Corvus to Receive $6M Cash and 750,000 WestMountain Shares
TSX: KOR OTCQX: CORVF
VANCOUVER, Feb. 20, 2013 /CNW/ - Corvus Gold Inc. ("Corvus" or the "Company") - (TSX: KOR, OTCQX: CORVF) announces that its Alaskan subsidiary, Raven Gold Alaska Inc. ("Raven"), has signed a non-binding Letter Of Intent ("LOI") to sell all of its joint venture participating interest in the Terra Project in Alaska to its current joint venture partner, Terra Gold Corp. ("Terra Gold") (a subsidiary of WestMountain Gold Inc.), while retaining precious and base metal NSR royalties, for consideration consisting of cash and shares. Proceeds from the sale are intended to be used for the ongoing development of the Company's North Bullfrog project in Nevada. The Company is preserving its downstream value potential on the Terra Project with Raven's retained royalty and share position in WestMountain.
Jeff Pontius, Corvus' CEO, stated: "Corvus believes the proposed transaction with our partner WestMountain is a true win-win deal, where Corvus uses the monetization of its non-core asset to advance its Nevada production plan and WestMountain can gain greater flexibility in the development of the Terra asset. This proposed deal not only provides 2013 development capital to Corvus for the North Bullfrog project, but also reduces shareholder dilution and provides long-term upside leverage with a well structured royalty positions on both precious and base metals. Corvus remains focused on its core strategy of becoming a near-term Nevada gold producer and aggressively exploring its significant new high-grade gold and silver discovery on its 100% owned North Bullfrog in Nevada."
Letter of Intent Executed
Raven and Terra Gold executed the LOI on February 18, 2013. The key proposed terms for the sale by Raven of all of its participating interest in the Terra Project to Terra Gold are as follows:
- $50,000 deposit paid by Terra Gold at signing of LOI
- Closing deadline of April 15th 2013, with an initial payment of USD 3.0 million due at closing and USD 2.0 million due 90 days following (on July 15, 2013), with a final USD 1.0 million payment due on the first anniversary of the closing (April 15, 2014). The last two payments are secured by a first mortgage on the Terra project.
- 750,000 shares of WestMountain stock are to be issued to Raven at closing. Raven will agree to hold such stock for 24 months following closing.
- Raven's retained royalty will be amended to be a sliding scale NSR royalty of 0.5% to 3% on precious metals (3% above a USD 1,500 gold price) and a flat 2% NSR royalty on all base metals.
- Terra Gold will also pay USD 150,000 and deliver 250,000 WestMountain shares to International Tower Hill Mines Ltd., as required by the present joint venture agreement in order for Terra Gold to vest its maximum interest.
- At closing, Terra Gold will pay Raven the value of Raven's 3% NSR royalty on the 2012 gold and silver production from Terra.
Completion of the transaction is subject to completion of final negotiations, settlement and execution of formal documentation, completion by Terra Gold of due diligence (and a satisfactory result thereof) by April 5, 2013, and receipt of any necessary regulatory approvals/acceptances required on behalf of WestMountain.
About the Terra Project
At present, Terra Gold has the right to earn a 51% interest in the Terra Project from Raven by spending a total of USD 6.0M over a three-year period (ending December 31, 2013). After earning its initial 51% interest, Terra Gold has the option to increase its ownership to 80% with an additional USD 3.05M investment in the 4th year of the agreement, thereby bringing the required capital investment total to USD 9.05M. Terra Gold's minimum 2013 work commitment to complete its required USD 6.0M investment is USD 2.5M. Raven is also currently entitled to an NSR of between 0.5% and 5% on all precious metal production and a 1% NSR royalty on all base metal production.
About Corvus Gold Inc.
Corvus Gold Inc. is a North American focused gold exploration and development company with projects in Nevada, Alaska and Quebec. The Company's projects represent a spectrum of early-stage to advanced gold opportunities. Corvus is committed to building shareholder value through a rapidly advancing gold project in Nevada and new growth discoveries on its other assets. The Company looks to advance its earlier and more risky discoveries via partner funded exploration work into carried and/or royalty interests that provide shareholders with exposure to low financial risk on future potential gold production.
On behalf of
Corvus Gold Inc.
(signed) Jeffrey A. Pontius
Jeffrey A. Pontius,
Chairman and Chief Executive Officer
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable Canadian and US securities legislation. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding the potential identification by the Company of mineral deposits, resources or reserves on its properties, completion of the sale by Raven to Terra Gold of Raven's current participating interest in the Terra Project, the proposed use of the proceeds anticipated to be received by Raven in connection with such transaction, the potential for the development of any mining operation at Terra or North Bullfrog, the potential for any mining or production at North Bullfrog or Terra, the potential for the Company to receive any payment on account of its retained royalty at Terra or to secure or receive any other royalties in the future, the possibility that business activities by the Company will result in its shareholders having exposure to low financial risk on future potential gold production, business and financing plans and business trends, are forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. In addition, information with respect to any proposed activities of Terra Gold./WestMountain on the Terra property has been provided by Terra Gold/WestMountain, who is, and will continue to be following the sale of Raven's participating interest in the Terra Project to Terra Gold, the operator of the Terra Project and, as such activities are not within the control of the Company, the Company takes no responsibility for the accuracy of such statements. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company or Terra Gold/WestMountain are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, the failure of the parties to agree on, settle or execute formal documentation with respect to the sale by Raven of its participating interest in the Terra Project, the inability of WestMountain to secure all required regulatory acceptances/approvals required for the purchase transaction, the inability of Terra Gold/WestMountain to raise the funds required to complete the proposed purchase of Raven's participating interest, variations in the market price of any mineral products the Company or Terra Gold/WestMountain may produce or plan to produce, the inability of the Company or Terra Gold/WestMountain to obtain any necessary permits, consents or authorizations required for its or their activities, the inability of the Company or Terra Gold/WestMountain to produce minerals from their properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement their respective business strategies, and other risks and uncertainties disclosed in the Company's latest Annual Information Form filed with certain securities commissions in Canada. All of the Company's Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties.
This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.
SOURCE: Corvus Gold Inc.
For further information:
Phone: 1-888-770-7488 (toll free) or (604) 638-3246 / Fax: (604) 408-7499