Velocity Minerals Ltd. (TSX.V: VLC, OTCQB: VLCJF)
(“
Velocity” or the “
Company”)
announces that it has entered into a binding letter agreement with
Zelenrok EOOD (“
Zelenrok”), a wholly-owned
subsidiary of Raiden Resources Limited (collectively with Zelenrok,
“
Raiden”), whereby Velocity has been granted an
exclusive option to acquire, in two stages, up to a 75% interest
(the “
Option”) in and to the prospecting and
exploration licence covering the 195 km² Zlatusha gold-copper
property (“
Zlatusha” or the
“
Property”), located in Bulgaria. The Option
consists of a first option to acquire up to a 51% interest
(the “
First Option”) and a second option
(the “
Second Option”) to acquire an
additional 24% (aggregate 75%) interest in and to the Property.
Zlatusha Project Highlights
- Large, under-explored property,
located in a highly prospective copper-gold mineral belt
- Potential for epithermal gold,
porphyry copper-gold, and skarn deposits
- A total of seven known mineral
occurrences for initial follow-up exploration
- Historical drilling totals 52 drill
holes (~10,000m) with partial geochemical coverage
- Drilling highlights at Zlatusha
Prospect include 11m grading 3.63 g/t gold (at surface)
“Acquisition of the Zlatusha prospecting license
has been a high priority for Velocity in recent months,” stated
Keith Henderson, Velocity’s CEO. “The combination of existing
mineralized zones located within such a prolific mineral belt, and
the general lack of systematic modern exploration means that we
will be prioritizing work at Zlatusha. We believe that the Property
is highly prospective for additional gold and copper-gold
epithermal, porphyry and skarn mineralization.”
Regional Setting
The Zlatusha prospecting license is located
within a Tier One porphyry copper-gold and epithermal belt, in the
Western Srednogorie segment of the Upper Cretaceous magmatic arc
(Figure 1), which transects Serbia and Bulgaria.
The geological setting of the Western Srednogorie segment is very
similar to the Timok Magmatic complex (located 95 km to the
northwest in Serbia) that hosts the Bor, Majdanpek and Cukaru Peki
copper-gold deposits, as well as the Panagyurishte ore field
(located 65 km to the east in Bulgaria), which host operating
mines like Chelopech, Elatsite and Asarel copper-gold deposits. The
Property is underlain by Upper Cretaceous andesite volcanic rocks,
Cretaceous carbonate and clastic sedimentary rocks, which are
intruded by diorite porphyry stocks and dikes.
Property Details
Velocity’s due diligence identified several
magmatic-hydrothermal centers with outcropping copper-gold
mineralization hosted in rocks of favourable upper Cretaceous age
and composition. In total, the Property hosts seven historically
defined porphyry, epithermal and skarn prospects, including
advanced prospects with historical drilling. No modern systematic
exploration has been carried out and the Company considers the
Property prospective for discovery of additional deposits.
Figure 1. Map showing the
location of the Property within the prospective Tethyan copper-gold
mineral belt transecting Serbia and Bulgaria and highlighting the
location of operating mines, formerly operating mines, and mines
under development. Readers are cautioned that the mines and
deposits discussed above are adjacent properties and that Velocity
has no interest in or right to acquire any interest in the deposit,
and that mineral deposits on adjacent or similar properties, and
any production therefore or economics with respect thereto, are not
in any way indicative of mineral deposits on Velocity’s properties
or the potential production from, or cost or economics of, any
future mining of any of Velocity’s mineral properties.
Within Zlatusha, an occurrence of the same name
(the “Zlatusha Prospect”) is considered a high
priority for Velocity with 11 historical drill holes having been
completed for almost 1,800m. Highlights include 11m grading 3.63
g/t gold (at surface) and 11m grading 4.33 g/t gold (at 109m below
surface). Broader zones of disseminated gold mineralization have
also been reported. Drill results from the Zlatusha Prospect are
historical in nature and Velocity has not completed any
check-sampling to verify historical drill results. The inclusion of
historical drill results provides information as to the potential
grade and nature of the immediate exploration targets within the
Zlatusha Prospect.
Velocity geologists completed sampling outcrops
for due diligence purposes. Laboratory results returned gold grades
ranging from 0.95 g/t to 1.55 g/t gold and from 130 to 759ppm
copper from Zlatusha Prospect. These results are consistent with
historical rock chip samples collected from the Zlatusha Prospect
that range from 0.55g/t to 1.32 g/t gold and from 97 ppm to
549 ppm copper.
Figure 2. Map showing the
Property in detail, together with the many mineral occurrences
within it and nearby. The Breznik gold deposit located south of
Zlatusha is fully permitted and under construction.
Velocity’s reconnaissance geological mapping
indicated multiple porphyry-related alteration zones, characterized
by intense quartz-sericite-pyrite alteration and associated biotite
altered diorite porphyry typically indicative of large / well
developed, potentially productive porphyry systems. Areas of
alteration up to 2,000m x 1,000m are characterized by advanced
argillic (quartz-alunite high-sulphidation telescoping),
quartz-sericite-pyrite, and chlorite alteration, all of which
suggests preservation of the entire magmatic-hydrothermal
system(s). Historic sampling reported up to 1.97g/t gold and 779ppm
copper. The Zlatusha Prospect is partly defined by a 600m x 400m
(>100ppb) gold-in-soil anomaly, which remains open and untested.
Outcrops of quartz vein stockwork with chalcopyrite mineralization
cutting biotite altered diorite porphyry have also been identified
in the field.
Planned Drilling
Surface exploration and geophysical surveys will
commence as soon as possible, with a view to initiating drill
testing in Q2 2023. Drilling will initially focus on the priority
Zlatusha Prospect, where interpretation of historical drilling
indicates potential for additional mineralization. Assessment of
six other existing prospects will be undertaken concurrently for
expected drill testing to commence in Q3 2023.
Plate 1. Outcropping
QSP-altered andesitic volcanic rock sampled by Velocity, grading
1.55 g/t gold and 130ppm copper (left), and altered andesite
fragmental & andesite porphyry with disseminated chalcopyrite
(right).
Commercial Terms
To exercise the Option in full and acquire a 75%
interest in the Property, Velocity must: (i) make cash payments in
the aggregate amount of $700,000; (ii) make payments in the
aggregate amount of $300,000, payable in cash or common shares of
Velocity; (iii) complete 40,000m of drilling on the Property;
(iv) deliver an Inferred Mineral Resource estimate on a
deposit on the Property prepared in accordance with National
Instrument 43-101 Standards of Disclosure for Mineral Projects
(“NI 43-101”); and (v) deliver a Preliminary
Economic Assessment on a deposit on the Property prepared in
accordance with NI 43-101, all over a period of 5 years
(Tables 1 and 2). To exercise the First Option,
Velocity must complete the earn-in requirements the (“First
Option Earn-In Requirements”) set out in Table 1 on or
before the third anniversary of the commencement date.
Table 1. Requirements to
Exercise First Option.
Date |
Cash(CAD) |
Cash (CAD)or Shares |
Drilling (m) |
Deliverable |
Vesting |
Commencement Date |
$100,000 |
$100,000 |
|
-- |
-- |
First Anniversary |
- |
- |
8,000 |
-- |
-- |
Second Anniversary |
- |
- |
10,000 |
-- |
-- |
Third Anniversary |
$250,000 |
$100,000 |
10,000 |
Inferred MineralResource estimate |
51% |
First Option Total |
$350,000 |
$200,000 |
28,000 |
-- |
51% |
Provided the First Option is exercised by
Velocity, Velocity may elect within 60 days to earn an additional
24% interest in Property through the exercise of the Second Option
by completing the earn-in requirements (“Second Option
Earn-In Requirements”) set out in Table 2 on or before the
fifth anniversary of the commencement date.
Table 2. Requirements to
Exercise Second Option.
Date |
Cash(CAD) |
Cash (CAD)or Shares |
Drilling (m) |
Deliverable |
Vesting |
Fourth Anniversary |
- |
- |
8,000 |
-- |
|
Fifth Anniversary |
$350,000 |
$100,000 |
4,000 |
Preliminary EconomicAssessment |
24% |
Second Option Total |
$350,000 |
$200,000 |
12,000 |
-- |
24% |
Total Consideration |
$700,000 |
$300,000 |
40,000 |
-- |
75% |
Velocity will be under no obligation to fulfill
any of the First Option Earn-In Requirements or Second Option
Earn-In Requirements, all of which will be at the sole discretion
of Velocity. If Velocity exercises the First Option, but chooses
not to exercise the Second Option, Velocity and Raiden will be
deemed to have formed a joint venture (“Joint
Venture”) with Velocity initially owning 51% and Raiden
owning 49%. If Velocity exercises the First Option and the Second
Option, Velocity and Raiden will be deemed to have formed a Joint
Venture with Velocity initially owning 75% and Raiden owning 25%.
If a participant's participating interest in the Joint Venture
falls below 15%, that participant will transfer its participating
interest to the other participant in exchange for the grant of an
ongoing royalty to be paid at 1% of net smelter returns (the
“1% NSR Royalty”). The participant with the
largest participating interest in the Joint Venture will have the
right, but not the obligation, exercisable at any time prior to a
production decision to purchase half of the 1% NSR Royalty (being
0.5%) for the sum of $1.5 million.
The Property is subject to an existing 2% net
smelter royalty held by Gold Bull Resources Corp. (the
“Gold Bull Royalty”), of which, prior to
commencement of commercial production: (i) an initial 0.5% of the
total Gold Bull Royalty can be purchased for USD$2,500,000
(reducing the Gold Bull Royalty from 2% to 1.5%); and (ii) a
further 1% of the total Gold Bull Royalty can be purchased for
USD$5,000,000 (reducing the Gold Bull Royalty from 1.5% to
0.5%).
Pursuant to the terms of the Letter Agreement,
the Velocity and Raiden will negotiate in good faith toward the
execution and delivery of a definitive property option agreement
(the “Definitive Agreement”), which will
incorporate the terms and conditions of the Letter Agreement and
such other terms and conditions as may be agreed to by the parties.
During the term of the Letter Agreement, and if applicable the
Definitive Agreement, if either Velocity or Raiden acquires an
interest in a property (the “Additional Property”)
located within or partially within the Property or a 5 km area of
interest extending from the outermost exterior boundaries of the
Property, the non-acquiring party may elect that such Additional
Property be included in the Property, in which case the
non-acquiring party would be required to reimburse the acquiring
party upon the exercise of the later of the First Option or the
Second Option, as applicable, as to 51% (75% after the exercise of
the Second Option by Velocity) of the acquisition costs, if the
non-acquiring party is Velocity; or 49% (25% after the exercise of
the Second Option by Velocity) of the acquisition costs, if the
non-acquiring party is Raiden.
Quality Assurance / Quality
Control
The work programs were designed and supervised
by Daniel Marinov, RPGeo, the Company’s Vice-President Operations,
who is responsible for all aspects of the work, including the
quality control/quality assurance program. On-site personnel at the
project rigorously collect and track samples which are then
security sealed and shipped to Eurotest-Control laboratory in
Sofia, Bulgaria. Samples used for the results described herein are
prepared and analyzed by fire assay using an Aqua regia digest of
50g charge with Atomic Absorption Spectrometry finish in compliance
with industry standards at Eurotest-Control laboratory in Sofia,
Bulgaria. When gold grade exceeds 10g/t the assay is repeated using
a 20g charge with gravimetric finish. A 0.5g sample split of the
milled material is prepared and analyzed by Aqua regia digest and
ICP-AES finish for 35 elements in compliance with industry
standards at Eurotest-Control laboratory. Field duplicate samples,
blanks and independent controlled reference material (standards)
are added to each batch of samples.
Qualified Person
The technical content of this release has been
approved for disclosure by Daniel Marinov, RPGeo, a Qualified
Person as defined by NI 43-101 and the Company’s Vice President
Operations. Mr. Marinov is not independent of the Company as he is
a director, officer, shareholder, and holds incentive stock
options.
About Velocity Minerals
Ltd.
Velocity is a precious metals and copper
explorer focused in Eastern Europe. In Bulgaria, Velocity has a 70%
interest in the Tintyava property, which includes the
Prefeasibility-stage Rozino deposit. Velocity also has a 70%
interest in the Momchil property (which includes the Obichnik
deposit), a 70% interest in the Nadezhda property (which includes
the Makedontsi deposit), a 70% interest in the Dangovo property
(which is contiguous with the Makedontsi deposit), and a 100%
interest in the Iglika property. Velocity’s management and board
includes mining industry professionals with combined experience
spanning Europe, Asia, and the Americas as employees of major
mining companies as well as founders and senior executives of
junior to mid-tier public companies.
On Behalf of the Board of
Directors
“Keith Henderson”President & CEO
For further information, please
contact:
Keith HendersonPhone:
+1-604-484-1233E-mail: info@velocityminerals.comWeb: www.velocityminerals.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
This news release contains forward-looking
statements and forward-looking information (collectively,
"forward-looking statements") within the meaning of applicable
Canadian and U.S. securities legislation. All statements, other
than statements of historical fact, included herein including,
without limitation, statements regarding the exercise of the First
Option or the Second Option by Velocity, the entering into of the
Definitive Agreement, the formation of the Joint Venture, and the
anticipated business plans and timing of future activities of the
Company, are forward-looking statements. Although the Company
believes that such statements are reasonable, it can give no
assurance that such expectations will prove to be correct. Often,
but not always, forward looking information can be identified by
words such as "pro forma", "plans", "expects", "may", "will",
"should", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes", "potential" or variations of
such words including negative variations thereof, and phrases that
refer to certain actions, events or results that may, could, would,
might or will occur or be taken or achieved. In making the
forward-looking statements in this news release, the Company has
applied several material assumptions, including without limitation,
that it will obtain TSX Venture Exchange acceptance, if applicable,
that market fundamentals will result in sustained precious metals
demand and prices, the receipt of any necessary permits, licenses
and regulatory approvals in connection with the future development
of the Property in a timely manner, the availability of financing
on suitable terms for the development, construction and continued
operation of the Property, and the Company’s ability to comply with
environmental, health and safety laws.
Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to
differ materially from any future results, performance or
achievements expressed or implied by the forward-looking
information. Such risks and other factors include, among others,
operating and technical difficulties in connection with mineral
exploration and development and mine development activities at the
Property, the fact that the Company’s interest in the Property is
an option only and there is no guarantee that such interest, if
earned, will be certain, estimation or realization of mineral
reserves and mineral resources, requirements for additional
capital, future prices of precious metals and copper, changes in
general economic conditions, changes in the financial markets and
in the demand and market price for commodities, possible variations
in ore grade or recovery rates, possible failures of plants,
equipment or processes to operate as anticipated, accidents, labour
disputes and other risks of the mining industry, delays or the
inability of the Company to obtain any necessary permits, consents
or authorizations required, including TSX Venture Exchange
acceptance, financing or other planned activities, changes in laws,
regulations and policies affecting mining operations, currency
fluctuations, title disputes or claims limitations on insurance
coverage and the timing and possible outcome of pending litigation,
environmental issues and liabilities, risks relating to epidemics
or pandemics such as COVID-19, including the impact of COVID-19 on
the Company's business, risks related to joint venture operations,
and risks related to the integration of acquisitions, as well as
those factors discussed under the heading "Risk Factors" in the
Company's latest Management Discussion and Analysis and other
filings of the Company with the Canadian Securities Authorities,
copies of which can be found under the Company's profile on the
SEDAR website at www.sedar.com.
Readers are cautioned not to place undue
reliance on forward looking statements. Except as otherwise
required by law, the Company undertakes no obligation to update any
of the forward-looking information in this news release or
incorporated by reference herein.
Figure 1 accompanying this
announcement is available
at:https://www.globenewswire.com/NewsRoom/AttachmentNg/b9b3e64d-4bce-477f-9546-58be13979090
Figure 2 accompanying this
announcement is available
at:https://www.globenewswire.com/NewsRoom/AttachmentNg/a8b83723-b873-4141-95df-251892e5a702
Plate 1 accompanying this
announcement is available
at:https://www.globenewswire.com/NewsRoom/AttachmentNg/474cec97-57c2-4273-aa65-32259ca78e8b
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