Nordgold signs US$30 million agreement with Columbus Gold Corp. to acquire 50.01% of Montagne d’Or Deposit in French Guiana
Amsterdam, Netherlands, March 14, 2014 - 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 executed the definite option agreement (the “Agreement”) with Columbus Gold Corp. (“Columbus Gold”, CGT: TSX-V) contained in the binding letter of intent dated September 17, 2013 under which Columbus Gold granted Nordgold the exclusive right (the “Option”) 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 (the Initial Payment) in cash no later than May 21, 2014. The Initial Payment is mandatory and is not subject to any conditions. During the earn-in period, Columbus Gold will act as operator on the Project and charge a 10% management fee on certain expenditures. The 2014 work program at the Project is budgeted at US$11.8 million.
With the exception of the Initial payment, all expenditure requirements are optional and the Agreement does not impose upon Nordgold any obligation to perform any act thereunder, including without limitation, making any additional Property Expenditures. The parties have not created a partnership.
The Agreement is subject to receiving confirmation from the French government that it has no objection to the Option. The Agreement contains other provisions standard for an option agreement, including provisions regarding an extended area of interest, force majeure extensions and termination.
I am delighted to progress our involvement in this important project. Nordgold is always looking at opportunities to extend its already strong organic growth pipeline. Montagne d’Or is an increasingly rare potential project of genuine quality and one which meets our strict acquisition criteria both in terms of scale, access to infrastructure and the high grade of the deposit. We have a proven ability to effectively develop new projects as the major achievement our Bissa mine in Burkina Faso demonstrates. We are confident that Montagne d’Or offers similar shareholder value creating opportunities. Nikolai ZelenskiChief Executive Officer of Nordgold