TORONTO - Desert Gold Ventures Inc. (TSX-V: DAU) (the "Company" or "Desert Gold") announces that it received notice from Kinross Goldbanks Mining Company ("KGMC") advising that KGMC has elected to exercise its pre-emptive right and acquire Desert Gold's 50% participating interest in the Goldbanks mineral exploration project located in Pershing County, Nevada, USA (the "Goldbanks Project") on the same price and on the same terms and conditions set forth in the purchase agreement dated July 10, 2012, as amended by amending agreement dated August 10, 2012 (the "Winnemucca Agreement") entered into between Desert Gold and Winnemucca Gold Corp. ("Winnemucca").
Accordingly, KGMC and Desert Gold closed the purchase agreement on October 15, 2012 (the "Closing") whereby Desert Gold will receive an aggregate cash payment of $3,500,000, of which $850,000 was paid on Closing, $650,000 is payable six months after Closing and $2,000,000 is payable 12 months after Closing.
As a result of the exercise by KGMC of its pre-emptive right, the Winnemucca Agreement is terminated and Desert Gold will pay Winnemucca a break fee of 8% of the aggregate value of the consideration agreed to be received by Desert Gold for its interest in the Goldbanks Project.
Desert Gold’s CEO, Roeland van Kerckhoven commented. “We are delighted to close this transaction successfully with Kinross. The sale of Goldbanks will provide our company with important working capital in a very challenging capital markets environment without diluting our shareholders through the issuance of additional capital stock. We intend to use these cash flows to further develop our properties in Africa as we move ever closer to our goal of going into production.”
About Desert Gold Ventures Inc.
Desert Gold Ventures Inc. is an advanced exploration and development company which holds a portfolio of advanced mineral projects located in Rwanda, Mali and Senegal.
This news release has been prepared on behalf of the Board of Directors of Desert Gold, which takes full responsibility for its contents.
FOR ADDITIONAL INFORMATION CONTACT:
Jared Scharf, Chief Financial Officer
Tel. (416) 662-3971
For further information on Desert Gold Ventures Inc. please visit our website at: www.desertgold.ca
This press release includes certain "forward-looking statements". All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are "forward-looking statements". All statements regarding the successful completion of the sale of the Goldbanks project and achieving commercial production on the Company's properties in Africa are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. We caution you that such "forward looking statements" involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. For additional information on such risks, please consult “Risks and Uncertainties” found on page 14 of the Company’s Management Discussion and Analysis for the year ended December 31, 2011. The Company expressly disclaims any obligation to update any forward-looking statements except as may be required by law.
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