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 km˛ 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 65,872 hectares (162,768 acres) or 659 km˛. The largest group is located 40 kms northwest of the Kilometre 88 area and comprises 16 licenses totalling approximately 659 km˛. 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 Los Patos gold occurrence is located within the La Increible 3 concession approximately 20 kms northeast of the town of El Callao and 4.5 kms northeast of the 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 La Increible 3 concession.
Los Patos was 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 warranted in this direction.
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)|
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 East Shear Zone is up to five kilometers wide and is host to several gold occurrences the most prominent being the Carolina, Serrucha and Panamá.
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 El Dorado 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 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.
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.