High Desert Gold Corporation (TSX VENTURE:HDG)(PINK SHEETS:HDGCF) announced today that Norvista Resources Corporation a private Canadian corporation headquartered in Toronto, has exercised the option on the Company's Canasta Dorada gold project located in Sonora, Mexico.
Under the agreement, as previously reported (see HDG PR10-13, July 2, 2010), Norvista had a six-month option to acquire a 51% interest in a wholly- owned subsidiary of HDG, to be established ("Newco") for US$1.5 million. Newco will be set up to hold all the HDG property interests in the Canasta Dorada Project. Norvista will be manager of the project under the direction of Mr. Rick Adams, most recently a founder and director of Castle Gold Corporation ("Castle Gold"). Under the agreement, Norvista will then be obligated to take Newco public within one year or risk losing operatorship.
Ralph Fitch, HDG President and CEO, stated, "I believe as I previously stated in the July 2 announcement that this is an excellent opportunity for the Company and for our shareholders. Newco will be led by several former members of the Castle Gold management team. Castle Gold successfully developed and operated two open-pit, heap-leach gold mines in Mexico and Guatemala, and was acquired by Argonaut Gold Corp. for gross proceeds of approximately Cdn$110 million during the first quarter of this year. Norvista's immediate focus will be to explore extensions of the mineralization already defined by HDG's initial drill program. This affords the Company the opportunity to advance Canasta Dorada without further expense to HDG or share dilution, while at the same time, allowing our management team to focus on advancing the two very promising gold projects in our portfolio, Gold Springs in the US and San Antonio in Mexico."
Source: High Desert Gold Corporation