Nordgold Enters LOI to Acquire Deposit in French Guiana
Amsterdam, Netherlands, September 18, 2013 - Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD), the internationally diversified, pure-play gold producer strategically focused on emerging markets, is pleased to announce that it has entered into a binding letter of intent (the “Agreement”) with Columbus Gold Corp. (CGT: TSX-V) (“Columbus Gold”) under which Columbus Gold has granted Nordgold the exclusive right to earn a 50.01% interest in certain licences at Columbus Gold’s 100%-owned Paul Isnard project. Paul Isnard contains inferred gold resources of 4.15 million ounces at 2.22 g/t Au in the Montagne d’Or deposit (“the Project”) in French Guiana.
As part of the Agreement, Nordgold can earn a 50.01% interest in the Project by completing a bankable feasibility study (the BFS) and by spending not less than US$30 million over three years (the Option Period) in staged work expenditures (Property Expenditures), which includes a requirement for Nordgold to pay Columbus Gold US$4.2 million in cash no later than May 21, 2014. The US$4.2 million payment is due in consideration of Columbus Gold purchasing an underlying royalty on the Project. During the Option Period, Columbus Gold will act as operator on the Project and charge a 10% management fee on certain expenditures.
With the exception of the mandatory US$4.2 million payment, all expenditure requirements are optional and the Agreement does not impose upon Nordgold any obligation to perform any act hereunder, including without limitation making any Property Expenditures. The parties have not created a partnership.
The Agreement is subject to several conditions that must be satisfied on or before January 31, 2014, including obtaining the consent of underlying royalty holders and the approval of the TSX Venture Exchange.
Rationale for the Acquisition:
- Participation in the Project is another step in the implementation of Nordgold’s strategy to expand our portfolio through the development of high quality projects to deliver long term growth and value to shareholders.
- Montagne d’Or fits Nordgold’s criteria for greenfield projects:
Today, there are very few high quality development projects available to gold companies worldwide. I believe Montagne d’Or exhibits all the characteristics necessary to become one, and we are pleased to have an opportunity to develop it together with Columbus Gold. I am confident that our extensive experience of operating in four diverse countries, strong track record of developing new reserves and building mines, and our experienced management team will ensure a successful implementation of the Project. Nikolai ZelenskiChief Executive Officer of Nordgold