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Vista Gold Corp. ("Vista", TSX & NYSE Amex
Equities: VGZ) and Midas Gold, Inc. ("Midas", a private
Washington company) today announced that Midas and certain of Vista's US
subsidiaries have executed a Combination Agreement ("the Combination
Agreement") whereby they will contribute their respective Idaho gold
assets through a share exchange and contribution to Midas Gold Corp., a new
Canadian private company ("Midas Gold"). If the plan of share
exchange is approved by the shareholders of Midas, and all other conditions
to the transaction are satisfied or waived, Midas Gold will be owned, on a
fully diluted basis, 65% by Midas and 35% by Vista.
"We believe the combination of
Vista's and Midas' Idaho gold assets is the first
step towards fully valuing our holdings in the Stibnite-Yellow Pine gold
district," said Mike Richings, Executive
Chairman & CEO of Vista. "The combined holdings will create a
company with sizeable gold deposits and district exploration potential.
Advancement of our Yellow Pine and the Midas properties will be the sole
focus of Midas Gold under the very capable leadership of Mr. Stephen Quin. Vista has been successful with similar asset
rationalization strategies in the past and we believe our shareholders will
benefit from Vista US' shareholding in Midas Gold and Midas Gold's focused
exploration of these assets."
"The Combination Agreement with
Vista will finally consolidate the Stibnite-Yellow Pine gold district under
one company, which should allow for the first systematic evaluation of gold
potential in the district, unconstrained by artificial property
boundaries," said Stephen Quin, President
& CEO of Midas Gold. "Midas will be contributing the Hangar Flats
and West End gold deposits, with their significant estimated gold mineral
resources, along with its significant and highly prospective land holdings,
to Midas Gold, while Vista is contributing Yellow Pine, the largest gold
deposit in the district," he said. "In addition, considerable
upside exploration potential remains, with opportunities to expand all three
known gold deposits along strike and to depth. Further, there is
potential to discover entirely new deposits, based on information contained
within an extensive exploration database covering Midas' extensive land
holdings in the district."
Combination Agreement
The reorganization of the ownership of
the Stibnite-Yellow Pine gold district will be effected pursuant to the
Combination Agreement among Midas, Midas Gold , Vista's wholly-owned
subsidiary, Vista Gold U.S. Inc, a Delaware corporation ("Vista
US") and its wholly owned subsidiary, Idaho Gold Resources, LLC, an
Idaho limited liability company ("Idaho Gold"), assuming the plan
of share exchange is approved by the shareholders of Midas at a special
meeting and all of the other conditions to the closing of the reorganization
are satisfied or waived. Following the execution of the Combination
Agreement, Midas will hold a special meeting of its shareholders (the
"Special Meeting"). The purpose of the Special Meeting is to
consider and approve a plan of share exchange (the "Plan of Share
Exchange") between Midas and Midas Gold pursuant to which Midas'
outstanding shares of common stock (the "Midas Shares") and outstanding
options (the "Midas Options"), other than Midas Shares held by
dissenting shareholders, will be exchanged for common shares and options of
Midas Gold (the "Midas Gold Shares" and "Midas Gold
Options", respectively), with the result that Midas will become a
wholly-owned subsidiary of Midas Gold.
The Plan of Share Exchange is part of a
broader, integrated transaction undertaken pursuant to the terms of the
Combination Agreement, pursuant to which, if the Plan of Share Exchange is
approved at the Special Meeting and the other conditions to closing specified
in the Combination Agreement are satisfied or waived:
- Vista US will: (a) organize Idaho Gold Holding
Company, as a wholly-owned Idaho corporation ("Idaho Holdco");
(b) contribute its equity interests in Idaho Gold to Idaho Holdco, and
(c) at closing, contribute all of the issued and outstanding shares of
common stock of Idaho Holdco to Midas Canada as a capital contribution,
in exchange for that number of Midas Gold Shares equal to, on a fully
diluted basis, thirty-five percent (35%) of the Midas Gold Shares that
are issued and outstanding at the time the transactions specified in the
Combination Agreement and the Plan of Exchange are completed;
- The shareholders of Midas, other than any
dissenting shareholders, will contribute their Midas Shares to Midas
Gold in exchange for that number of Midas Gold Shares equal to, on a
fully diluted basis, sixty-five percent (65%) of the Midas Gold Shares
that are issued and outstanding at the time the transactions specified
in the Combination Agreement and the Plan of Exchange are completed; and
- The holders of Midas Option will exchange their
Midas Options for Midas Gold Options of like tenor.
About the Golden Meadows Project
The Stibnite-Yellow Pine gold district
lies at the intersection of major regional fault systems and lies on the
margin of the western ring fracture margin of the tertiary Thunder Mountain
caldera complex. Gold mineralization within the Golden Meadows Project
appears to be related to an intrusion-related, gold-rich system overprinted
by a younger, epithermal gold system with increased silver and antimony.
Historic gold production from the district is estimated at
approximately one million ounces, primarily from underground, higher-grade
gold-antimony production at Hangar Flats from 1925-38, open pit mining at
Yellow Pine from 1938-52, and from heap leaching of oxide gold occurrences,
including West End, Garnet Creek and Homestake,
from 1974 to 1997. The deeper sulphide gold
potential has seen little modern exploration. The principal gold deposits
identified to date within the Golden Meadows Project are Midas' Hangar Flats
and West End deposits, and Vista's Yellow Pine deposit, all of which are
associated with significant structural corridors. In addition, numerous
other gold targets have been identified, with potential for both shallow
oxide mineralization and deeper sulphide potential.
The independent resource estimate for
the Yellow Pine deposit was initially announced by Vista on November 19,
2003, and the "Yellow Pine Project, Idaho, USA, Technical
Report" was filed on SEDAR on December 12, 2003. Vista
subsequently incorporated those mineral resources in the "Preliminary
Assessment of the Yellow Pine Project, Yellow Pine, Idaho" filed on
SEDAR on December 15, 2006. Both documents are filed under Vista's
profile on SEDAR (www.sedar.com).
Since the filing of the 2006 preliminary
assessment for Yellow Pine, there has been no drilling within the area of the
mineral resource estimate for Yellow Pine. As part of the combination
of the Midas and Vista properties, Midas has retained SRK Consulting (US)
Inc. ("SRK") to complete a new NI 43-101 compliant mineral resource
estimate for the Yellow Pine deposit using similar technical parameters as
those used for the Midas properties. Given that Midas has recovered
additional historic data, the different approaches to the estimation of
mineral resources and current economic conditions used by SRK, combined with
the lack of recent drilling at Yellow Pine, the mineral resource estimate for
Yellow Pine may change. Further, SRK is likely to require some
additional confirmatory drilling at Yellow Pine before it can classify the
deposit in the indicated or measured categories. Therefore, following
the combination, some or all of the mineral resources at Yellow Pine are
expected to be reclassified into the inferred category until Midas Gold
completes the confirmatory drilling during the summer of 2011. It is
anticipated that SRK will complete its new mineral resource estimate for the
Yellow Pine deposit by the end of March 2011.
As noted in the February 22, 2011 news
release by Midas, all three deposits in the Stibnite-Yellow Pine gold
district remain open to expansion with opportunities to expand all three
known gold deposits along strike and to depth. Further, there is
potential to discover entirely new deposits based on information contained
within an extensive exploration database.
About Vista Gold Corp.
Vista is focused on the development of
the Mt. Todd gold project in Northern Territory, Australia, and the Concordia
gold project in Baja California Sur, Mexico, to achieve its goal of becoming
a gold producer. Vista's other holdings include the Guadalupe de los Reyes
gold project in Mexico, the Yellow Pine gold project in Idaho, the Awak Mas gold project in
Indonesia, and the Long Valley gold project in California. For more
information about our projects, including technical studies and resource
estimates, please visit our website at www.vistagold.com.
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 Vista
expects or anticipates will or may occur in the future, including such things
as, estimates of mineral resources, the conversion of inferred mineral
resources to measured and indicated resources, the conversion of mineral resources
to mineral reserves, the potential to expand the resource base at the Yellow
Pine gold project, the timing for completion and expected results of the
43-101 resource estimate by Midas relating to its properties in the District,
potential gold resources at the Yellow Pine gold project and on Midas
properties located in the District, the entering into a definitive agreement
with Midas, the extinguishment of the 5% net smelter returns royalty on the
Yellow Pine gold project, the timing for the completion of the definitive
agreement and completion of the proposed transaction, the potential upsize
resulting from the combination of the Yellow Pine gold project with Midas'
assets in the District, the quantum of the potential value realization, if
any, resulting from the proposed transaction, and other such matters are
forward-looking statements and forward-looking information. When used
in this press release, the words "optimistic,"
"potential," "indicate," "expect,"
"intend," "hopes," "believe," "may,"
"will,", "could", "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 Vista to be materially different from
any future results, performance or achievements expressed or implied by such
statements. Such factors include, among others, negotiating a
satisfactory definitive agreement, timing for completing the definitive
agreement, obtaining board and regulatory approvals, tax consequences of the
proposed combination, the ability to find and hire an appropriate management
team for Midas Gold, the ability to integrate the operations of Midas Gold,
uncertainty of resource estimates, estimates of results based on such
resource estimates; risks relating to cost increases for capital and
operating costs; risks relating to delays in the completion of the drilling
program, risks related to the adequacy of the design of the drilling program,
risks related to the ability to obtain the necessary permits, 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 Vista's 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; as well as those factors discussed under the
headings "Uncertainty of Forward-Looking Statements" and "Risk
Factors" in Vista's latest Annual Report on Form 10-K as filed on March
16, 2010, and Quarterly Report on Form 10-Q, as filed November 9, 2010, and
other documents filed with the U.S. Securities and Exchange Commission and
Canadian securities regulatory authorities. Although Vista has
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, Vista assumes no obligation to publicly update any forward-looking
statements or forward-looking information; whether as a result of new
information, future events or otherwise.
Without limiting the foregoing, this
press release uses terms that comply with reporting standards in Canada and
certain estimates are made in accordance with NI 43-101. NI 43-101 is a rule
developed by the Canadian Securities Administrators that establishes
standards for all public disclosures an issuer makes of scientific and
technical information concerning mineral projects. All mineral resource
and reserve estimates contained in this press release, including the terms
"measured mineral resources," "indicated mineral
resources" and "inferred mineral resources" have been prepared
in accordance with NI 43-101, and these standards differ significantly from
the requirements of the United States Securities and Exchange Commission
("SEC"). "Inferred resources" have a great amount
of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of
an inferred resource will ever be upgraded to a higher category. The SEC
normally only permits issuers to report mineralization that does not
constitute SEC Industry Guide 7 compliant "reserves" as in-place
tonnage and grade without reference to unit measures. The resource
information contained in this press release is not comparable to similar
information disclosed by U.S. companies. U.S. investors are cautioned not
to assume that any part or all of mineral deposits in these categories will
ever be converted into SEC Industry Guide 7 reserves.
For further information, please contact
Connie
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