Columbus Gold Options Dutch Flat Property to Piedmont Mining
Vancouver, British Columbia, Canada. July 12, 2006. Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold” or the “Company”) is pleased to announce that it has entered into an agreement effective July 2nd, 2006 (the “Agreement”) to option its Dutch Flat Property (“Dutch Flat”) to Piedmont Mining Company, Inc. (PIED: Pink Sheets) (“Piedmont”).
Under the terms of this Agreement, Piedmont can earn a 51% interest in Dutch Flat by making an initial cash payment to Columbus Gold of US$35,000 and by incurring US$2 million in exploration expenditures over a five year period including a commitment to incur a mandatory minimum of US$200,000 in exploration expenditures in the first year. After earning a 51% interest, Piedmont will have the option of either i) entering into a joint venture agreement with Columbus Gold whereby Piedmont will own 51% and Columbus Gold will own 49% of the joint venture, or ii) electing to earn an additional 19% of Dutch Flat by funding the completion of a positive feasibility study. On completion of a positive feasibility study, Columbus Gold will then have the option of either i) entering into a joint venture agreement with Piedmont whereby Piedmont will own 70% and Columbus Gold will own 30% of the joint venture, or ii) electing to receive a 2% net smelter return royalty. Columbus Gold will act as operator in the first year of the exploration program.
The Dutch Flat Property consists of 114 unpatented mineral claims, covering approximately 2,355 acres, located in Humboldt County, approximately 20 miles northeast of the town of Winnemucca, Hot Springs Range, Nevada. The property lies at the north end of the Battle Mountain Trend. Subject to net smelter royalties, Columbus Gold currently owns a 100% interest in the property.
The Dutch Flat claims cover all of the historic Dutch Flat mining district which had modest production of gold from both lode and alluvial sources during the early 1900’s. Modern exploration, principally drilling totaling 14,381 feet in 49 holes, was carried out by Amax and Brican Resources Ltd., in the 1980’s.
Dutch Flat geology is dominated by a crudely circular granitic body of Cretaceous age intruding Cambrian sediments. Shales and limy siltstones in the sequence are extensively hornfelsed with quartz veins and veinlets adjacent to the intrusive and along northeast shear and multiple fracture zones.
The Amax and Brican drilling programs outlined a broad zone of low grade (averaging approximately 0.01 ounce per ton (opt)) gold mineralization traceable for 4,000 feet, and open in both directions and at depth, along the southeast margin of the Dutch Flat granite. Surface sampling has returned higher grades (up to 1 opt Au) along structures which were not systematically tested or evaluated in previous programs.
Exploration targets at Dutch Flat include large bodies of disseminated gold in hornfelsed sediments and higher grade vein zones. Columbus Gold has already mapped and sampled the district, and a ground magnetic survey is underway. Three to four thousand feet of reverse circulation drilling to complete the first year’s exploration program is planned. The principle objective of the drilling is largely to evaluate the degree to which previous drilling may have undervalued the free gold content of the property. John Prochnau B.Sc., (Mining Engineering), M.Sc., (Geology), and Director of Columbus Gold is the Qualified Person who has reviewed and approved the technical disclosure of this news release.
ABOUT COLUMBUS GOLD
Columbus Gold has an experienced management group with a strong background in all aspects of the acquisition, exploration, development and financing of precious metal mining projects. The Company owns 100% interests, subject to underlying royalties, in eleven gold projects strategically located along or near Nevada’s most productive gold trends and four non-core silver and copper properties in Arizona. Columbus Gold’s project activities in Nevada and Arizona are managed by Cordilleran Exploration Company (“Cordex”) which is owned and operated by John Livermore and Andy Wallace who have a long and distinguished history of gold discovery and mine development in Nevada.
ON BEHALF OF THE BOARD
Robert F. Giustra
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
For more information contact:
Toll Free: 1-866-689-2599