Advanced Gold Exploration in Eastern Europe
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Velocity Minerals Ltd. (TSXV:VLC) is a Vancouver-based resource exploration company focused on acquiring, exploring and developing properties in Eastern Europe. The company’s current portfolio consists of two advanced-stage gold projects, Rozino and Ekuzya, in southeastern Bulgaria.
Eastern Europe presents significant opportunities for junior mining companies and within this region Bulgaria stands out for its mining friendly incentives. The EU country features low corporate taxes of 10 percent and low royalty rates averaging 1 to 2.5 percent—comparing favorably with better known jurisdictions such as Canada or Chile.
Velocity Minerals primary advantage in this emerging mining district is its strategic partnership with Bulgarian miner Gorubso-Kardzhali A.D. which operates the Chala Gold Mine and the Kardzhali CIL processing plant. Kardzhali is the country’s only permitted cyanide processing plant — a critical advantage, according to Velocity President and CEO Keith Henderson, because “these types of gold projects need cyanide in order to work well and maximize recovery.”
The Rozino Project hosts a low sulphidation epithermal gold deposit within 20 kilometers of the Dundee Metals’ Ada Tepe gold mine development project. Past exploration at Rozina included 142 historical drill holes with mineralization remaining open for expansion. Through an agreement with Gorubso, Velocity Minerals has the option to earn a 70 percent interest in the property with the completion of a NI 43-101 Preliminary Economic Assessment.
With this goal in mind, the company has planned an ongoing 12,000-meter drill campaign of which 7,000 meters will be completed before Christmas. Velocity commenced drilling in August 2017. Early results reported August 21 include an intersect of 74 meters at 2.35 g/t gold including 39 meters at 4.11 g/t gold. Further results are expected to generate steady news flow into 2018.
Velocity Minerals’ second project, Ekuzya, is home to multiple precious metals targets and contiguous with Gorubso’s operating Chala Mine. Velocity has the option to earn a 50 percent interest in the property through $1 million in exploration spending over two years with the further option to convert to a 5 percent gross royalty. The option agreement also includes a 12-month exclusivity period for Velocity to negotiate an interest in the Chala Gold Mine following due diligence. Velocity is in the process of complete geological surveys at Ekuyza with a planned drill program to follow in 2018.
Velocity’s management and board have a combined 100 years’ experience across exploration, resource definition, feasibility, finance, mine construction and operation. Members of the team have worked in senior positions for major companies, including Anglo American and Lundin, and have successful track records in managing publicly listed companies and bringing value to shareholders. Henderson, a former senior manager at Anglo American, played a vital role in the sale of an iron deposit in Peru for $100 million cash while VP of Exploration at Cardero Resource Corp.
- Two quality advanced-stage gold projects with excellent blue sky potential in Eastern Europe.
- Clean gold metallurgy at Rozino with good historical recovery (97%+).
- 12,000-meter drill campaign underway for 2017-2018 at Rozino.
- Drill program planned for 2018 at Ekuzya.
- Exclusivity period to conduct due diligence on the Chala Gold Mine.
- Tight share structure with 59 percent of stocks subject to a TSX-V lock-up provision as of August 2017.
- Strategic advantage through partnership with Bulgarian mining company Gorubso-Kardzhali A.D.—first and only cyanide permit in Bulgaria.
- Highly talented team of mining industry professionals; Anglo American, Lundin alumni; Trevali President and CEO Mark Cruise on Board.
Key Asset: Rozino Project
The Rozino Project is located within the Tintyava prospecting and exploration license, just 20 kilometers east of the Ada Tepe gold mine development in southeast Bulgaria. Rozino is also 50 kilometers southeast of the city of Kardzhali, site of Gorubso’s permitted cyanide processing and tailings facilities. The Tintyava license area encompasses 163 square kilometers and contains several other gold exploration targets.
Rozino features a low impurity epithermal gold deposit with high recovery rates if cyanide processing is used. Historical metallurgical tests of three samples returned average recoveries of 97.7 percent with cyanide in leach extraction.
Although 142 holes were drilled during previous exploration on the property, the Rozino deposit is not yet well defined. Velocity’s exploration work at Rozino will center on delineating a NI 43-101 resource for the project to be included in an upcoming PEA.
Historical soil geochemistry identified several untested anomalies.
Historical trench sampling around the existing deposit also returned encouraging results.
Velocity’s immediate plans for the property include drilling of the above untested soil and trench anomalies, a proof of concept in the core of the Rozino deposit area, and resource definition drilling.
Key Asset: Ekuzya Project
The Ekuzya Project hosts an intermediate sulphidation epithermal type gold-base metal vein deposit and is situated inside Gorubso’s Chala Mining Concession (valid until 2031), contiguous with the Chala Gold Mine.
Originally a base metal play, past exploration at Ekuzya included 122 historical drill holes, of which only 3 percent were assayed for gold; however, those holes that were assayed for gold returned values confirming the interpretation of a gold and base metal system on the property.
After digitizing and compiling all of the historical data, Velocity created a geological model for Ekuyza which identified three target areas on the property where previous operators reported significant gold results: Zone 5, Zone 5a and Ekuzyata.
Of these targets, Ekuzyata is rated the highest priority with historical trenching results including 5.7 meters at 4.9 g/t gold, 7.9 meters at 2.2 g/t gold, and 2.3 meters at 3.0 g/t gold.
Soil and trench sampling on the property by Velocity is nearly complete. The company is slated to begin drilling at Ekuzya in the early months of 2018.
Keith Henderson, M.Sc.—President, CEO and Director
Keith Henderson has 25 years’ global experience in the mineral exploration industry throughout Africa, Europe, and North and South America. He was educated in Europe, graduating with B.Sc. (Hons) and M.Sc. in geology and has extensive experience in multiple mineral deposit types and commodities. Keith worked with Anglo American Exploration in Europe and North America, leading a number of exploration projects and ultimately, he was appointed project manager for Anglo Coal as the company made its first entry into Canada. In 2007, Keith joined Cardero Resource Corp. as Executive Vice-President, where he played a critical role in advancing the Pampa de Pongo through a positive scoping study and ultimate sale for US$100 million cash. He was formerly President & CEO at Dorato Resources and is currently President & CEO at Centenera Mining focused on project acquisition and exploration in Argentina. Keith serves on the board of several public companies.
Stuart Mills, M.Sc.—Vice President Exploration
Stuart Mills has an M.Sc. in Mineral Exploration & Mining Geology and 30 years’ experience working in minerals exploration and advanced feasibility projects. He is a skilled and enthusiastic explorationist with a number of significant discoveries under his belt, including the Galat Sufar gold deposit in Sudan (maiden resource of 28.8Mt @ 2.2 g/t Au, 0.8 g/t cut-off; approximately 2 million ounces). Stuart’s early career was with Anglo American, working initially as Senior Geologist in Bulgaria, Turkey, Yemen, Iran, and Ireland and he was ultimately appointed Principle Geologist Asia-Pacific, having responsibility for exploration in China, India and Australia. In Australia, Stuart was responsible for Anglo’s Myrtle zinc discovery in the Batten Trough. Later, Stuart worked with Lundin Mining as Regional Exploration Manager Africa-Eurasia where he had exploration responsibility for Lundin’s Ozernoe zinc – lead deposit in Siberia. He was also part of the Lundin M&A team and Lundin’s exploration representative on the Tenke Fungurume ownership team. He was later Exploration Manager with technical responsibilities on all of Red Back Mining’s projects and was part of the M&A team that sold Red Back to Kinross for $7.2 billion. Most recently, he was country manager for Orca Gold in Sudan and managed exploration funded by the $65M RTO of Canaco Resources, discovering Galat Sufar. Stuart has global experience having actively explored and/or reviewed projects throughout most of the world.
Valentin Velikov Buhov, M.Sc.—Exploration Manager
Valentin Velikov graduated with an M.Sc. in Mining and Geology from the University of Mining and Geology “St. Ivan Rilski” in Sofia, Bulgaria. Since then he has accumulated more than 30 years of international exploration and mining experience with companies such as Minorco, Anglo American, Hereward Ventures, Ivanhoe, Dundee Precious Metals, Lundin Mining and Kinross, where he worked for 7 years exploring the Kupol gold mine and defining the Dvoinoe gold mine. His experience spans Yemen, Central Asia, Russia, Serbia and India, as well as his native Bulgaria. He has extensive experience with the Velocity projects and he previously worked on the Rozino gold deposit with both Hereward and Ivanhoe (Asia Gold).
Dr. Mark Cruise—Director
Dr. Mark Cruise’s career in mineral exploration and mine development spans 25 years. He is currently President & CEO at Trevali Mining (TSX: TV) ($1B market capitalization), a zinc-miner with operations in Peru, Canada, Namibia and Burkino Faso. Mark co-founded the company in 2007 and managed development projects in Peru and Canada through discovery, resource definition, mine design, finance, and mine construction. Most recently (2017), Trevali announced definitive agreements with Glencore PLC whereby Trevali would acquire a portfolio of zinc assets in Namibia and Burkino Faso for an aggregate purchase price of approximately US$400-million. During his career, Mark has worked with Anglo American, Pasminco and junior TSX-listed companies. He was formerly part of Anglo’s feasibility team for the Lisheen Zinc-Lead Mine in Ireland before taking up the role of Exploration Manager North America for Anglo American. He was later VP Business Development for Cardero Resource Corp and was co-founder at International Tower Hill Mines which peaked at $800M market capitalization (2010).
Daniel Marinov, M.Sc.—Director
Daniel Marinov has 25 years of international experience in the mining and mineral exploration industry including 5 years in an underground production environment. He holds a Master of Science degree in mineral exploration from the University of Mining and Geology of Sofia, Bulgaria. He has extensive experience in precious, base metal and industrial minerals exploration having worked throughout Eastern Europe, Asia, Australia, as well as Central and South America. Daniel is currently Vice President Exploration at Trevali Mining where is he is focused on rapidly expanding resources at Trevali’s four operations where he has a strong discovery track record. In his career, Daniel has undertaken senior geological and managerial roles with Anglo American and Rio Tinto. Prior to joining Trevali, Daniel was the project exploration manager at Anglo’s Michiquillay porphyry copper-gold-molybdenum deposit in Peru. Daniel will serve as Executive Director in each of three subsidiary corporations in Bulgaria.
Gord Doerksen, B.Sc—Independent Director
Gord Doerksen has more than 25 years of operational and mine engineering in Canada, USA and throughout Africa. He is currently Vice-President Technical Services at JDS Energy and Mining and he is a professional mining engineer. At JDS, Gord has technical oversight on engineering work and 43-101 reports from due diligence to scoping and feasibility. Gord’s engineering experience includes mine planning, project engineering and senior management at mines throughout North America and Africa, working with Konkola Copper Mines (Anglo American), Sandvik, FMC Corporation and Giant Yellowknife Mines. Prior to joining JDS early in 2012, Gord worked at SRK Consulting (Canada) Inc. for six years where he was a Principal and lead project teams.
Joseph Martin—Independent Director
Joseph Martin has more than 30 years experience in business administration & public company management. He has held a management role with New Dawn Group since 1990. He has also completed MBA modules in Accounting & Business Management from Heriot-Watt University, Scotland.
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