, Desarrollos Zapal, S.A. de C.V. ("
"). Under the terms of the Agreement, Invecture has agreed to make a non-refundable payment of
in exchange for the right to earn a 60% interest (subject to adjustment) in DZ Mexico (the "
"). The Earn-in Right will expire if not exercised by
February 7, 2014
, subject to extension in certain circumstances (the "
"). The Agreement provides that during the Earn-in Period, Invecture will, at its sole expense, manage and operate the
gold project and will undertake all commercially reasonable efforts to obtain the Change of Forest Land Use Permit ("
") and the Authorization of Environmental Impact which are required to develop the project. Invecture has advised that it will secure
in project debt finance to construct the
gold project after it has exercised the Earn-in Right and after a project development decision has been made. Once Invecture has earned its interest in the
gold project, the parties have agreed to evaluate market conditions with regard to the future organization and ownership structure of DZ Mexico.
Commenting on this transaction with Invecture,
, President and CEO of Vista, said, "Our team in
has worked hard to advance the
gold project. This investment by Invecture represents a vote of confidence that the
gold project represents an excellent opportunity to develop a new mine that we expect will make an important contribution to employment and to the economy in Baja California. We and Invecture believe that the environmental impacts of the development of a mine can be limited and that the benefits to the state and local communities will far outweigh these concerns. We believe Invecture's in-country experience, financial strength, and committed management team make Invecture an excellent strategic partner to take the lead in securing the authorizations and financing required to bring
The Agreement provides that the exercise of the Earn-in Right by Invecture is conditional upon, among other things: (i) receipt of the CUSF and the Authorization of Environmental Impact; (ii) the completion of a feasibility report on the
gold project which updates the existing feasibility report with respect to costs; (iii) Invecture funding the
gold project during the Earn-in Period; and (iv) Invecture making an additional payment of
to DZ Mexico, which amount will be used to repay intercompany loans owed by DZ Mexico to Vista.
During the Earn-in Period and subject to the terms of the Agreement, Vista will hold 40% of the DZ Mexico shareholder voting rights. The remaining 60% of the DZ Mexico shareholder voting rights will be held in a trust that will be instructed by representatives from Vista and Invecture. Upon Invecture's exercise of the Earn-in Right, Vista will continue to hold a 40% interest (subject to adjustment) in DZ Mexico and the
As part of the Agreement, DZ Mexico has transferred all of its other material assets, including the mill equipment acquired by Vista for the
gold project in 2008 and the Guadalupe de los Reyes gold/silver project, to other entities in the Vista group of companies. Vista has granted Invecture the option to cause DZ Mexico to acquire the mill equipment for
plus storage, insurance and transportation costs and any applicable taxes. This option is exercisable by Invecture during the first 12 months after the date of the Agreement.
Mr. Earnest went on to conclude, "With Concordia being funded and managed by a very capable Mexican partner, we are able to fully focus our energy and resources on the development of the Mt. Todd gold project in Northern Territory,
, and on the exploration and evaluation of the Guadalupe de los Reyes gold/silver project in
, Mexico. We have drilling programs underway at both of these projects, and in the coming weeks, we expect to announce the results of a definitive feasibility study for the Mt. Todd gold project, which will be a significant milestone in our development of that world class project."
About Vista Gold Corp.
Vista is focused on the development of its Mt. Todd gold project in Northern Territory,
, and its
gold project in
Baja California Sur, Mexico
, to achieve its goal of becoming a gold producer. After the initial public offering of the common shares of Midas Gold Corp. ("
"), Vista held approximately 30% of Midas' common shares. Midas has a large exploration property in
, including the
property previously held by Vista. Vista's other holdings include the Guadalupe de los Reyes gold-silver project in
, the Awak Mas gold project in
and the Long Valley gold project in
. For more information about our projects, including technical studies and resource estimates, please visit Vista's website at
About Invecture Group, S.A de C.V.
Invecture Group holds approximately
in assets, is owned by Mexican investors and owns Frontera Copper Corporation whose principal asset is the
copper mine in the
State of Sonora
, Mexico. It acquired
in 2009 and has executed a significant turnaround in operational, financial and community relationship terms. This included restarting the
to acquire mining equipment, build a crushing, screening and stacking circuit and a major upgrade to the management team.
Management Conference Call
A conference call with management to discuss this transaction is scheduled for
Monday, February 13, 2012
11:00 a.m. MST
Toll-free in North America: 1-866-443-4188International: 1-416-849-6196