RGL
ASX ANNOUNCEMENT
7 April 2008
The Manager
Companies Announcement Platform
Australian Stock Exchange Limited
REPUBLIC GOLD ACQUIRES THE 720,000 OUNCE AMAYAPAMPA GOLD PROJECT
FROM VISTA GOLD CORP
The Directors of Republic Gold Limited (“Republic” or the “Company”) today announce that
Republic has entered into a transaction with Vista Gold Corp (“Vista Gold”) of North America
to purchase the 720,000 ounce Amayapampa Gold Project in Bolivia ("Project").
Key Points
• The Amayapampa Gold Project has an estimated Mineral Resource of 720,000
ounces of gold, 92% of which is in the measured and indicated categories.
• Republic pays no money upfront to Vista Gold and will eventually pay Vista Gold
US$3,000,000 plus a royalty after the Project reaches commercial production.
• Much of the work required to complete the Bankable Feasibility Study for the Project
has already been completed.
• The Company sees the Canadian market as likely destination for the Project and it’s
financing.
• The Company recently employed a number of new staff for its Mareeba Head Office
with the view to aggressively pushing the Company’s Far North Queensland projects.
Republic’s Managing Director; John Kelly, said:
“The Company’s previous efforts in Bolivia were criticised due to the complicated structure of
the deal with Luzon Minerals Limited of Canada. The current transaction is very simple and
gives Republic ownership of Amayapampa for the payment of US$3,000,000 after
commercial scale gold production commences at the Project, with an attendant gold royalty.
Vista Gold actively engaged Republic for this transaction because it understood Republic’s
experience with the Project, and that the Company has a highly experienced technical team.
Republic has gained a thorough understanding of the resources business in Bolivia in the
past few years, and this transaction makes great use of the Company’s previous significant
effort in Bolivia. Concurrently with the Bolivian experience, the Company has also gained
considerable experience with the Canadian markets, which it sees as the ultimate
destination for the Project and its financing. Discussions with a Canadian broker were part
of Republic’s due diligence for the purchase of the Project. This transaction complements
Republic’s existing projects in Far North Queensland by providing significant additional nearterm
production potential of a similar orogenic geological style. The Company has employed
a number of new technical staff at its Mareeba Head Office in the past month and will be
pushing its Far North Queensland projects aggressively when the wet season finishes."
Amayapampa has a current estimated Mineral Resource of 720,000 ounces of gold, as
detailed below. The Company believes this Mineral Resource has significant potential for
expansion. The Project also has significant potential for the discovery of the antimony
mineral, stibnite. Amayapampa has been extensively drilled and the extensive underground
workings have been sampled as well. All the necessary other work to complete a Bankable
Feasibility Study such as metallurgical testwork, plant design and environmental studies
have completed on the Project.
This transaction increases the Company’s Mineral Resource base by 276% to 1,218,000
ounces of gold, plus 8,000 tonnes of stibnite, as detailed below.
Transaction Details
Republic is buying all of the shares in Vista Gold’s wholly-owned subsidiary, Vista Gold
(Antigua) Corp, a company incorporated in Antigua and Barbuda ("Vista Gold (Antigua)").
Vista Gold (Antigua) wholly-owns a number of subsidiary companies in Bolivia, including
Minera Nueva Vista S.A. which is the registered holder of the concessions that comprise the
Amayapampa Project.
The Company pays Vista Gold no cash upfront and will pay three equal payments of US$1M,
the first once commercial production has commenced at the Project and then on the first and
second anniversaries of this occurrence.
The Company will also pay a graduated royalty to Vista Gold according to the following table.
Gold Price: US$/oz Royalty Payable to Vista Gold
$500.00 or less 0.00%
$500.01 to $650.00 2.00%
$650.01 to $750.00 3.00%
$750.01 and above 3.50%
The royalty is capped to a production maximum of 720,000 troy ounces of gold.
In buying the chain of companies from Vista Gold, Republic will be taking over the
responsibility for litigation commenced against Minera Nueva Vista S.A. by Mrs Gladys Radic.
Vista Gold has agreed to loan the Company US$350,000 for six months in large measure to
finalise this litigation. Both Vista Gold and the Company believe the litigation is completely
without merit.
Vista Gold has a first right of refusal over the Project. Vista Gold also has a right of
repurchase of the Project if the Company hasn’t completed financing to put the Project into
production within 5 years of the Closing. Vista Gold will pay the Company 75% of the
aggregate costs incurred by the Company on the Project if this repurchase right is exercised.
The agreement provides a list of warranties by Vista Gold with a warranty period of 12
months.
Update on the Amayapampa Project
Since the Company ceased involvement with Amayapampa approximately 12 months ago,
the Project has been advanced significantly. The main issue the Company had been dealing
with previously had been social issues in the village of Amayapampa and surrounding
communities. The Bolivian senior employees of Minera Nueva Vista S.A. have significantly
advanced this issue with the commencement of a training programme for the villagers. A
total of 280 people are employed under this programme, giving many of them a guaranteed
income in safe working conditions for the first time in their lives. The programme is designed
to give the villagers literacy and numeracy skills and then train them for mine operations
roles. During the Company’s due diligence, a meeting was held in the village with over 200
of those people employed under the training programme. The spirit of this meeting and its
outcome was excellent.
The second major advance with the Project was the granting in mid-2007 of a new
Environmental Permit for the mine. This work was commenced under the Company’s
guidance. During the Company’s due diligence, the Company met with the Prefecto of the
Department of Potosi (equal to a State Premier in Australia) and his Mining and
Environmental Advisors who were all responsible for guiding this Permit through the Potosi
permitting system.
The Company also met with Bolivia’s Minister for Mining and Metallurgy who assured the
Company that Western investment in the mining sector in Bolivia was very welcome and very
safe.
Work Required to Progress the Project
Vista Gold completed a number of Bankable Feasibility Studies culminating in a final study in
2000. Luzon Minerals Limited partially updated this last study in an NI 43-101 report that
was accepted by the Toronto Ventures Stock Exchange as a Scoping Study in 2006. When
the Company’s involvement in the Project was terminated 12 months ago, it had nearly
completed a fully updated Bankable Feasibility Study with the main exception being a
detailed study on a new tailings dam, which it had started work on.
The following work is seen as necessary to complete a Bankable Feasibility Study for
Amayapampa in order that financing for the Project can be sought: -
• Continue the workers’ training programme.
• Review the geological block model constructed by the Company.
• Finalise pit optimisation and mine scheduling work.
• Complete a study on the new tailings dam.
• Update the operating and capital costs for the project.
• Gain a sign-off on the study by an independent consulting firm.
• Finalise issues with the metallurgical processing route and plant design.
Monthly operating costs for Bolivia are anticipated to be approximately $110,000. The cost
to complete the feasibility study is estimated at $300,000. The Company will also need to
finalise an old transaction commenced by Minera Nueva Vista S.A. to buy 25% of some of the
concessions at Amayapampa for US$500,000.
Inward Investment into Bolivia
There is continual and significant inward investment into Bolivia mainly from North American
companies. Coeur d’Alene Mines Corp. is about to commission it’s US$174M San Bartolome
Silver Project in Potosi. Apex Silver Mines Limited has been operating its +US$750M San
Cristobal Silver Project for approximately 12 months. In February, Atlas Precious Metals Inc.
announced a transaction with the Bolivian state mining company, COMIBOL, to buy
into the Karachipampa smelting complex for US$141M. Eighteen months ago Jindal Steel
and Power Ltd. from India announced a +US$2B deal with the Bolivian Government for the El
Mutun iron ore project.
Potential of Bolivia
The purchase of Vista Gold (Antigua) and the Subsidiaries gives the Company a base in
Bolivia with a small number of staff that it has worked closely with before. One of the senior
staff is a pre-eminent and highly respected mining engineer in Bolivia who has a wide
knowledge of the Bolivian mining industry. The other senior staff member is a lawyer who is
highly experienced in the Bolivian mining industry through her long association with Vista
Gold and other mining companies.
As Amayapampa and other projects the Company knows of are in identical geological settings
to those found in the Company’s Hodgkinson Basin project area and in Central Victoria, the
Company considers that the Altiplano region of Bolivia has strong economic potential. The
Company will actively seek other projects in Bolivia to complement its knowledge and
understanding of the geology of the region.
The Directors of the Company see this transaction as another step in building a gold
company with substantial mineral resources and ore reserves. To pursue this important goal,
the Company has recently employed a number of new staff for its Mareeba Head Office with
the view to aggressively pursuing the Company’s existing Far North Queensland projects.
Yours faithfully
John Kelly
Managing Director
Republic Gold Limited
For more information, please contact: John Kelly on 0418 577 759 or Tony Nagy on 0413
645 126.
Republic Gold Limited
ACN 106 399 311
PO Box 2317 Mareeba Qld 4880 Australia
Phone + 61 7 4092 2594 Fax + 61 7 4092 3797 Mobile 0418 577 759
Registered Office: 144 Cobra Road Mareeba QLD 4880 Australia
E-mail: [email protected]
www.republicgold.com.au
Mineral Resource Statement
Gold Resources
MEASURED INDICATED INFERRED TOTAL
TONNES GRADE TONNES GRADE TONNES GRADE TONNES GRADE GOLD
('000) Au g/t ('000) Au g/t ('000) Au g/t ('000) Au g/t Ounces
TOTAL NORTHCOTE 1 1,295 2.3 1,056 1.8 635 1.8 2,986 2.0 195,000
TOTAL TREGOORA --- --- 1,605 1.8 1,242 1.6 2,847 1.7 156,000
ATRIC 1 --- --- 890 1.9 46 1.7 936 1.9 57,000
REEDY-HURRICANE --- --- --- --- 797 1.3 797 1.3 33,000
TOTAL HODGKINSON BASIN 1,295 2.3 3,550 1.8 2,721 1.5 7,566 1.8 441,000
TOTAL LUCKY DRAW NSW 2 --- --- 176 2.2 490 2.9 666 2.7 57,000
TOTAL AMAYAPAMPA 5,150 1.6 9,030 1.4 1,960 1.0 16,140 1.4 720,000
TOTAL MINERAL RESOURCES 6,445 1.7 12,756 1.5 5,171 1.0 24,372 1.6 1,218,000
Antimony Resources
MEASURED INDICATED INFERRED TOTAL
TONNES GRADE TONNES GRADE TONNES GRADE TONNES GRADE TONNES Sb
NORTHCOTE CONTAINED
ANTIMONY
1,295 0.3 1,056 0.2 635 0.3 2,985 0.3 8,000*
* This tonnage equates to approximately 47,000 ounces of gold at a gold price of AUD$1,010 and Sb
price of US$5,900/t antimony before any metallurgical treatment parameters are taken into account.
Notes:
1 Figures are Republic’s equity share of these projects, being 75% of the Northcote and Lucky Draw
projects and 90% of the Atric and Reedy projects.
2 Resources for Lucky Draw have been estimated by a competent person in accordance with the JORC
Code and have been adopted for this report. The Company is in the process of making its own
estimates by block modelling, but has no reason to doubt the existing resources at this stage. For the
Northcote resources, allowances have been made for depletion by the recorded mining amounts for
the 1990’s Nittoc mining campaign. Resources may not sum to equal totals due to rounding.
Resources for Amayapampa have been published in a Canadian NI-43101 report which meets the
standards for reporting under the JORC Code.
Location Grade Interpolation
Method
Section Spacing
metres
COG
g/t Au Oxide
COG
g/t Au Sulphide
Oxide
Density
Sulphide
Density
HODGKINSON BASIN
Northcote 1 Block Model ID2 25 0.5 1.0 2.0 2.7
Tregoora Block Model ID2 25 0.5 1.0 2.0 2.7
Atric Block Model ID2 25 N/A 0.5 2.5 2.5
LUCKY DRAW
Lucky Draw West Contoured WAA -- N/A 0.5 2.5 2.5
Hackney’s Creek Upper Pod Sectional WAA 25 N/A 0.5 2.5 2.5
Hackney’s Creek Lower Pod Sectional WAA 25 N/A 1.0 2.5 2.5
BOLIVIA
Amayapampa Block Model Ordinary
Kriging
-- 0.4 0.4 2.78 2.78
1 Top cuts of 30 Au g/t for East Leadingham and 15 Au g/t for Emily and Emily South were applied to
composite grades for grade estimation with all other deposits at Northcote using 10 Au g/t top cuts.
A top cut of approximately 40 Au g/t was applied to the Amayapampa model.
Resource Estimation Parameters
Notes Accompanying The Mineral Resources Statement
Information in this report that relates to Mineral Resources for Republic Gold Limited is based on
information compiled by Chris Roberts, Republic Gold’s Chief Geologist, a full-time employee of the
company and a member of the Australasian Institute of Mining and Metallurgy and the Australian
Institute of Geoscientists. It is also based on information estimated by Kerrin Allwood, Republic Gold’s
Resource consultant, a member of the Australasian Institute of Mining and Metallurgy. Both Chris
Roberts and Kerrin Allwood have a minimum of five years experience in the estimation, assessment
and evaluation of Mineral Resources and Ore Reserves. Information in this report that relates to
Mineral Resources for Amayapampa is based on information reviewed by John Kelly, Republic Gold’s
Managing Director, a member of the Australasian Institute of Mining and Metallurgy who has a
minimum of five years experience in the estimation, assessment and evaluation of Mineral Resources
and Ore Reserves. John Kelly, Chris Roberts and Kerrin Allwood have significant experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which
they are undertaking to qualify as a Competent Person as defined in the 2004 edition of the
“Australasian Code for Reporting of Mineral Resources and Ore Reserves”. John Kelly, Chris Roberts
and Kerrin Allwood consent to the inclusion in this report of these matters based on the information in
the form and context in which it appears.
Location Map For Amayapampa
The Amayapampa Camp in the Foreground & Deposit on the Hill Behind the Camp
Old Workings on the Surface of the Amayapampa Deposit
Meeting of the Amayapampa Miners
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