Joint Venture Agreement Completed And Commencement Of Drilling At Columbus Gold's Overland Pass Project
Vancouver, British Columbia, Canada. November 27, 2006. Columbus Gold Corporation (CGT: TSX-V) ("Columbus Gold" or the "Company") is pleased to announce that it has entered into a joint venture agreement (the "Agreement") with privately held Sniper Resources Limited ("SRL") on its Overland Pass Property located approximately 90 kilometers (km), (55 miles) south of Elko, Nevada. Columbus Gold is also pleased to announce that a twelve-hole, 1,830 metre (6,000 feet) drill program has commenced at Overland Pass.
The Overland Pass Property consists of 72 mineral claims, covering approximately 600 hectares (1,488 acres) and is located approximately 6.5 km (4 miles) north of Barrick Gold's Bald Mountain Gold Mine on the southern extension of the Carlin Trend. Subject to net smelter return royalties, Columbus owns a 100% interest in Overland Pass.
Under the terms of the Agreement, SRL can earn an initial 51% interest in the Overland Pass Property by making i) a cash payment to Columbus Gold of US$12,500; ii) an additional payment of US$37,500 in either cash or shares of SRL, at SRL's election, on the earlier of April 30, 2007 or the completion of SRL's initial public offering on the TSX Venture Exchange; and iii) by incurring US$2 million in exploration expenditures over a five year period. After earning a 51% interest, SRL will have the option of either i) entering into a joint venture agreement with Columbus Gold whereby SRL will own 51% and Columbus Gold will own 49% of the joint venture, or ii) electing to earn an additional 19% of Overland Pass by completing a positive feasibility study. On completion of a positive feasibility study, Columbus Gold will then have the option of either i) entering into a joint venture agreement with SRL whereby SRL will own 70% and Columbus Gold will own 30% of the joint venture, or ii) electing to receive a 2% net smelter return royalty.
Overland Pass -- Geology and Historical Work
The overall geological setting is very similar to that of the Alligator Ridge and Rain gold deposits, both of which produced in excess of one million ounces of gold. Alligator Ridge is approximately 18 km (11 miles) south of Overland Pass.
Sampling at Overland Pass has yielded gold from silicified zones and breccia in the Pilot Shale and Joana Limestone. The favorable Pilot/Joana stratigraphic sequence is present for approximately 3 km (two miles) of strike length on the claim block. Gold values range from anomalous to 15 grams per tonne (g/t) Au (0.45 opt) in surface sampling, with nine samples exceeding 3 g/t (0.10 opt) Au range.
Historic drilling on the claims by Santa Fe and Western States Minerals concentrated in three areas on the eastern portion of the claim block, and yielded values up to 5 m (fifteen feet) of 1 g/t (0.03 opt Au), with anomalous gold in most of the drill holes.
The drill program currently underway will test several previously untested, northerly structural zones cutting favorable rocks and demonstrated to be gold-bearing by recent sampling, and the completely untested western half of the claim block where geologic mapping and sampling indicate very favorable conditions for gold deposition.
John Prochnau B.Sc. (Mining Engineering), M.Sc. (Geology), and Director of Columbus Gold is the Qualified Person who reviewed and approved the contents of this news release.
ABOUT COLUMBUS GOLD
Columbus Gold Corporation is a gold exploration and development Company operating principally in Nevada. The Company has an experienced management group with a strong background in all aspects of the acquisition, exploration, development and financing of precious metal mining projects. Columbus owns a 100% interest, subject to royalties, in 17 gold projects strategically located along or near Nevada's most productive gold trends and 4 non-core silver and copper projects located in Arizona. The Company's project activities are managed by Cordilleran Exploration Company ("Cordex"), owned and operated by John Livermore and Andy Wallace who have a long and successful history of gold discovery and mine development in Nevada.
The Company maintains active generative (prospecting) and evaluation programs and, as a key element of strategy, broadens exposure, minimizes risk and maintains focus on high priority prospects while seeking industry finance through joint ventures on selected projects. The Company currently has eight of its projects joint ventured to major and junior mining companies.
ABOUT SNIPER RESOURCES
Sniper Resources is a private Vancouver-based resource exploration company with gold projects located in Nevada.
ON BEHALF OF THE BOARD,
Robert Giustra
President & CEO, Director
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
For more information contact:
Ray Lagace
Investor Relations
604-638-3474
info@columbusgoldcorp.com
