Agnico Proposed Amendments And Termination Of Rattlesnake Hills Joint Venture
June 6th, 2012, Vancouver, British Columbia: Evolving Gold Corp. (TSX: EVG, OTCQX: EVOGF, FSE: EV7) (the "Company") announces the termination of the Rattlesnake Hills Joint Venture (the "Joint Venture") between EVG and Agnico-Eagle Mines Limited ("Agnico-Eagle"), such termination to be effective June 29, 2012.
On April 10th, 2012 EVG was approached by Agnico-Eagle with a request to amend certain financial commitments of Agnico-Eagle under the Joint Venture due to reductions in Agnico-Eagle's exploration budget for the 2012-2013 season. In its correspondence Agnico-Eagle indicated that it had taken significant write downs on other projects and was experiencing a cash shortage in its exploration budget. As a result, Agnico-Eagle requested deferral of exploration expenditures on the Rattlesnake Hills project to accommodate a "diminished cash flow". Agnico-Eagle expressed its continued interest in the project stating, "With regards to the Rattlesnake Hills project Agnico-Eagle (USA) Limited is fully committed to this venture and are excited about the opportunities it represents to AEM with the discovery of a new gold mine in the US." A further proposal received from Agnico-Eagle on May 9th, 2012 requested even further changes to the JV agreement. The Joint Venture with Agnico-Eagle was established by Evolving Gold for the purpose of furthering exploration work with a well-funded partner. In light of these goals, the Company, although amenable to amending certain terms, was generally unwilling to significantly compromise the payments and exploration expenditures committed to by Agnico-Eagle with respect to the Rattlesnake Hills Project. More specifically, Agnico-Eagle proposed to reduce as much as $11 million from the exploration commitments and cash payments without a reduction in the 70% earn - in. As a result of the inability to reach a compromise that was acceptable to Evolving Gold, Agnico-Eagle provided notice of termination of the Joint Venture.
"Evolving Gold was prepared to negotiate modifications in the Rattlesnake Hills Joint Venture terms to assist its partner, as Agnico-Eagle expressed to us that it 'has experienced some difficult times in the last six months'," stated R. Bruce Duncan, CEO of Evolving Gold. "Evolving Gold believes strongly in the technical merits of the Rattlesnake Hills project. As a Company, Evolving Gold is unwilling to accept major changes in the Joint Venture Agreement, terms that Agnico-Eagle agreed to only one year ago, when the changes would result in unacceptably low exploration expenditure levels." Mr. Duncan continues, "Now that Evolving Gold once again controls 100 percent of the Rattlesnake Hills project we will focus on developing an aggressive exploration program on this large and expanding gold system. Evolving Gold's firm belief in the merits of the Rattlesnake Hills project remains unchanged."
EVG will provide updates to shareholders at such time the Company adopts a plan or strategy.
About Evolving Gold Corp.
Evolving Gold is focused on exploring its gold properties in and adjacent to the productive Carlin district of northern Nevada, and on advancing its gold discovery at Rattlesnake Hills, Wyoming.
For more information about Evolving Gold please visit: www.evolvinggold.com.
On Behalf of the Board of Directors
EVOLVING GOLD CORP.
"R. Bruce Duncan"
President, CEO and Director
FOR MORE INFORMATION, PLEASE CONTACT:
|FORWARD LOOKING STATEMENTS: This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances. All of the forward-looking statements made in this press release are qualified by these cautionary statements and by those made in our filings with SEDAR in Canada (available at www.sedar.com).
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