VANCOUVER, May 9 /CNW/ - Evolving Gold Corp. (TSX: EVG) (FSE: EV7) (the "Company") is pleased to announce that it has signed a Letter Agreement with a subsidiary of Agnico-Eagle Mines Ltd. to form a joint venture on its Rattlesnake Hills project in Wyoming.
Under the terms of the Letter Agreement, Agnico-Eagle (USA) Ltd. (Agnico-Eagle) has the option to earn up to a 70% interest in the Rattlesnake Hills project by carrying Evolving Gold through completion of a feasibility study. In order to earn a 70% interest over a seven-year period Agnico-Eagle is required to make payments to EVG totaling $12 million, to purchase $23 million in the common shares of EVG, and to expend a minimum of $41 million on exploration/development work on the project.
"The partnership with Agnico-Eagle will provide the Rattlesnake Hills project with the financial strength required for sustained exploration and development programs," comments Bill Gee, CEO of Evolving Gold. "Agnico-Eagle also brings experience and expertise for successful mine development. This agreement provides $76 million in benefits to the Company and to the project, while Evolving Gold retains fully-funded exposure to the project's exploration potential and development success, all with minimal shareholder dilution."
"A joint venture at Rattlesnake is a significant and positive step in the Company's strategy for providing shareholder returns", continues Mr. Gee. "This agreement allows the Company to focus on its core strength, the discovery of major new gold deposits. With this agreement now in place, Evolving Gold plans to focus its assets and expertise on the exceptional opportunity for a major gold discovery on the prolific Carlin Trend and on our other properties in Nevada."
Under the terms of the Letter Agreement, a binding joint venture agreement is to be completed by June 1st, 2011, with a drill program ensuing shortly after. Agnico-Eagle's minimum work expenditure for the first year is $3 million. The 2011 exploration program will include drilling extensions of the two main gold zones, drilling targets between these two zones, testing previously identified targets in the core area, and a regional program to define additional drill targets on the large Rattlesnake Hills property.
"We are pleased with Agnico-Eagle's enthusiasm for the Rattlesnake Hills project, and our exploration team looks forward to supporting its efforts and providing continuity during the transition to a joint venture program," remarks Quinton Hennigh, President and Chief Geologist of Evolving Gold.
On the Company's website an updated corporate presentation is available containing additional discussion on the Rattlesnake agreement and its impact on our exploration strategy going forward. Please click here to view it: http://www.evolvinggold.com/assets/files/pdf/evgpresentation9may2011.pdf.
About Evolving Gold Corp.
Evolving Gold is focused on exploring its four gold properties in and adjacent to the productive Carlin district of northern Nevada, and on its gold discovery at Rattlesnake Hills, Wyoming. In compliance with National Instrument 43-101, Quinton Hennigh, Ph.D., P.Geo., is the Qualified Person responsible for the accuracy of this news release.
For more information about Evolving Gold please visit: www.evolvinggold.com. To receive regular updates or to receive a follow-up call from Investor Relations please sign up at: http://evolvinggold.com/sign-up.php.
On Behalf of the Board of Directors
EVOLVING GOLD CORP.
"William Gee"
