VANCOUVER, Feb. 8, 2012 /CNW/ - Yukon-Nevada Gold Corp. (TSX: YNG) (Frankfurt Xetra Exchange: NG6) (the "Company") is pleased to announce that it has entered into a Forward Gold
Purchase Agreement (the "Agreement") with Deutsche Bank AG, London Branch ("Deutsche Bank"). Deutsche Bank has funded a US$20 million prepaid gold forward
facility (the "Gold Facility") to Queenstake Resources USA, Inc. ("Queenstake"), a wholly-owned subsidiary of the Company.
The Company will use the proceeds for working capital and to further
invest in the expansion of the SSX-Steer mine as it ramps up to 1,200
tons per day and to commence development of Starvation Canyon,
including portal construction and equipment purchases, as part of the
2012 plan to commence production from that site at the Company's
Jerritt Canyon Mine in Nevada.
The facility is a forward contract structured to deliver 27,950 ounces
of gold over a 43 month term in the amount of 650 ounces per month
starting March 31, 2012. The 27,950 ounces of gold that have been
committed under this gold facility represent approximately 3.90% of the
gold reserves or 0.90% of the total gold resources at Queenstake's
wholly-owned Jerritt Canyon property in Nevada, USA.
The gold pricing valuation has been finalized and subsequent to the
receipt of the US$20 million prepayment, which represents an initial
pre-payment of approximately $716 per ounce, the remainder of the
purchase price for the gold will be paid to Queenstake upon completion
of the monthly gold deliveries to Deutsche Bank and will be equal to
the amount that the gold price exceeds US$850 up to a maximum gold
price of US$1,750.
In connection with the transaction, the Company has issued to Deutsche
Bank one share purchase warrant (the "Warrant"), which can be exercised to purchase 40,000,000 common shares (each "Warrant Share") at a price of $0.44 per share on or before February 7, 2015.
Under the terms of the Agreement, in the event that the actual monthly
quantity of gold delivered by the Company is less than the scheduled
monthly amount, the shortfall can be made up, at the option of Deutsche
Bank, by the issuance of common shares of the Company (the "Shares"). The conversion price per Share will be the five day volume weighted
average price ("VWAP") of the Company's shares as traded on the Toronto Stock Exchange ("TSX") immediately prior to the monthly delivery date for the scheduled
delivery month in which such gold shortfall payment obligation arises,
less the discount as permitted by the TSX.
In accordance with securities legislation currently in effect, the
Shares, the Warrant and the Warrant Shares will each be subject to a
"hold period" of four months plus one day from the date of issuance of
the aforesaid securities. In the case of the Warrant and the Warrant
Shares, the hold period will expire on June 8, 2012.
Yukon-Nevada Gold Corp. is a North American gold producer in the
business of discovering, developing and operating gold deposits. The
Company holds a diverse portfolio of gold, silver, zinc and copper
properties in the Yukon Territory and British Columbia in Canada and in
Nevada in the United States. The Company's focus has been on the
acquisition and development of late stage development and operating
properties with gold as the primary target. Continued growth will occur
by increasing or initiating production from the Company's existing
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The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
WARNING: The Company relies upon litigation protection for
This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The
securities have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "U.S. Securities Act")
or any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
SOURCE Yukon-Nevada Gold Corp.
For further information:
Yukon-Nevada Gold Corp.
Senior Director, Institutional Investor Relations
Tel: (604) 688-9427
Investor Relations Manager
Tel: (604) 688-9427 ext 224
CHF Investor Relations
Director of Operations
Tel: (416) 868-1079 ext. 225
Tel: +49 711 25 35 92 40