HALIFAX, Nova Scotia–()–Brigus Gold Corp. (Brigus or the Company) (TSX: BRD) (NYSE Amex: BRD) is pleased to advise that it has reached a settlement agreement in connection with its Huizopa exploration project located in the Sierra Madre Occidental mountains in Chihuahua, Mexico.
In connection with the settlement agreement, the Company has entered into a related sale agreement pursuant to which Brigus has sold its 100% interest in its Mexican subsidiary, Minera Sol de Oro, S.A. de C.V. and its joint venture in the Huizopa Project to the Cormack Capital Group, LLC for proceeds of US$3.5 million, payable over a five-year term, while the Company retains a 3% Net Smelter Royalty (NSR) over future production from the Huizopa Project. Cormack can reduce Brigus NSR to 2% by making a US$1.0 million payment to the Company and may also elect to pay up to 40% of the purchase price through the issuance of common shares in a publicly traded company listed on a recognized U.S. or Canadian national stock exchange. In addition, Brigus will receive a production bonus payment of US$5.0 million within one year of the commencement of commercial production at the Huizopa Project.
The dispute related to the Huizopa Project pre-dated the June 2010 merger between Apollo Gold Corporation and Linear Gold Corp. to form Brigus Gold Corp. Settlement of the dispute allows Brigus to focus on its advanced Canadian asset portfolio while maintaining a significant royalty in the prospective Huizopa Project and receiving payments of up to US$9.5 million. Brigus advanced Canadian asset portfolio includes the Companys flagship Black Fox Complex, including the producing Black Fox Mine, as well as the Companys Goldfields Project, consisting of the Box and Athona gold deposits, where Brigus expects to make a production decision in 2011.
About Brigus Gold
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 in the Timmins gold district of Ontario, Canada. The Black Fox Complex encompasses the Black Fox Mine and Mill, and adjoining Grey Fox-Pike River property, all 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 holds a 100% interest in the Ixhuatan Project located in the state of Chiapas, and a 3% NSR interest in the Huizopa Project, an early stage, gold-silver exploration project located in the state of Chihuahua. In the Dominican Republic, Brigus Gold has a joint venture covering three mineral exploration projects.