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Vista Gold Corp. Announces Letter Of Intent To Option The Guadalupe De Los Reyes Project
DENVER , Jan. 16, 2014 /CNW/ - Vista Gold Corp. (TSX & NYSE MKT: VGZ) ("Vista"...
About this update from Vista Gold Corp
[{"type":"text","content":"\n\n\n\nDENVER, Jan. 16, 2014 /CNW/ - Vista Gold Corp. (TSX & NYSE MKT: VGZ) (\"Vista\" or the \"Company\") today announced that it has signed a non-binding letter of intent (the \"LOI\") to option its interest in the Guadalupe de los Reyes gold and silver project in Sinaloa, Mexico (the \"GdlR Project\") to Cangold Limited (\"Cangold\").\nThe LOI provides that a non-refundable US$50,000 payment be made to Vista for which Cangold will have a 90 day period of exclusivity (the \"Exclusivity Period\") to complete due diligence and negotiate and enter into a definitive option agreement with Vista (the \"Option Agreement\").\nThe LOI contemplates that the Option Agreement (if entered into) will provide that Cangold may earn a 70% interest in the GdlR Project by:\n\nmaking payments totaling US$5,000,000 in five payments over a three-year period, with payments totaling US$1,000,000 in the first year, US$1,500,000 in the second year and US$2,500,000 in the third year; \noperating the GdlR project, maintaining the concessions comprising the GdlR Project in good standing; and \nfulfilling all of the obligations of Vista's wholly-owned subsidiary, Minera Gold Stake, S.A. de C.V. (\"MGS\") to the Ejido La Tasajera (the \"Ejido\") as set out in the temporary occupation contract between MGS and the Ejido.\n\nThe Option Agreement is expected to further provide that all cash payments are non-refundable and optional to Cangold, and in the event Cangold fails to pay any of the required amounts on the scheduled dates or fails to comply with its other obligations, the Option Agreement will terminate and Cangold will have no interest in the GdlR Project. Provided it is not in breach of the Option Agreement, Cangold may at its discretion advance the above payment schedule and exercise the initial option for a 70% interest in the GdlR Project any time during the three-year period.\nSubject to Cangold earning a 70% interest in the GdlR Project, pursuant to the Option Agreement Cangold will be granted an additional option to earn the remaining 30% interest in the GdlR Project, by notifying Vista of a production decision and by making a cash payment to Vista of US$3,000,000 plus an additional cash payment based on a formula that includes the growth, if any, in estimated NI 43-101 compliant Measured and Indicated mineral resources of the GdlR Project,...