Desert Gold Amends Terms For Sale Of Its Interest In Goldbanks Project

8/24/2012 5:33 PM ET

Desert Gold Ventures Inc. (DAU.V: Quote) announced that the asset purchase agreement it entered into with Winnemucca Gold Corp. on July 10, 2012 to sell the Company's 50% participating interest in the Goldbanks mineral exploration project located in Pershing County, Nevada, USA has been amended.

The Purchase Agreement now provides for a total purchase price to Desert Gold of $3.50 million.

The company said that $3 million of the purchase price will be in cash, of which $500,000 will be payable on closing, $1 million payable six months after closing and $1.50 million payable 12 months after closing. $500,000 of the purchase price will be satisfied by Winnemucca issuing to Desert Gold common shares of Winnemucca, 12 months after closing, at Winnemucca's most recent equity financing price, or if listed on a stock exchange, at the 20-day volume weighted average market price.

In the event that Winnemucca purchases any or all of Kinross Goldbanks Mining Company's, the other 50% owner of the Goldbanks Project, 50% participating interest in the Goldbanks Project within 60 days of closing, Winnemucca shall pay to Desert Gold an additional $500,000 in cash. If any of the post-closing payments are not made, all legal and beneficial title to the Goldbanks Project will revert to Desert Gold.

Desert Gold said it has provided notice of the amended terms to Kinross. Kinross will have a pre-emptive right to purchase Desert Gold's interest on the same terms, such right being exercisable until September 24, 2012 . If Kinross does exercise its pre-emptive right, the Purchase Agreement will be terminated and Desert Gold will pay Winnemucca a break fee of 8% of the aggregate value of the consideration agreed to be received by Desert Gold for its interest in the Goldbanks Project.

Closing is scheduled for the earlier of (i) September 26, 2012 or (ii) within 5 days of Kinross waiving its pre-emptive right.