August 23, 1999 VALERIE ANNOUNCES JOINT VENTURE WITH TVX
ON SANTA BARBARA GOLD-COPPER PROJECT, ECUADOR
Valerie Gold Resources Ltd. ("Valerie") is pleased to announce the signing
of an agreement to participate in a 50:50 joint venture on TVX-Normandy
Americas' ("TVX") Santa Barbara gold-copper property in Ecuador. The 10,000
hectare Santa Barbara concession is comprised of four exploration licenses
and a 2,400 hectare mining license located approximately 425 kilometres
south of Quito, the capital city of Ecuador, and 80 kilometres east of the
city of Loja.
Under the terms of the option agreement Valerie can earn a 50% interest in
the Santa Barbara property by making an initial cash payment of US$100,000
and completing US$4,000,000 in property expenditures over three years as
follows: $500,000 within 9 months of Regulatory Approval,
$1,500,000 prior to the 2nd anniversary of Regulatory Approval, and
$2,000,000 prior to the 3rd anniversary of Regulatory Approval.
As part of the transaction, TVX will be granted warrants to purchase up to
3,000,000 shares of Valerie Gold Resources Ltd. exerciseable as follows:
750,000 shares at C$2.00 within 12 months of signing
1,000,000 shares at C$3.50 within 24 months of signing
1,250,000 shares at C$5.00 within 36 months of signing
The warrants will only be exerciseable while the agreement with TVX remains
in effect. All shares acquired by TVX on exercising the warrants will be
subject to a voting trust by which the voting rights attached to the shares
may be voted by the Board of Directors of Valerie in their discretion for
as long as TVX owns the securities up to a period of 3 years from the
exercise date. Upon, but not before, the second anniversary date of this
agreement TVX will have the option of selling its shares acquired by
exercising the warrants. In the event of a successful take-over bid for
Valerie, either friendly or hostile, the non-expired and un-exercised
warrants held by TVX will be exercisable at their respective exercise
price, and the trust encumbering the warrants and the shares issued as a
result of the exercise of the warrants will be immediately released.
In accordance with the terms of the agreement, Valerie must complete a
minimum US$500,000 work program on the property and must commit a minimum
of 60% of the proceeds it receives from the warrants towards work on the
Santa Barbara property. If after the 50:50 joint venture is formed one
party elects not to participate, its interest will be diluted
incrementally, and below 20% will convert to a 20% carried interest until
completion of a bankable feasibility study, or until aggregate exploration
costs exceed US$20,000,000.
Through work conducted to date, TVX has outlined three principal mineral
targets within the concession. These targets are referred to as the Santa
Barbara copper-gold showing, the El Hito porphyry copper showing and the
Napintza gold target.
The Santa Barbara showing is regarded as the most advanced of the three
targets. Soil sampling has identified an anomalous gold-copper area
measuring 1,200 by 1,500 metres. The core of the anomaly, as defined by the
300 ppb gold and 500 ppm copper contour covers an area of approximately 950
metres by 350 metres. A 650 metre long bulldozer trench cut 2 to 4 metres
deep across the center of the anomaly averaged 0.85 g/t gold and 0.25%
copper over its entire length. This included a 30 metre section grading
1.20 g/t gold. Due to the intense surface leaching it is expected that
grades will improve with depth.
The El Hito porphyry copper target is located 3.0 kilometres east of Santa
Barbara. In this area geochemical sampling has defined a copper soil
anomaly that measures 500 metres by 2,000 metres and remains open to the
north and south. The core of the anomaly, as defined by the 500-ppm
contour, measures approximately 750 metres by 300 metres. Hand trenching
over the anomaly has returned assays up to 0.92% copper from the heavily
leached surface rocks.
The Napintza target is located 5.0 kilometres south of Santa Barbara.
Minimal work has been conducted over this area, however, highly anomalous
gold values (many in excess of 1,000 ppb) and anomalous zinc values in both
stream sediment and reconnaissance soil samples have defined a target area
of approximately 1.5 square kilometres in size.
Access to the property is by gravel road ending just west of the Santa
Barbara showing. Infrastructure within the region is good including
electrical power and water.
TVX-Normandy Americas is presently constructing a gravel drill-road across
the Santa Barbara zone and an induced polarization survey is underway in
order to further define drill targets. Upon regulatory approval of this
agreement, Valerie will become operator of the project and will retain the
services of the TVX-Normandy Americas contractual staff presently working
onsite.
Drilling is expected to commence on the Santa Barbara zone shortly after
regulatory approval. High-grade gold-copper mineralization within a
chalcocite-rich supergene blanket, and porphyry related gold and
chalcopyrite bearing stockwork and replacement bodies have been identified
as the principal targets.
Valerie Gold Resources Ltd. has the financial capability to undertake a
project of this scope with approximately $12 million in cash and
investments. The Company has 12,108,107 shares outstanding.
The agreement is subject to acceptance for filing by the Vancouver Stock
Exchange and due diligence by Valerie Gold Resources Ltd.Frank A. Lang, P.Eng.
President For further information please contact
Investor Relations of the Lang Mining Group
Tel: (604) 687-4622 * Fax: (604) 687-4212
Toll Free: 1-888-267-1400
E-mail: mailto:Investor@langmining.com |
