TORONTO, Sept. 15, 2014 (GLOBE NEWSWIRE) -- Solvista Gold Corporation ("Solvista" or the "Company") (TSX-V:SVV) (OTCQX:SVVZF) is pleased to announce certain changes to its existing agreements with Tolima Gold Inc. ("Tolima") and IAMGOLD Corporation ("IAMGOLD") and the entering into of a new arrangement with Tolima regarding certain properties (the "Properties") located in the Departments of Caldas and Antioquia in Colombia originally optioned by Solvista from Tolima in 2012, as disclosed in the Company's press release dated July 30, 2012. The Properties are located adjacent to the Company's Caramanta Project which is currently covered by the US$36 million option agreement between IAMGOLD and Solvista (the "IAMGOLD Agreement"), as disclosed in the Company's press release dated March 17, 2014.
The existing option agreement between Tolima and Solvista contemplated the Company acquiring an initial 50% interest in the Properties and included certain other rights and obligations that would allow Solvista to earn up to a 100% interest in the Properties. Solvista and Tolima have now agreed to enter into a new arrangement regarding the Properties under which Solvista and Tolima will jointly control the Properties through an equal ownership stake in a newly incorporated Colombian entity ("Newco"), and form a joint venture ("Joint Venture") in respect of the Properties. Newco will then contribute the Properties and become a party to the IAMGOLD Agreement. IAMGOLD will then operate the Properties, along with the Caramanta Project, in accordance with the terms and conditions of the IAMGOLD Agreement. The Joint Venture will be inactive until and if at such time as right, title and interest in any concession comprising the Properties is abandoned by IAMGOLD and transferred back to Newco in accordance with the terms of the IAMGOLD Agreement.
In consideration for entering into the new arrangement with Tolima, the Company will issue 400,000 shares in its capital stock ("Solvista Shares") and a cash payment of $25,000 to Tolima. Pursuant to the existing option agreement the Company will also concurrently issue an additional 600,000 Solvista Shares to Tolima. These Solvista Shares are in addition to the 2,400,000 Solvista Shares already issued to Tolima pursuant to the terms of the existing option agreement. None of the other outstanding rights or obligations of either Solvista or Tolima under their original option agreement will apply under the terms of the new arrangement and the original option agreement will be terminated upon the effective transfer of the Properties to Newco. The proposed arrangement is subject to the approval of the TSX Venture Exchange.
With the vending in of the Properties the amended IAMGOLD Agreement will provide IAMGOLD with the option to earn up to a 70% interest in the Company's Caramanta Project and the Properties upon the completion of US$40 million of qualifying expenditures, an 11% increase from the current earn-in obligations, that includes cash payments to the Company and Newo, amongst other conditions.
IAMGOLD will be able to earn an initial 51% in the Company's Caramanta Project and the Properties by investing a total of $20,000,000 in qualifying expenditures, which will include $900,000 and $100,000 in cash payments to Solvista and Newco, respectively, over a maximum five year period that commenced December 16, 2013. IAMGOLD will be able to earn an additional 19% interest in the Caramanta Project and the Properties, for a total 70% interest, by investing a further $20,000,000 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, Newco and IAMGOLD would enter into a joint venture to hold and advance the Caramanta Project and the Properties.
The Caramanta Project and the Properties cover the location of a multi-phase altered copper gold mineralized event that has been shown by Solvista to extend for more than 3.5 km in a general north south direction. Drilling by Solvista included the discovery of significant copper-gold mineralization at a number of locations that warrant further evaluation. As described in a press release dated August 20, 2014, IAMGOLD has completed a number of follow-up studies on the Caramanta Project that have helped to further define drill targets and has recently commenced a significant diamond drill program. Drilling is expected to continue for several months on the Caramanta Project and the Properties.
The scientific and technical information contained in this press release has been reviewed by the Company's President and CEO, Mr. R. Bruce Durham, 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").
Three of the Caramanta Project's multiple targets (El Reten, El Corral and Ajiaco Sur), and a portion of the Properties are located within a regional environmental designation referred to as the district of integrated management ("DMI"). Under the terms of the DMI there is currently a prohibition against open pit mining within the DMI. The Company has submitted a written submission to the regional environmental authority in Corantioquia requesting the immediate removal of the DMI designation on the affected Caramanta Project targets. As disclosed in the Company's press release dated September 16, 2013, exploration of the Company's targets within the DMI has been temporarily halted by Corantioquia until the Company's application for removal of the DMI designation has been considered. In October 2013 Corantioquia informed the Company that during the period that a decision on the removal of the DMI designation on the affected targets is being considered exploration of Company targets within the DMI could resume upon the receipt of an acceptable environmental management plan. IAMGOLD and the Company jointly presented an environmental management plan regarding those specific targets to Corantioquia in March of this year.
About Solvista
Solvista is a gold exploration company with two projects, Caramanta and Guadalupe. These projects cover approximately 44,000 hectares in the Antioquia province of Colombia, a region rich in historic gold mining tradition and where several new gold discoveries have recently been made. Drill programs conducted by the Company during 2012 confirmed the presence of significant gold mineralization at both of its projects, with drilling by IAMGOLD currently ongoing at the Caramanta Project. Solvista's head office is located in Toronto. For further details on Solvista, its management team and its projects, please refer to Solvista's website (www.solvistagold.com).
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
CAUTIONARY STATEMENT: This news release contains forward-looking information that is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release may include, but is not limited to, Solvista's objectives, goals or future plans, statements regarding the estimation of mineral resources, exploration results, potential mineralization, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, failure to convert estimated mineral resources to reserves, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, including those related to the DMI on portions of the Caramanta Project and the Properties, delays in obtaining or failures to obtain requisite stock exchange approval, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry, and those risks set out in Solvista's public documents filed on SEDAR. Although Solvista believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Solvista disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.