Vista Gold sells interest in Mexican gold project
TORONTO (miningweekly.com) – US-based Vista Gold on Monday said it had inked a binding agreement to sell its debt and equity interests in the Los Cardones gold project, in Baja California Sur, Mexico, to the Invecture Group for $13-million.
The project, previously known as Paredones Amarillos, was subject to a 2012 earn-in agreement between Invecture and Vista, whereby Invecture could earn a 62.5% interest in the project by completing certain activities.
The execution of Monday’s accord would, however, result in that earn-in agreement being cancelled.
Invecture would pay for the interest in two tranches. The first $7-million would be paid when the agreement closes on October 16, and $6-million would be paid in January 2014.
The accord provided the condition that should Invecture choose not to make the second $6-million payment, Vista would keep the $7-million already paid, as well as the project.
Vista said proceeds from the transaction would fund much of its activities planned for 2014.
About half of the proceeds would be used to reduce the outstanding balance of Vista's term loan with Sprott Resource Lending Partnership, resulting in an expected C$40 000 reduction of Vista's monthly interest payments.
"The sale of the Los Cardones gold project is consistent with Vista's strategy to raise capital through the sale of noncore assets. This transaction preserves our shareholders' exposure and leverage to Vista's two core assets, the Mount Todd gold project (in Australia's Northern Territory) and Vista's ownership of Midas Gold Corp, without diluting our shareholders,” president and CEO Frederick Earnest said.
Vista continued to list its Colomac mill equipment for sale through AM King Industries. A successful sale could provide enough additional capital for Vista to fund itself beyond 2014, complete the feasibility study of the Mount Todd project, and fully repay its term loan with Sprott.
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