Columbus Gold Signs Option Agreement On Montagne d'Or Gold Deposit

 

VANCOUVER - Columbus Gold Corp. has executed the definitive option agreement (the Agreement) with major gold producer Nord Gold N.V. contemplated in the binding letter of intent dated September 17, 2013 under which Nord Gold has been granted the right to earn a 50.01% interest in certain licenses at Columbus Gold's 100% owned Paul Isnard gold project in French Guiana, which host the 5.37 million ounce Montagne d'Or gold deposit.

Pursuant to the terms, Nord Gold must pay US$4.2 million in cash to Columbus Gold no later than May 21, 2014. The US$4.2 million payment is mandatory and is not subject to any conditions. In addition, during the earn-in period, Columbus Gold is the operator and benefits from a 10% management fee on certain expenditures; the 2014 work program at the project is budgeted at US$11.8 million.

Robert Giustra, CEO of Columbus Gold, commented on the terms of the deal in September 2013: "This agreement is exceptional not only by its requirement for an experienced and world class mine developer to fund a considerable amount of spending but also for the fact that Columbus Gold shareholders retain half the project at feasibility. In addition, the deal provides Columbus Gold with the option to participate in mine construction or to delegate it to Nord Gold for a resulting significant and valuable equity interest for Columbus Gold shareholders in a large producing mine."

A 26,600 meter, 135 hole drilling program is currently underway at Montagne d'Or which contains a NI 43-101 compliant inferred gold resource using a cut-off grade of 0.3 g/t of 5.37 million ounces of gold within 117.1 million tones at an average grade of 1.43 g/t. Using a cut-off of 1 g/t the deposit hosts 4.15 million ounces of gold within 58.1 million tones at an average grade of 2.22 g/t.