TORONTO, ONTARIO--(Marketwired - Dec. 18, 2013) - Solvista Gold Corporation ("Solvista" or the "Company") (TSX VENTURE:SVV)(OTCQX:SVVZF) is pleased to announce that it has entered into an agreement (the "Agreement") with IAMGOLD Corporation ("IAMGOLD") that sets out the major terms of a 70% earn-in option agreement, subject to regulatory approval.
Highlights
- Under the terms of the Agreement, IAMGOLD will have the right to earn up to a 70% interest in the Company's Caramanta Project (the "Project"), located in Colombia's Mid- Cauca Belt, by completing the following steps:
- IAMGOLD can earn an initial 51% interest in the Project by investing a total of US$ 18 million (US$ 2,500,000 is a non-discretionary commitment) in qualifying expenditures, which includes US$ 900,000 of cash payments to Solvista, over a maximum five year period commencing on December 16, 2013, with IAMGOLD as the Project operator.
- IAMGOLD can earn an additional 19% interest in the Project, for a total 70% interest, by investing a further US$ 18 million in qualifying expenditures over a maximum three year period following the completion of the initial 51% earn-in.
- Subject to the satisfaction of the aforementioned conditions, and upon completion of IAMGOLD's 51% or 70% earn-in, as IAMGOLD may elect, Solvista and IAMGOLD will enter into a joint venture to hold and advance the Project.
Commenting on the Agreement, Solvista's President and CEO, Miller O'Prey, stated "We are extremely pleased that the potential of the Project, developed to-date through our exploration efforts over the last two years, has attracted the interest of a company such as IAMGOLD and we look forward to working with IAMGOLD to continue to advance the Project."
Details
Once IAMGOLD has completed its earn-in obligations and acquired a 70% interest in the Project, or in the event that IAMGOLD completes a 51% earn-in but elects not to complete a 70% earn-in, the Company and IAMGOLD will form a joint venture for the continued advancement of the Project. In the case that either party elects not to fund its pro-rata commitment, it will be diluted by an industry standard dilution model. In the case that either party dilutes to a 10% interest, that interest will convert to a 2% net smelter return royalty, of which 1% may be purchased for US$ 2 million at any time prior to the commencement of production.
IAMGOLD must spend at least 50% of the non-discretionary commitment during the first year of the Agreement, including further drilling within the area of the Caramanta Porphyry Cluster (see press releases dated May 21, June 11 and July 02, 2013) and regional exploration on new targets recently identified by Solvista such as the El Cacao area.
Drilling Results
The Company is also pleased to report the results of the latest drill program completed at the Project. A total of 761 metres were drilled in 5 drill holes, 4 on the Malabrigo target and 1 on the Casa Verde target.
The drilling at Malabrigo (Drill holes CAD-1328 to CAD-1331) identified near surface porphyry style gold dominant mineralization before entering a late to post mineral porphyry phase that does not outcrop. Drill hole CAD-1331 did terminate in significant mineralization, suggesting that more drilling should be completed to the west in order to fully evaluate the target. Drill hole CAD-1332 tested the Casa Verde target returning 67m at 0.61 g/t gold equivalent (AuEq) with substantially more copper mineralization than seen at Malabrigo. The Casa Verde drill hole is located near the southern edge of a large MMI soil gold and copper anomaly, suggesting that more drilling is warranted to the north.
Table 1 includes all the intervals of significant gold-copper mineralization and Table 2 provides location information for the five drill holes. Drill holes CAD-1328, CAD-1329, CAD-1330 and CAD- 1331 were drilled from the same platform at Malabrigo while drill hole CAD-1332 was drilled from a separate platform at Casa Verde, located approximately 1.3 kilometres to the north of Malabrigo. Significant intervals are defined as being at least 6 metres in length and averaging more than 0.4 g/t AuEq with no "internal dilution" greater than 6 metres at less than 0.4 g/t AuEq.
Quality Control and Assurance
The Company utilizes an industry-standard Quality Assurance/Quality Control program for the taking and analyzing of samples. Rock, drill core and stream sediment samples are prepared and analyzed at facilities in Antioquia, Colombia and Ontario, Canada run by the ActLabs Group of Companies. Gold values were determined by fire assay with an atomic absorption finish on 30 gram samples; other elements were analyzed with a 4 acid digestion and an ICP finish. Blanks, duplicates and certified reference standards are routinely inserted into the sample stream to monitor laboratory performance and a portion of the samples are periodically check assayed at SGS Laboratories in Medellín, Colombia.
The scientific and technical information contained in this press release has been reviewed by the Company's President and CEO, Mr. Miller O'Prey, P.Geo., who is a "Qualified Person" as such term is defined under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").