Brigus Gold Agrees to Sell Calais Notes for USD $6.0 Million
HALIFAX, Nova Scotia--(BUSINESS WIRE)-- (NYSE Amex: BRD; TSX: BRD) Brigus Gold Corp. (Brigus or the Company) has entered into an agreement with New West Capital to sell the outstanding Calais Notes (Notes) for USD $6.0 million. To date, Brigus has received payments totaling USD $500,000. On June 30, 2012, the company will receive an additional USD $1.0 million followed by the remaining USD $4.5 million, payable on August 31, 2012.
The Notes were originally acquired as consideration when the Company sold a non-core asset in 2010 and were originally valued and recorded at $3.4 million in Brigus accounts. When combining the $1.2 million that was repaid in 2011 from Calais Resources Inc. with the proceeds from this sale, the Company will receive a total of $7.2 million in cash resulting in a $3.8 million gain on sale of these Notes.
Proceeds of the sale will be used to buy back one percent of the gold stream on the Black Fox Mine. In 2010, Brigus entered into a gold stream agreement for 12 percent of the gold production from the Black Fox Mine for an upfront payment of $56.3 million and an ongoing per ounce payment of $500. Brigus has the option to reduce the gold stream to six percent for a cost of $36.6 million. The company plans to exercise this option and is currently investigating other non-dilutive ways to fund a repurchase of the remaining five percent.
We are very pleased to have sold these Notes at a significant premium to our book value, said Wade Dawe, Brigus President and CEO. This sale will enable us to begin buying back half of the gold stream.
For full details on the Sandstorm agreement please visit the Companys website at www.brigusgold.com or SEDAR.
About Brigus Gold (BRD)
Brigus is a growing gold producer committed to maximizing shareholder value through a strategy of efficient production, targeted exploration and select acquisitions. The Company operates the wholly owned Black Fox Mine and Mill in the Timmins Gold District of Ontario, Canada. The Black Fox Complex encompasses the Black Fox Mine and adjoining properties in the Township of Black River-Matheson, Ontario, Canada. Brigus is also advancing the Goldfields Project located near Uranium City, Saskatchewan, Canada, which hosts the Box and Athona gold deposits. In Mexico, Brigus has granted Cangold Limited the option to acquire a 75% interest in the Companys Ixhuatan Project located in the state of Chiapas. In the Dominican Republic, Brigus has signed an agreement to sell its remaining interests in three mineral exploration projects.
Cautionary and Forward-Looking Statements
Statements contained in this news release, which are not historical facts, are forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. All statements regarding the ability of the Company to achieve its production, total cash costs, steady state annual production and mining rate estimates; estimated average gold grades for the open pit and underground operations; increase in gold production; increase in profitability; exploration drill results and resource additions, are forward-looking statements and estimates that involve various risks and uncertainties. This forward-looking statements include, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, the outcome of legal proceedings, the issue of permits, the size and quality of the Company's mineral resources, progress in development of mineral properties, future production and sales volumes, capital and mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, and the financial results of the Company.
Important factors that could cause actual results to differ materially from these forward-looking statements include environmental risks and other factors disclosed under the heading Risk Factors in Brigus most recent Annual Information Form and Management Discussion and Analysis filed under the Companys name at www.sedar.com and annual report on Form 40F filed with the United States Securities and Exchange Commission at www.sec.gov as well as elsewhere in Brigus documents filed from time to time with the Toronto Stock Exchange, the NYSE Amex Equities, the United States Securities and Exchange Commission and other regulatory authorities. All forward-looking statements included in this news release are based on information available to the Company on the date hereof. The Company assumes no obligation to update any forward-looking statements, except as required by applicable securities laws.
Brigus Gold Corp.
Jennifer Nicholson, CA, 902-442-7186
Executive Vice President
Katherine Burgess, 902-442-7184
Manager, Stakeholder Relations
Source: Brigus Gold Corp.Copyright Business Wire 2012