Columbus Gold Leases Its Chert Cliff Property And Options Its Four Metals Property
Vancouver, British Columbia, Canada. June 16, 2006. Columbus Gold Corporation (CGT: TSX-V) ("Columbus Gold" or the "Company") is pleased to announce that it has leased its 100% owned Chert Cliff Property ("Chert Cliff") to privately held Platte River Gold Inc. ("Platte River"), and has optioned its interest in its Four Metals Property ("Four Metals") to Black Pearl Consolidated Minerals Inc. ("Black Pearl").
Under the terms of the lease agreement with Platte River (the "Lease Agreement"), Platte River is obligated to make escalating annual lease payments to Columbus Gold totaling US$142,000 over the term of the Lease Agreement and must pay Columbus Gold US$100,000 in Platte River common shares; Platte River is also responsible for all maintenance payments on Chert Cliff and is required to make exploration expenditures totaling US$275,000 before the 36th month anniversary of the effective date of the Lease Agreement. Columbus Gold is also entitled to net smelter return royalties on production from Chert Cliff that vary from 2% to 3%.
Under the terms of the option agreement with Black Pearl (the "Option Agreement") and in order to maintain its option, Black Pearl must make cash and common share payments to Columbus Gold over a four year period totaling US$300,000 and 600,000 shares respectively. Columbus Gold will retain a 1.5% net smelter return royalty on certain claims that form Four Metals subject to a US$500,000 buy-down on half (0.75%) of the net smelter royalty, in favor of Black Pearl.
The Chert Cliff gold property consists of 9 mineral claims, covering approximately 185 acres, located in the Gold Bar District about 40 miles northwest of Eureka, Eureka County, Nevada. Gold Bar, including the property area, occurs within the southern section of the productive "Battle Mountain Trend" of gold deposits. Gold was discovered at Chert Cliff in the mid 1960's during the initial wave of prospecting for carbonate-hosted gold deposits following recognition of the Carlin Model in 1961. The most intensive work was carried out by Asarco in the 1980's and succeeded in outlining the Chert Cliff gold deposit as presently known. The deposit remains open to the west and Asarco geologists believed it could be expanded by adding additional drilling in that area.
The Four Metals copper property consists of 40 mineral claims, covering approximately 826 acres, located in the Patagonia District ten miles north of Nogales, Santa Cruz County, Arizona. Subject to a net smelter royalty, Columbus Gold owns a 50 percent interest in 16 claims and a 100 percent interest in 24 claims that make-up Four Metals. The Four Metals claims cover the Four Metals copper mine which has been intermittently investigated since the 1960's. Black Pearl plans to undertake a drilling program in the fall of 2006 with a view to confirming what is known about the existing deposit, potentially increasing tonnage and testing nearby exploration targets.
COLUMBUS GOLD CORPORATION
910 - 475 Howe Street
Vancouver, B.C. V6C 2B3
Tel: 604.689.2599 Fax: 604.689.3609
Toll Free: 1-866-689-2599
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
Robert F. Giustra
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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Toll Free: 1-866-689-2599