Columbus Gold Enters Joint Venture Arrangement With Agnico Eagle
Vancouver, British Columbia, Canada. June 13, 2006. The Directors of Columbus Gold Corporation (CGT: TSXV) ("Columbus Gold" or the "Company") are pleased to announce that the Company has entered into an agreement (the "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 Utah Clipper, Crestview and Laura properties (the "Properties"). The Properties are located directly on the prolific northwest Battle Mountain Trend, host to a number of world-class deposits in the Cortez-Pipeline area and are immediately adjacent to the Pipeline- Gold Acres mine complex.
Under the terms of the Agreement, Agnico Eagle can earn a 51% interest in the Properties by undertaking staged work expenditures totaling US$6.5 million over a seven year period with minimum expenditures of US$600,000 in the first year. Agnico Eagle will assume responsibility for maintaining the Properties by paying all annual sustaining fees and meeting all underlying annual lease payments and will be the operator during the earn-in phase of this arrangement and upon formalization of the joint venture.
Upon completing US$6.5 million in aggregate work expenditures, Agnico Eagle will have earned a 51% interest in the Properties leading to the establishment of a formal joint venture. Once Agnico Eagle has acquired a 51% interest in the Properties, it may elect to earn an additional 19% interest in the Properties (for a total interest of 70%) by preparing and delivering to Columbus Gold, a feasibility study for the development of a mine on the Properties. In the event of a decision to develop a mine on any of the Properties, 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. Agnico Eagle will earn a further 5% interest in the Properties (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.
Columbus Gold's Utah Clipper and Crestview properties consist of 256 mineral claims, totaling approximately 5,058 acres, adjacent to Barrick Gold's Pipeline-Gold Acres gold mine complex, in the Cortez-Pipeline sector of the productive Battle Mountain Trend. The area has seen small-scale production of silver and base metals from the historic Utah Camp, Clipper and Boss mines and limited modern exploration by Newmont, Goldfields, Noranda/Hemlo and Uranerz/Cameco in the late-1980's to mid-1990's.
The Utah Clipper property is underlain by an undetermined thickness (800 to +2,000 feet) of siliceous sediments above the regional Roberts Mountain thrust fault. Prospective lower-plate carbonates, which occur below the fault, host the world-class Carlin/Pipeline-style gold deposits of the district. The principal geologic targets at Utah Clipper include these classic bulk-mineable, disseminated gold deposits or high grade, structurally-controlled vein deposits in lower plate carbonates and are considered to have not been adequately tested by past work. Columbus Gold's Laura property consists of 13 mineral claims, covering approximately 268 acres, located approximately three kilometers west of Barrick Gold's multi-million ounce Cortez Hills discovery.
Agnico Eagle's initial work program will focus on re-interpretation of historic exploration data and supplemental surface sampling and geophysical surveys followed by drilling. The planned program anticipates approximately 8,500 feet of drilling in four or five holes to test lower-plate gold targets at Utah Clipper. "Columbus Gold is very pleased to join forces with Agnico Eagle, and draw upon their internationally recognized expertise as gold explorers, developers, financiers and operators, to develop its Utah Clipper, Crestview and Laura projects" stated John Prochnau, Director. "We anticipate a flow of positive results as their programs evolve on these strategically located and highly prospective properties. With Agnico Eagle taking on these exploration programs, the Company will be able to allocate the money previously set aside for this activity, for an expansion of our plans for work on the other properties in our portfolio".
ABOUT AGNICO EAGLE
Agnico Eagle Mines Limited is an international mining company focused on gold, with operations in Canada and advanced-stage projects and opportunities in Canada, Mexico, Finland, and the USA. Agnico Eagle's LaRonde Mine in Quebec is reputed to be Canada's largest gold deposit (www.agnico-eagle.com).
ABOUT COLUMBUS GOLD
Columbus Gold has an experienced management group with a strong background in all aspects of the acquisition, exploration, development and financing of precious metal mining projects. The Company owns 100% interests, subject to small royalty interests, in eleven gold projects strategically located along or near Nevada's most productive gold trends and four non-core silver and copper properties in Arizona. Columbus Gold's project activities in Nevada and Arizona are managed by Cordilleran Exploration Company ("Cordex") which is owned and operated by John Livermore and Andy Wallace who have a long and distinguished history of gold discovery and mine development in Nevada.
ON BEHALF OF THE BOARD
Kenneth P. Judge
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