TORONTO, ONTARIO--(Marketwired - Sept. 15, 2014) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO U.S. NEWS WIRE SERVICES
Tolima Gold Inc. ("Tolima" or the "Company") (TSX VENTURE:TOM) is pleased to announce certain changes to its existing agreements with Solvista Gold Corporation ("Solvista") with respect to certain properties (the "Properties") located in the Departments of Caldas and Antioquia in Colombia, originally optioned to Solvista by Tolima in 2012, as disclosed in the Company's press release dated July 30, 2012. The Properties are located adjacent to Solvista's Caramanta Project (the "Solvista Project"), which is currently covered by a US$36 million option agreement between IAMGOLD Corporation ("IAMGOLD") and Solvista (the "IAMGOLD Agreement", as disclosed by Solvista's press release dated March 17, 2014). The Properties will also become subject to the IAMGOLD Agreement.
Joint Venture and Option to IAMGOLD
The existing option agreement between Tolima and Solvista contemplated Solvista acquiring an initial 50% interest in the Properties and included certain other rights and obligations that would allow Solvista to earn up to a 100% interest in the Properties. Solvista and Tolima have now agreed to enter into a new arrangement regarding the Properties under which Solvista and Tolima will jointly control the Properties through an equal ownership stake in a newly incorporated Colombian entity ("Newco"), and form a joint venture ("Joint Venture") in respect of the Properties. Newco will then contribute the Properties and become a party to the IAMGOLD Agreement. IAMGOLD will then operate the Properties (along with Solvista's Project) in accordance with the terms and conditions of the IAMGOLD Agreement. The Joint Venture will be inactive until such time as the right, title and interest in any concession comprising the Properties is abandoned by IAMGOLD and transferred back to Newco in accordance with the terms of the IAMGOLD Agreement.
In consideration for entering into the new arrangement with Solvista, Tolima will receive from Solvista an additional 400,000 common shares ("Solvista Shares") as well as a cash payment of $25,000. Tolima will also receive 600,000 Solvista Shares which are due pursuant to the existing option agreement, which are in addition to the 2,400,000 Solvista Shares already received by Tolima. None of the other outstanding rights or obligations of either Solvista or Tolima under their original option agreement will apply under the terms of the new arrangement and the original agreement will be terminated upon the effective transfer of the Properties to Newco. The proposed transaction is subject to the approval of the TSX Venture Exchange.
With the vending in of the Properties the amended IAMGOLD Agreement will provide IAMGOLD with the option to earn up to a 70% interest in the Solvista Project and the Properties upon the completion of US$40 million of qualifying expenditures, an 11% increase from the current earn-in obligations, that includes cash payments to Solvista and Newo, amongst other conditions.
IAMGOLD will be able to earn an initial 51% in Solvista's Project and the Properties by investing a total of $20,000,000 in qualifying expenditures, which will include $900,000 and $100,000 in cash payments to Solvista and Newco, respectively, over a maximum five year period that commenced December 16, 2013. IAMGOLD will be able to earn an additional 19% interest in the Solvista Project and the Properties, for a total 70% interest, by investing a further $20,000,000 in qualifying expenditures over a maximum three year period following the completion of the initial 51% earn-in.
Subject to the satisfaction of the aforementioned conditions, and upon completion of IAMGOLD's 51% or 70% earn-in, as IAMGOLD may elect, Solvista, Newco and IAMGOLD would enter into a joint venture to hold and advance the Solvista Project and the Properties.
IAMGOLD Drilling Program
The Solvista Project and the Properties cover the location of a multi-phase altered copper gold mineralized event that has been shown by Solvista to extend for more than 3.5 km in a general north-south direction. Drilling by Solvista included the discovery of significant copper-gold mineralization at a number of locations that warrant further evaluation. As described in a Solvista press release dated August 20, 2014, IAMGOLD has completed a number of follow-up studies on the Solvista Project that have helped further define drill targets and has recently commenced a significant diamond drill program. Drilling is expected to continue for several months on the Solvista Project and the Properties. Tolima will provide additional details of the IAMGOLD drilling program and results as they become available over the coming months.
Three of the Solvista Project's multiple targets (El Reten, El Corral and Ajiaco Sur) and a portion of the Properties are located within a regional environmental designation referred to as the district of integrated management ("DMI"). Under the terms of the DMI there is currently a prohibition against open pit mining within the DMI. Solvista has provided a written submission to the regional environmental authority in Corantioquia requesting the immediate removal of the DMI designation with respect to the Solvista Project and the Properties. As disclosed in Solvista's press release dated September 16, 2013, exploration within the DMI has been temporarily halted by Corantioquia until Solvista's application for removal of the DMI designation has been considered. In October 2013 Corantioquia informed Solvista that during the period that a decision on the removal of the DMI designation was being considered exploration within the DMI could resume upon the receipt of an acceptable environmental management plan. IAMGOLD and Solvista jointly presented an environmental management plan to Corantioquia in March of this year.
Commenting on the Joint Venture and the IAMGOLD drilling program, Tolima's CEO, Jaime Lopez, stated "We are very pleased with the arrangement with Solvista and that IAMGOLD has commenced drilling operations in the area. We look forward to working with Solvista and IAMGOLD to continue to advance the exploration of the Properties."
About Tolima
Tolima is a gold exploration and development company with contractual interests in gold properties in Colombia. Tolima's mineral properties are the Ancal/Marmato Project, located in the Marmato/Caramanta district in the Caldas and Antioquia Departments of Colombia, and the Nortol project, including the Papayo property, located in the Northern part of the Tolima Department of Colombia. Tolima has recently disposed of its Remedios Project, located in the Remedios/Segovia mining district in Colombia. Tolima continues to explore opportunities for the acquisition of additional mining interests in prospective mining districts in Colombia.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management of Tolima regarding the Joint Venture, the option to IAMGOLD, and the IAMGOLD drilling program. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, and include discussion of what the parties must do to complete the matters described herein. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits Tolima will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) the occurrence of any events that prevent the parties from performing the acts necessary to complete the matters described herein; (2) failure to obtain the approval of the TSX Venture Exchange; (3) current economic conditions and the state of mineral exploration and mineral prices in general; and (4) other factors beyond the parties' control. These forward-looking statements are made as of the date of this news release and Tolima assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements, except in accordance with applicable securities laws. Additional information about Tolima and these and other assumptions, risks and uncertainties, are available in its public filings with Canadian securities regulators, available under its profile on SEDAR at www.sedar.com.
Contact Information:
Lisa-Marie Iannitelli
(416) 362-4441