CANYON RESOURCES OPTIONS NEVADA PROPERTIES TO GOLDEN PREDATOR
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Exhibit
99.1
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| FOR IMMEDIATE RELEASE: February 20, 2008 |
PR08-03
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CANYON
RESOURCES OPTIONS NEVADA PROPERTIES
TO
GOLDEN PREDATOR
Golden,
CO - Canyon Resources Corporation (AMEX:CAU)
(“Canyon”), a Colorado-based mining company, has entered into an Option
Agreement, whereby Golden Predator Mines US Inc. (“Golden Predator”), a
wholly-owned subsidiary of Golden Predator Mines Inc. of Vancouver British
Columbia, shall assume Canyon’s interest in the advanced stage Adelaide and
Tuscarora gold exploration properties (the “Properties”) located in Humboldt and
Elko Counties in Nevada. On February 15, 2008, Golden Predator made an initial
payment to Canyon of approximately $507,000 on closing of the
transaction.
“This
transaction is another step in Canyon’s previously announced strategy to gain
value from its underutilized assets in order to allow the Company to focus
on
its core gold development projects. Golden Predator shall assume Xxxxxx’s
remaining spending obligations on these Properties of $2.75 million over the
next four years, while paying to Canyon up to an additional $1.05 million over
that same period. Canyon shall retain a one time production payment on the
Properties and an ongoing royalty position. Golden Predator is well positioned
with its ownership of the nearby Springer mill facility, located near
Winnemucca, Nevada, to move either or both of these properties toward production
as gold resources are developed on the Properties,” states Xxxxx Xxxxxxx,
President and CEO.
Canyon’s
interest in the Properties was acquired from Newmont Capital Limited (“Newmont”)
in December 2006. Golden Predator will assume Canyon’s obligations to Newmont as
defined in the Adelaide Project and Tuscarora Project Minerals Lease, Sublease
and Agreement dated December 29, 2006 (“Minerals Lease”) between Canyon and
Newmont. Canyon met its $250,000 first year spending obligation under this
Minerals Lease during 2007.
Golden
Predator has guaranteed the second year work commitment on the Properties of
$400,000. Canyon will also receive a second payment equivalent to $250,000
in
either cash or stock of Golden Predator prior to December 29, 2008. If Golden
Predator elects to complete the assumed work commitments under the Mineral
Lease, Canyon could receive additional payments of approximately $800,000 in
either cash or stock of Golden Predator plus a production payment and royalties.
Canyon
will retain a net smelter returns royalty of up to 1.5% but not less than 0.5%
depending on the total royalty burden on individual claims of the Properties
and
the prevailing quarterly average gold price.
The
royalty burden on the Properties is capped at 5.5% when gold price is less
than
$700 per ounce and escalates to 6.5% as the price of gold increases to over
$900
per ounce. The royalty will apply to all metals and minerals produced and sold
from the Properties. In addition, when a positive production decision has been
made, Canyon may receive a production payment equivalent to $2.50 per ounce
of
gold or gold equivalent ounce based on the established reserves or measured
and
indicated ounces at that time, but not less than $250,000 for each property.
Golden
Predator may return one or both Properties upon 60-days notice to Canyon,
resulting in adjustments to the work commitments and corresponding payments
to
Canyon. Upon notice of return of one or both Properties, Canyon may choose
to
assume the obligations underlying the Mineral Lease or return the rejected
property to Golden Predator and Golden Predator may elect to terminate the
property directly with Newmont. Golden Predator may assign any or all of its
interest in the Properties, subject to the Canyon and Newmont obligations,
to an
unaffiliated party with Canyon’s consent.
As
part
of this Option Agreement, Canyon entered into a simultaneous Assumption and
Assignment Agreement with Golden Predator to assume its lease interest in 20
unpatented mineral claims in Humboldt County, Nevada. These claims are adjacent
to Canyon’s existing Mt. Xxxx claims and allows for further consolidation of
that property.
For
additional information on Canyon Resources, please visit our website at
xxx.xxxxxxxxxxxxxxx.xxx.
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This
press release includes “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section
21E of
the Securities Exchange Act of 1934 as amended. Such forward-looking
statements include, among others, potential production payments and
royalty payments by Golden Predator in the future. Factors that could
cause actual results to differ materially from these forward-looking
statements include, among others: the volatility of gold prices;
potential
operating risks of mining, development and expansion; the uncertainty
of
Golden Predator’s future decisions related to the Properties; and
environmental and governmental regulations; availability of financing;
the
outcome of litigation, as well as judicial proceedings and force
majeure
events and other risk factors as described from time to time in the
Company’s filings with the Securities and Exchange Commission. Most of
these factors are beyond the Company’s ability to control or
predict.
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FOR
FURTHER INFORMATION, CONTACT:
Xxxxx
Xxxxxxx, President and CEO (000) 000-0000
Xxxxxxx
Xxxxxxx, Investor Relations (000) 000-0000
xxx.xxxxxxxxxxxxxxx.xxx
