Agnico Eagle Enters Into US$3 Million Joint Venture Agreement With Columbus Gold At Summit And Returns Battle Mountain Properties
Vancouver, British Columbia, Canada. June 11, 2007. Columbus Gold Corporation (CGT: TSX-V) ("Columbus Gold" or the "Company") is pleased to announce that it has entered into an agreement (the "Summit Agreement") with Agnico Eagle (USA) Limited ("Agnico Eagle"), a US subsidiary of Agnico Eagle Mines Limited (AEM: TSE & NYSE), to explore and develop Columbus Gold's Summit Project (the "Project"). The Summit Project is located along the northern and eastern flanks of the Pequop Range, approximately 22 kilometres (14 miles) east of Wells, Nevada and strategically positioned in close proximity to the Long Canyon gold discovery of AuEx Ventures, Inc., and NewWest Gold Corporation. A map of the Summit Project may be viewed here:
Under the terms of the Summit Agreement, a 51% interest can be earned in the Summit Project by undertaking staged work expenditures totaling US$3 million over a five year period and by making staged cash payments of US$150,000 to Columbus over three years. Agnico Eagle will assume responsibility for maintaining the Project by paying all annual sustaining fees and will be the operator during the earn-in phase of this arrangement and upon formalization of the joint venture.
Upon completing US$3 million in aggregate work expenditures and US$150,000 in payments, a 51% interest will have been earned in the Summit Project leading to the establishment of a formal joint venture. Once a 51% interest has been earned, an election to earn an additional 19% interest (for a total interest of 70%) can occur by preparing and delivering to Columbus Gold, a feasibility study for the development of a mine on the Project.
In the event of a decision to develop a mine at Summit, Columbus Gold may require Agnico Eagle to arrange financing for Columbus Gold's proportionate share of the capital required for the development of the mine, including a working capital reserve as provided in the feasibility study. A further 5% interest can be earned in the Summit Project (for a total interest of 75%) for arranging this financing for Columbus Gold which may take the form of a loan, a private placement into Columbus Gold, direct equity investment by Agnico Eagle or such other form as the parties agree are commercially reasonable.
The Summit Project consists of 315 mineral claims, covering approximately 5,760 acres (9 square miles), along the northern and eastern flanks of the Pequop Range. The claims are staked in an area of Nevada known as the "checkerboard" where every other square mile is private, therefore Columbus Gold's claims cover the intervening federal lands, between the private parcels. Subject to net smelter royalties, Columbus Gold owns a 100% interest in the Project.
The Summit Project was staked by Columbus in response to the November 2005 announcement of the discovery drill holes of good grade, Carlin-type gold mineralization by AuEx Ventures, Inc., at their Long Canyon Property. Columbus Gold's claims are positioned to cover either outcropping Lower Paleozoic sedimentary rocks similar to the host rock at Long Canyon, or shallow pediment along the inferred strike of structures trending to the Long Canyon area. Columbus Gold performed surface prospecting, geochemical sampling, and geologic mapping on the claims.
Agnico Eagle has also notified the Company that it is relinquishing its right and option to earn an interest in Columbus Gold's Utah Clipper, Crestview and Laura properties first announced on June 13, 2006. Columbus Gold is currently in discussions with several potential partners with regard to joint-ventures on these properties including major mining companies.
Recent drilling at Utah Clipper and Crestview consisted of 2,907.8 metres (m) (9,540 feet) in 5 deep vertical rotary holes. The principal targets at Utah Clipper and Crestview are classical Carlin or Pipeline-style bulk mineable, disseminated gold deposits or high grade, structurally controlled vein deposits in lower plate carbonates. Drilling at Utah Clipper consisted of three holes; one hole was lost at 317 m (1040 feet) before intersecting the lower plate and the other two holes were drilled to 762 m (2,500 feet) and 548.6 m (1,800 feet) and intersected favorable lower plate carbonate rocks at 246.9 m (810 feet) and 289.5 m (950 feet) respectively. The best gold intercept was 464 ppb over 3 m (10 feet), within 12.2 m (40 feet) averaging over 100 ppb, at a depth of 509 m (1,670 feet). Arsenic was highly anomalous, reaching a high of 6,944 ppm, in both the upper and lower plates, and zinc was as high as 1.5% over a width of 54.9 m (180 feet), from 371.9 -- 426.7 m (1,220-1,400 feet) of depth. At Crestview, drilling consisted of two vertical rotary holes drilled to 518.2 m (1,700 feet) and 762 m (2,500 feet) which intersected favorable lower plate carbonate rocks at 198.1 m (650 feet) and 320 m (1,050 feet) respectively. Both holes had highly elevated zinc and arsenic, and gold was anomalous in several intervals but less than 100 ppb.
Andy Wallace is a Certified Professional Geologist (CPG) with the American Institute of Professional Geologists and is the Qualified Person who has reviewed the technical contents of this news release on behalf of Columbus Gold. Mr. Wallace is a partner of Cordilleran Exploration Company ("Cordex"), which is conducting exploration and project generation activities for Columbus Gold on an exclusive basis.
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 controls a 100% interest, subject to royalties, in 20 gold projects strategically located along or near Nevada's most productive gold trends and 6 gold, silver and copper projects located in Arizona and Utah.
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 11 of its projects joint ventured to major and junior mining companies.
ON BEHALF OF THE BOARD,
President & CEO, Director
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
For more information contact: