ValGold Resources Ltd. (TSX VENTURE: VAL)(FRANKFURT: VR2)
("ValGold") is pleased to announce that it has negotiated an
agreement to acquire a 75% interest in a private Ukrainian company,
Klinservis - Center Ltd., which is to hold a 25 year mining licence
over the past producing Muzhievo gold-silver mine and the
surrounding mineral fields of the Beregovo Mining District in
western Ukraine ("the MBK Project"). Under the terms of the
agreement, the Beregovo mining district will be covered within one
mining licence that measures approximately 75 square kilometres.
The mining licence will include the primary properties such as the
Muzhievo mine, and the Beregovo and Kvasovo projects. The licence
will have a 25-year term. The MBK Project acquisition is subject to
regulatory approval and settlement of a final Joint Venture
agreement.
ValGold has agreed to purchase the 75% interest in the private
company established for this transaction by issuing 3.5 million
common shares of ValGold and for cash of US$10.0 million dollars.
Upon ValGold's satisfactory completion of Due Diligence and the
Legal Confirmation of the mineral title, ValGold will pay to the
Selling Group a total 3.5 million common shares in two payments
where:
-- 1.5 million shares are to be issued subject to regulatory approval of
the transaction, and;
-- 2.0 million shares are to be issued 12 months following the date of
issue of the first share payment.
ValGold will make cash payments totalling US$10.0 million in
three instalments as follows:
-- The first instalment will be US$2.5 million to be paid with the first
share payment;
-- The second instalment will be US$2.5 million to be paid with the second
share payment, and;
-- The final cash instalment of US$5.0 million will be paid on or before
the date 12 months following the second instalment.
Stephen Wilkinson, President and CEO of ValGold, commented, "We
have been monitoring gold and silver opportunities in the
Carpathian region for some time and are pleased to have now
negotiated an agreement with our Ukrainian partners. The
consolidation of the regional exploration properties into the MBK
project and the granting of a 25 year mining licence will enable
ValGold to provide the experienced management, mining and financial
expertise needed to develop a significant gold/silver project for
the mutual benefit of both the people of Ukraine and ValGold
shareholders."
BACKGROUND
Mining in the Muzhievo region is reported to date back to the
12th century and to the Holy Roman Empire when extraction focused
on the silver in lead and zinc occurrences. Modern exploration
commenced during the 1960's and resulted in the discovery of lead
(Pb), zinc (Zn) and gold (Au) mineralization at Muzhievo. By 1972
gold-bearing quartz veins and stockworks associated with the
Muzhievo mineralized zones were discovered, which led to more
extensive exploration. It is reported that some 2,000 drill holes
were subsequently completed and approximately 30km of underground
workings on six levels were developed, which included a decline,
two adits and a 130m vertical shaft. In 1990, Soviet geologists of
the USSR State Reserve Commission (GKZ) published a historical C1 +
C2 mineable reserve for the Muzhievo mineralization of 14,709,300
tonnes ("t") of 1.88 g/t Au; 38.35 g/t Ag; 2.07% Pb and 4.76% Zn.
These historical resource estimates do not comply with the current
Canadian Institute of Mining, Metallurgy and Petroleum Resources
(CIM) Definition Standards on Mineral Resources and Mineral
Reserves as required by National Instrument 43-101 (NI 43-101)
Standards of Disclosure for Mineral Projects. The Company is not
treating the historical estimate as current mineral resources and
cautions that such estimates should not be relied upon.
To view accompanying map, visit the following link:
http://media3.marketwire.com/docs/ValGoldmap.pdf
THE MUZHIEVO MINE AND THE BEREGOVO REGION
The Muzhievo mine is located 2km east of the city of Beregovo in
the western Ukraine Oblast (Province) of Zakarpatska. The mine
property is centred on coordinates 48 degrees 11' 6" North, 22
degrees 40' 49" East on the western flank of the Carpathian
Mountains, within a region of central Europe noted for epithermal
gold, silver and base metal resources.
Mining was undertaken at Muzhievo during the period of 1999 to
2005 by Zakarpatpolymetally, a subsidiary of Ukrpolymetally, a
state-owned mining company. Approximately 700kg of gold was
recovered solely by gravity extraction from approximately 350,000t
mined.
Located respectively west and east of the Muzhievo site are the
Beregovo and Kvasovo gold and silver occurrences. During the 1970's
and 1980's the USSR Ministry of Geology explored both areas and
completed approximately 63 diamond drill holes on the Beregovo
property and 2 drill holes on the Kvasovo property. A P1+P2 Russian
resource was then calculated to a depth of 400m for the Beregovo
property of 10,261,687t with an average grade of 5.21 g/t Au
contained within five mineralized zones. These historical resource
estimates do not comply with current NI 43-101 standards but do
indicate the potential size of the mineralized zones of the
Beregovo property and justify follow up exploration. These
historical resource estimates do not comply with the current
Canadian Institute of Mining, Metallurgy and Petroleum Resources
(CIM) Definition Standards on Mineral Resources and Mineral
Reserves as required by National Instrument 43-101 (NI 43-101)
Standards of Disclosure for Mineral Projects. The Company is not
treating the historical estimate as current mineral resources and
cautions that such estimates should not be relied upon.
THE GEOLOGY
The Beregovo Mining District occurs within the Carpathian
Neogene volcanic belt in which there are three recognized stages:
the earliest stage is represented by predominantly rhyolitic
volcanism; the middle stage is more andesitic to basaltic rocks
with the latest events being much younger basaltic and andesitic
flows. The gold and base metal mineralization appears related to
the early stage volcanism, particularly associated with faults and
fractures formed during the subsidence of a series of caldera.
Mineralization at the Muzhievo mine and on the Beregovo permits
consists of high sulphidation epithermal deposits that occur mainly
as east-west veins that measure up to 8.4m in thickness within the
mine workings. Historical drill intersections have returned up to
32.60m averaging 3.60 g/t gold, 31.60 g/t silver, 3.89% lead and
5.68% zinc. The veins are composed mainly of quartz with barite and
carbonate minerals. Sulphide minerals are common in the quartz
veins and include sphalerite (zinc sulphide), galena (lead
sulphide) and iron sulphide minerals such as pyrrhotite, pyrite and
marcasite. Chalcopyrite is also a common ore mineral. Gold occurs
as very minute disseminations and silver is present in silver
sulphosalts with galena.
Dr. Derek McBride, P.Eng, is the Qualified Person ("QP") for the
Company, who has reviewed the accuracy of the technical portion of
the news release.
NOTE ON HISTORICAL RESOURCES
It is important to note that all of the historical and technical
data presented predates National Instrument 43-101, is only
presented as historical information and should not be relied upon.
A compliant NI 43-101 report has been initiated for ValGold by an
independent QP. ValGold intends to have the report include details
of an exploration and development work program that should address
the process by which it can prepare compliant resource estimates
for the mining project.
These historical resource estimates do not comply with the
current Canadian Institute of Mining, Metallurgy and Petroleum
Resources (CIM) Definition Standards on Mineral Resources and
Mineral Reserves as required by National Instrument 43-101 ("NI
43-101") Standards of Disclosure for Mineral Projects. A QP has not
done sufficient work to upgrade or classify these historical
resource estimates as current NI-43-101 compliant mineral
resources. The Company is not treating the historical estimate as
current mineral resources and cautions that such estimates should
not be relied upon. Given the quality of the historic work
completed on the mine, ValGold believes that the historic C1 + C2
reserves and the P1 + P2 resources estimate may be relevant as an
indicator of the resource potential.
For the purpose of reporting historical data in this
announcement, the Soviet era resource estimates are not considered
compliant with NI 43-101 standards. According to the Soviet
guidelines for Resource Classification, C1 and C2 reserve estimates
are made within the guidelines set forth by the USSR State
Committee on Reserves. The C1 reserves and resources are reportedly
estimated from data derived by drilling, surface and underground
sampling. In addition, C1 resources may be applied to make a
pre-feasibility study and to define the nature of the resource for
future planning. Soviet feasibility studies conformed to industry
standards, including mineralogical, mining and metallurgical
evaluations in addition to the resource estimate. Pending data
verification, the C1 resource category may be the equivalent of NI
43-101 compliant "indicated" resource estimate. Any C2 resources
are delineated by drilling and in some cases; they may be supported
by underground sampling. Drill spacing and if available,
underground sampling is wider and less detailed than is required to
support a C1 estimate. Pending data verification, the C2 resources
may support a compliant "inferred" resource estimate. The P
resources are estimates of the "potential" resource of a prospect
and are commonly based on limited and less detailed sampling and
drilling. ValGold's management has interpreted any P resource to be
what the Soviet era geologists may have considered as the potential
for this particular prospect.
ABOUT VALGOLD
Incorporated in 1987, ValGold is listed on Tier 1 of the TSX
Venture Exchange under the symbol VAL. ValGold is an international
mineral development company based in Vancouver, Canada. The
Company's objective is to generate wealth for its stakeholders by
seeking out, acquiring and advancing properties with recognizable
but under-explored mineral resources.
ValGold's commitment is to realize value from significant
mineral deposits which satisfy key criteria:
-- Mineral rights to extensive areas in prospective but non-traditional and
under-explored regions.
-- Mineral exploration projects with potential for substantial development.
-- Projects that require experienced management with exploration, mining
and financial expertise.
In addition, the Company has recently sold its ownership of the
Garrison gold project for a total consideration of approximately $9
million plus a 2% Net Smelter Royalty. The cash and marketable
securities received for that transaction have greatly enhanced its
working capital and investments to facilitate the Muzhievo
acquisition.
In its news release dated August 16, 2011, ValGold reported that
it was in an advanced stage of negotiation to acquire one or more
mineral properties located in Central Europe. ValGold also reported
that it had expended approximately $1.0 million to investigate a
number of potential acquisition targets including previously
operating mines. These funds had been expended to acquire and
evaluate historic exploration and operational data and as an
initial consideration on properties under negotiation.
For more information on ValGold's Canadian and international
gold projects, please visit our website at www.valgold.com.
This news release includes "forward-looking information". All
statements in this release, other than statements of historical
facts, that address the private placement or mineral exploration
programs contain forward-looking information and are based on a
number of assumptions, including, but not limited to, that there
will not be substantial changes to market conditions, regulatory
requirements or costs associated with mineral exploration. Although
the Company believes the expectations expressed in such
forward-looking information are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or developments may differ materially from those in the
forward-looking information. Factors that could cause actual
results to differ materially from those in forward-looking
information include changes the price of the company's shares, the
costs of labor, equipment and other costs associated with
exploration, exploration successes, continued availability of
capital and financing, and general economic, market or business
conditions. Investors are cautioned that any such statements are
not guarantees of future performance and actual results or
developments may differ materially from those projected in the
forward-looking statements.
SEC 12g3-2(b): 82-3339
Neither TSX Venture Exchange nor its Regulation Services
Provider (as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Contacts: ValGold Resources Ltd. Stephen J. Wilkinson President
& Chief Executive Officer (604) 687-4622 ValGold Resources Ltd.
Cindy Chu Investor Relations (604) 687-4622 (604) 687-4212 (FAX)
info@valgold.com www.valgold.com
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