Vista Gold Corp. Announces Canyon Resources Corporation Elects Not to Exercise Hycroft Option, New Hycroft Resource Estimate Rep
05 Août 2005 - 2:25AM
PR Newswire (US)
DENVER, Aug. 4 /PRNewswire-FirstCall/ -- Vista Gold Corp.
(AMEX:VGZ) Toronto announces that Canyon Resources Corporation
(AMEX:CAU) has advised Vista that Canyon will not be exercising its
option to acquire the Hycroft mine near Winnemucca, Nevada. In
January 2005, Canyon entered into a six month option agreement with
Vista to expend US$0.5 million for drilling, engineering and
due-diligence review to acquire the mine for US$4.0 million in cash
plus US$6.0 million in Canyon equity units consisting of one common
share and one warrant for half a share. Canyon completed a 33-hole
drilling program totaling 12,475 feet and undertook a comprehensive
study to restart operations at Hycroft. Assaying was done by
American Assay Laboratories of Sparks, Nevada. The drilling program
confirmed average grades for the ore body but Canyon noted that
increased costs, as well as shortages of labor and large mining
equipment were contributing factors in its decision not to proceed.
Vista received the data from Canyon's work at the time of
notification and has not completed a review of all the information.
However, a resource study in accordance with Canadian National
Instrument 43-101 guidelines was completed by Ore Reserves
Engineering of Lakewood, Colorado, under the direction of Mr. Alan
Noble, P. Eng., a qualified person independent of Canyon or Vista.
The re-estimation of gold resources, based on 587 drill holes with
a total of 52,889 assay intervals covering 267,280 feet, resulted
in increasing the measured and indicated resources at the Brimstone
deposit some 30% from the previous estimate by Mine Development
Associates of Reno, Nevada, as announced by Vista in September
2004. The inferred gold resources decreased slightly from the 2004
estimate to the current estimate. A comparison of the gold resource
estimates is shown in the following table. Brimstone Gold Resources
(0.005 opt cyanide-soluble gold cutoff grade) Mine Development
Associates 2004 Resource Short Fire Assay Contained Category Tons
Gold Grade Gold Ounces (millions) (opt) Measured 1) 23.3 0.0165
385,100 Indicated 1) 24.2 0.0153 369,400 Total M&I 47.5 0.0159
754,600 Inferred 2) 12 0.0111 133,600 Brimstone Gold Resources
(0.005 opt cyanide-soluble gold cutoff grade) Ore Reserves
Engineering 2005 Resource Short Fire Assay Contained Difference
Category Tons Gold Grade Gold Ounces (millions) (opt) Measured 1)
17.2 0.02 351,000 Indicated 1) 35.5 0.018 627,000 Total M&I
52.7 0.019 978,000 30% Inferred 2) 8.7 0.015 127,000 -5% 1)
Cautionary Note to U.S. Investors concerning estimates of Measured
and Indicated Resources: This table uses the terms "measured and
indicated resources". We advise U.S. investors that while these
terms are recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize them. U.S.
investors are cautioned not to assume that any part or all of
mineral deposits in these categories will ever be converted into
reserves. 2) Cautionary Note to U.S. Investors concerning estimates
of Inferred Resources: This table uses the term "inferred
resources". We advise U.S. investors that while this term is
recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize it. "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 mineral resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of inferred mineral
resources may not form the basis of feasibility or prefeasibility
studies, except in rare cases. U.S. investors are cautioned not to
assume that any part or all of an inferred resource exists or is
economically or legally mineable. Mike Richings, Vista President
and CEO, commented, "Although we believe this is an excellent time
for gold producers to expand or commence new gold production, we
can understand Canyon's concerns over the severe inflation in mine
production costs in the mining industry. One only has to look at
recent results from major mining companies, which are better able
to deal with inflation, to observe the impact of inflation on gold
production costs. We believe this will eventually affect gold
supply, accelerating the onset of higher gold prices. Vista will
continue its strategy of acquiring and holding gold resource
properties, while waiting for higher gold prices, when significant
premiums from the sale, joint venture or gold production can be
realized from these properties. Vista will continue to hold the
Hycroft mine until an appropriately valued opportunity arises."
Vista Gold Corp., based in Littleton, Colorado, evaluates and
acquires gold projects with defined gold resources. Additional
exploration and technical studies are undertaken to maximize the
value of the projects for eventual development. The Corporation's
holdings include the Maverick Springs, Mountain View, Hasbrouck,
Three Hills, Wildcat projects and Hycroft mine, all in Nevada, the
Long Valley project in California, the Yellow Pine project in
Idaho, the Paredones Amarillos and Guadalupe de Los Reyes projects
in Mexico, and the Awak Mas project in Indonesia. The statements
that are not historical facts are forward-looking statements
involving known and unknown risks and uncertainties that could
cause actual results to vary materially from targeted results. Such
risks and uncertainties include those described from time to time
in the Corporation's periodic reports, including its latest annual
report on Form 10-K filed with the U.S. Securities and Exchange
Commission. The Corporation assumes no obligation to publicly
update any forward-looking statements, whether as a result of new
information, future events or otherwise. DATASOURCE: Vista Gold
Corp. CONTACT: Greg Marlier of Vista Gold Corp., +1-720-981-1185
Web site: http://www.vistagold.com/
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