Vancouver – In a move to improve market value of its Nevada mineral project portfolio, Vista Gold (VGZ-T, VGZ-X) will spin-off its landholdings in the western U.S. state, including the past producing Hycroft mine, into a new public company that will also see a significant number of additional projects from a large private landholder included.
A letter of intent has been entered into with the Pescio Group (comprised of Carl and Janet Pescio, Greg Hryhorchuk and Robert Lipsett) whereby Vista will place all of its Nevada mineral projects into a new publicly listed company that will then acquire all the private group’s projects in the state.
Vista’s main contribution will be its Hycroft mine in northwestern Nevada, where open-pit heap-leach operations produced more than 1.1 million ozs. of gold from 1987 until mining was suspended in 1998 due to low gold prices and it was placed on care and maintenance. Proven and probable cyanide-soluble reserves of about 30 million tonnes grading 0.69 gram gold per tonne (663,000 contained ozs. of gold) were reviewed earlier this year using a 0.16 gram gold cut-off grade and a 1.52-to-1 strip ratio.
Other Vista projects in Nevada include: Hasbrouck-Three Hills near Tonopah where an indicated resource of 23.6 million tonnes grading 0.79 gram gold was reviewed; Maverick Springs, located about 80 km southeast of Elko, where a measured and indicated resource of 63.2 million tonnes of 0.34 gram gold plus an additional 77.6 million tonnes at 0.27 gram gold; Mountain View in northwestern Nevada containing a measured and indicated resource of 21 million tonnes of 0.46 gram gold plus an additional 4 million inferred tonnes grading 1.34 grams gold; and Wildcat in Pershing Cty where an indicated and inferred resource of 60 million tonnes at 0.58 gram gold.
Additionally, in late-2005 Vista acquired the private company F.W. Lewis that held a royalty on Hycroft plus 52 other mineral properties mostly in Nevada.
The Pescio Group holds interests in 53 mineral projects throughout north-central Nevada totaling over 56,000 hectares. The package also includes royalty interest on a number of the projects with US$1.6 million of advanced royalty payments realized in 2005.
Subject to all the conditions and regulatory requirements, the proposed transaction will involve Vista exchanging its current common stock for shares of the new company and new Vista shares. It is anticipated the new company will also look to raise at least US$40 million through a private placement financing. About 60% of the total consideration payable by the new company for the asset acquisition would be paid (as new shares) to Vista shareholder and 40% will be paid to Pescio (in shares and US$15 million in cash).
The new company will hold one of the larger exploration land positions in Nevada totaling about 770 sq. km of mineral claims.
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