Evolving Gold Closes First Tranche of Prosperity Goldfields Shares Sale, Restructures Carlin Nevada Property Payments
VANCOUVER, March 12, 2012 /PRNewswire/ - Evolving Gold Corp. (TSX: EVG, OTCQX: EVOGF, FSE: EV7) ("Evolving Gold" or the "Company") is pleased to announce the closing of the first tranche of the sale of a portion of its interest in Prosperity Goldfields Corp. ("Prosperity") previously announced on February 28, 2012. The first tranche consists of aggregate proceeds of approximately $2,800,000 to Evolving Gold.
The Company expects the second tranche to close concurrent with the amalgamation (the "Amalgamation") of Smash Minerals Corp. and Prosperity, originally announced by the parties on January 5, 2012, subject to receipt of any required regulatory approvals. The second tranche consists of aggregate proceeds of approximately $1,200,000. All purchase funds in connection with the second tranche have been deposited in trust pending closing.
Proceeds from the sale will be used to advance exploration work on the Company's Nevada projects and for general working capital.
R. Bruce Duncan, CEO of the Company, stated "We are pleased to conclude this first tranche of the sale of Prosperity Goldfields shares. This sale raises a significant amount of money for Evolving Gold without any dilution to our shareholders. It will allow us to move forward with a robust drilling program at our Carlin, Humboldt and Jake Creek gold projects in Nevada."
The Company is also pleased to announce that it has re-negotiated the terms of the Humboldt Property lease payments which were made in connection with the land acquisition and aggregation carried out during 2008-10. The lease payments (expressed in US dollars) are secured by promissory notes, which were revised to the following terms:
| a) | $3,200,000 bearing an interest rate of 4% until February 10, 2016, at which time the interest rate will be the Wall Street Journal bank prime lending rate (the "Prime Rate") plus 1%. Payments of $523,000 were made on February 10, 2012 and will be due each year thereafter until February 10, 2018 at which time the balance remaining will become due and payable. |
| b) | $1,800,000 bearing an interest rate of 4% until February 10, 2016, at which time the interest rate will be the Prime Rate plus 1%. Payments of $295,000 were made on February 10, 2012 and will be due each year thereafter until February 10, 2018 at which time the balance remaining will become due and payable. |
| c) | $2,200,000 bearing an interest rate of 4% until February 10, 2016, at which time the interest rate will be the Prime Rate plus 1%. Payments of $360,000 were made on February 10, 2012 and will be due each year thereafter until February 10, 2018 at which time the balance remaining will become due and payable. |
The effect of the amendments are to reduce the annual cost of maintaining the Company's vast, highly-prospective land position on the prolific Carlin trend (Nevada), and to extend smaller payments over a longer period of time. In consideration for the amendment the Company will pay interest at the rate described above. This amendment ensures prudent and effective use of the Company's finances, with an increased focus of expenditures on drilling and exploration and discovery activities.
"We are pleased with these amendments to the lease payments, as they will help us focus on the exploration and discovery process on our highly prospective and large land holdings in our Carlin and Humboldt gold projects. As a management team we are committed to prudent financial management and ensuring an aggressive, discovery oriented exploration program," stated R. Bruce Duncan, CEO.
About Evolving Gold Corp.
Evolving Gold is focused on exploring its gold properties in and adjacent to the productive Carlin district of northern Nevada, and on advancing its gold discovery at Rattlesnake Hills, Wyoming. For more information about Evolving Gold please visit: www.evolvinggold.com.
On Behalf of the Board of Directors
EVOLVING GOLD CORP.
"R. Bruce Duncan"
R. Bruce Duncan
CEO and Director
FORWARD LOOKING STATEMENTS: Certain of the statements and information in this press release constitute "forward-looking statements" or "forward-looking information". Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "expects", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward-looking statements or information relate to, among other things, the closing of the transaction involving the sale of a portion of the Company's controlling stake in Prosperity. Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: the successful completion of the proposed transaction between Prosperity and Smash Minerals Corp., results of exploration activities and development of mineral properties, fluctuations in the marketplace for the sale of minerals, the inability to implement corporate strategies, the ability to obtain financing, currency fluctuations, general market and industry conditions and other risks disclosed in the Company's filings with Canadian Securities Regulators.
This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's filings with Canadian Securities Regulators. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company's forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.
SOURCE Evolving Gold Corporation
Share this article