Venezuela Properties

1. Los Patos Gold Occurrence
2. Mochila Gold Occurrence

In January 2006, ValGold Resources Ltd. entered into a Memorandum of Understanding with a group of three private companies under which Valgold can acquire all of the shares of Honnold Corp., a British Virgin Island company that indirectly owns 21 exploration licenses covering approximately 1,040 km² in Bolivar State, Venezuela. The acquisition will be accomplished in two phases for a total price of US$2,000,000 in cash and the equivalent of US$6,000,000 in ValGold common shares. Previous exploration expenditures on the properties are estimated to be approximately US$38.0 million. Details of the acquisition are outlined in a news release dated January 9, 2006.

The exploration licenses are grouped in three separate areas and cover a total area of approximately 89,209 hectares (220,432 acres) or 892 km². The largest group is located 40 kms northwest of the Kilometre 88 area and comprises 16 licenses totaling approximately 875 km². This group is further broken down into two contiguous blocks of licenses that are referred to as the Chicanan East and West properties. The remaining 5 licenses are located at El Callao and 60 kms to the southeast. They are referred to as the La Increible and Vetas Vuelvan Caras properties, respectively.

The properties lie within the Guiana Shield (the "Shield") which forms the northern part of the Amazon Craton. In Venezuela, the Shield can be divided into five litho-tectonic units referred to as the Imataca, Pastora-Botanamo, Cuchivero, Amazonas and Roraima. All five units are present in Bolivar State but the most extensively explored has been the Paleoproterozoic Pastora-Botanamo which hosts most of the gold deposits. The Pastora-Botanamo Province consists of a greenstone belt assemblage of mafic to felsic metavolcanic, metasedimentary and igneous intrusive rocks intruded by granitic rocks of the Supamo Complex.

On a local scale the Chicanan East and West concessions are underlain by felsic to mafic volcanics and minor associated tuffaceous sediments intruded by a large ultramafic to mafic layered intrusive complex referred to as the Mochila Layered Complex. This layered complex is estimated to be up to 2.5 kms thick and covers several tens of square kilometers. Also intruding the volcanic rocks are dykes, sills and small intrusions of dacite porphyry, and quartz and/or feldspar porphyry. Although many large faults and shear zones cut the property the most notable is the Chicanan Shear Zone. This shear zone follows the Chicanan River and essentially separates the Chicanan East and West properties. The Chicanan Shear Zone is up to five kilometers wide and is host to several gold occurrences the most prominent being the Carolina.

Several gold occurrences have been discovered on the property to date which can broadly be grouped into two styles of mineralization. The first style of gold mineralization is hosted by the Mochila Layered Complex and is commonly found either along axial plane faults or limbs of the folds following specific lithological contacts. At the Mochila Lineament occurrence gold mineralization is found along a regional scale fault coincident with the axial plane of the folded Complex. Gold mineralization is also found along the limbs of the fold following the upper contact of the middle gabbro unit which separates two ultramafic units. The Mochila Lineament gold occurrence covers an area of approximately 10 square kms and has been tested by only two short drill holes. Most of the other major gold occurrences discovered to date on the property are found within the Chicanan Shear Zone and are commonly hosted by quartz-sericite + chlorite schist with variable amounts of pyrite. The Carolina occurrence is the largest and has been mined to several metres depth by garimpeiros using a number of shallow open pits. Both styles of gold mineralization are intimately associated with dacite and/or quartz-feldspar porphyry both of which can be mineralized.

Fieldwork in 2007 focused on defining and drilling as many gold targets as possible hosted by the Mochila Layered Complex.

I. Los Patos Gold Occurence

The Los Patos gold occurrence is located within the Lo Increible 3 concession approximately 20 kms northeast of the town of El Callao and 4.5 kms northeast of Crystallex's La Tomi gold mine. It is one of several gold occurrences found along the east-west striking, 6.8 km long, Los Chivos Shear Zone which cuts through the central portion of the Lo Increible 3 concession.

Los Patos is the first gold occurrence in Venezuela to be drilled by ValGold. During the spring and early summer of 2007 the Company tested the occurrence with 28 diamond drill holes for an accumulated length of 7,971 metres. These holes outlined up to five parallel zones of mineralization which when averaged with the intervening lower grade material gave zones up to 58.0 metres wide assaying 1.27 g/t gold (true width 95%). Other notable intersections include 4.75 g/t gold over 17.0 metres in hole LI307-07 and 3.98 g/t gold over 36.0 metres in hole LI307-11 (see table below). With depth the mineralization appears to coalesce into one or two zones but sometimes with very high grades such as those found in hole LI307-22 which averaged 14.66 g/t over 4.0 metres.

Drilling has tested the Los Patos deposit down to a vertical depth of approximately 220 metres below surface and along strike for a maximum distance of 240 metres. To the east the mineralization has narrowed and weakened but further drilling is required in this direction. As of the beginning of August assays are still pending for holes LI307-29 and above but indications are that the mineralization is open at least to the west and to depth.

Back to Top

MAIN LOS PATOS 2007 DRILL INTERSECTIONS (avg. > 1 g/t Au)

Drill Hole	Gold Zone	From(m)	To (m)	Meters	Feet	Gold g/t	Gold oz/st(1)
LI307-01	Los Patos	87.00	113.00	26.00	85.30	1.14	0.03
	including	89.00	90.00	1.00	3.28	12.83	0.37
LI307-02	Los Patos	109.00	146.00	37.00	121.39	0.83	0.02
	including	109.00	127.00	18.00	59.06	1.15	0.03
	and	123.00	124.00	1.00	3.28	11.32	0.33
	and	137.00	146.00	9.00	29.53	1.10	0.03
LI307-03	Los Patos	133.00	190.00	57.00	187.01	1.34	0.04
	including	133.00	151.00	18.00	59.06	2.18	0.06
	and	138.00	139.00	1.00	3.28	13.31	0.39
	and	141.00	142.00	1.00	3.28	6.90	0.20
	and	165.00	166.00	1.00	3.28	20.28	0.59
LI307-04	Los Patos	57.00	115.00	58.00	190.29	1.27	0.04
	including	57.00	69.00	12.00	39.37	3.13	0.09
	and	103.00	107.00	4.00	13.12	3.09	0.09
LI307-05	Los Patos	94.00	138.00	44.00	144.36	1.02	0.03
	including	122.00	123.00	1.00	3.28	10.63	0.31
	and	128.00	131.00	3.00	9.84	3.33	0.10
LI307-06	Los Patos	137.50	189.00	51.50	168.96	1.91	0.06
	including	139.50	143.00	3.50	11.48	5.30	0.15
	and	164.00	168.00	4.00	13.12	5.68	0.17
	and	165.00	166.00	1.00	3.28	17.55	0.51
	and	169.00	171.00	2.00	6.56	16.44	0.48
	and	188.00	189.00	1.00	3.28	6.35	0.19
LI307-07	Los Patos	76.00	93.00	17.00	55.77	4.75	0.14
	including	76.00	77.00	1.00	3.28	6.86	0.20
	and	84.00	86.00	2.00	6.56	23.61	0.69
	and	90.00	93.00	3.00	9.84	8.30	0.24
LI307-08	Los Patos	119.00	120.00	1.00	3.28	2.99	0.09
LI307-09	Los Patos	199.00	219.00	20.00	65.62	7.25	0.21
	including	212.00	215.00	3.00	9.84	17.59	0.51
LI307-10	Los Patos	172.00	222.00	50.00	164.04	1.95	0.06
	including	173.00	176.00	3.00	9.84	7.73	0.23
	and	196.00	202.00	6.00	19.68	3.31	0.10
	and	219.00	220.00	1.00	3.28	15.90	0.46
LI307-11	Los Patos	211.00	247.00	36.00	118.11	3.98	0.12
	including	218.00	224.00	6.00	19.69	18.42	0.53
	and	242.00	243.00	1.00	3.28	10.63	0.31
LI307-12	Los Patos	232.00	272.00	40.00	131.23	1.48	0.04
	including	232.00	233.00	1.00	3.28	33.57	0.98
LI307-20	Los Patos	111.00	145.00	34.00	111.15	2.75	0.08
	including	111.00	119.00	8.00	26.25	9.39	0.27
	and	111.00	112.00	1.00	3.28	53.97	1.57
LI307-21	Los Patos	152.00	162.00	10.00	32.81	3.00	0.09
LI307-22	Los Patos	234.00	238.00	4.00	13.12	14.66	0.43
LI307-23	Los Patos	240.00	256.00	16.00	52.49	2.30	0.07
	including	240.00	242.00	2.00	6.56	7.90	0.23
	and	255.00	256.00	1.00	3.28	12.03	0.35
LI307-24	Los Patos	193.00	196.00	3.00	9.84	29.65	0.87
	including	193.00	194.00	1.00	3.28	80.97	2.36
LI307-25	Los Patos	230.00	237.00	7.00	22.97	2.25	0.07
LI307-26	Los Patos	180.00	181.00	1.00	3.28	10.41	0.30
LI307-27	Los Patos	237.00	240.00	3.00	9.84	5.51	0.16
LI307-28	Los Patos	244.00	245.00	1.00	3.28	7.70	0.22
LI307-29	Los Patos	305.00	313.00	8.00	26.25	3.36	0.10
LI307-30	Los Patos	285.00	298.00	13.00	42.66	3.22	0.09
	including	290.00	293.00	3.00	9.84	9.64	0.28
LI307-31	Los Patos	266.00	293.00	17.00	55.78	1.01	0.03
LI307-32	Los Patos	269.00	281.00	12.00	39.37	1.10	0.03
LI307-33	Los Patos	308.00	311.00	3.00	9.84	1.89	0.06
LI307-34	Los Patos	313.00	316.00	3.00	9.84	5.50	0.16
LI307-35	Los Patos	340.00	343.00	3.00	9.84	13.67	0.40

(1) 1.0 o.p.t. = 34.286 g/t Au

Back to Top

II. Mochila Gold Occurrence

The Mochila gold occurrences cover several square kilometres and are located in the Chicanan West concessions approximately 60 kilometres northwest of the Kilometre 88 area. Access to the area is either via the Chicanan River from Eldorado or helicopter from Tumeremo.

Gold mineralization in the Mochila area is hosted by mafic to ultramfic rocks of the Mochila Layered Intrusion. This large layered intrusion is estimated to be up to 2,500 metres thick and is comprised of a lower and upper ultramafic sequence separated by a middle gabbro unit. The intrusion has also undergone at least one phase of folding and is faulted along its axial plane by a regional structure known as the Mochila Lineament.

In mid September a diamond drill was mobilized to the area to start a minimum 5,000 metre drill program consisting of approximately 15 to 20 holes. Drilling will focus along the upper contact of the middle gabbro unit and along the Mochila Lineament particularly where there are gold soil anomalies and/or artisinal workings. The total length of these two linear features is in excess of 7,000 metres. It is expected that this first phase of drilling will take about two months to complete and all assays should be in hand by the end of the year.

The Mochila gold occurrence area is considered as having excellent potential for the discovery of low-sulphide gold-quartz veins. An example of this style of mineralization is found near El Callao at Gold Field's Choco 10 mine where gold mineralization is found along and in proximity to a gabbro contact. Reserves at this deposit are estimated to be in the order of 6 million ounces with the potential to increase with exploration and mine development.

Back to Top