Valerie completes due diligence

Having completed its due diligence, junior Valerie Gold Resources (VLG-V) is proceeding with exploration of the Santa Barbara gold-copper project in Ecuador.

Valerie can earn a half-interest in the property from TVX-Normandy Americas by paying US$100,000 in cash and spending US$4 million on exploration over the next three years.

TVX-Normandy, which is owned 50.1% by TVX Gold (TVX-T) and 49.9% by Normandy Mining, will be granted warrants to buy up to 3 million shares of Valerie, including 750,000 shares at $2 after one year, 1 million shares at $3.50 after two years and 1.25 million shares at $5 within three years.

Valerie must spend at least US$500,000 in the next nine months, and at least 60% of the proceeds it receives from the warrants.

If one company decides to withdraw from the joint venture, that party’s interest will be diluted incrementally, eventually converting to a 20% carried interest until the completion of a bankable feasibility study or until exploration expenses exceed US$20 million. Three main targets have been identified on the property: the SB gold-copper prospect, the El Hito copper porphyry prospect and the Napintza gold prospect.

The most advanced of these is the SB prospect, where soil sampling has identified an anomalous gold-copper showing measuring 1,200 by 1,500 metres.

The core of the anomaly is defined by a contour (300 parts per billion gold and 500 parts per million copper) that measures 950 by 350 metres. A 650-metre-long bulldozer trench cut across the centre of the anomaly averaged 0.85 gram gold per tonne and 0.25% copper over its entire length.

Valerie says the presence of intense surface alteration indicates that grades will improve with depth.

Three kilometres to the east is El Hito, a porphyry copper target, where geochemical sampling has identified a copper-in-soil anomaly measuring 500 by 2,000 metres. The anomaly remains open to the north and south. The core of the anomaly is defined by a 500-parts-per-million copper contour that measures 750 by 300 metres. Hand trenching over the anomaly has returned assays of up to 0.92% copper from the heavily leached surface rocks.

At Napintza, 5 km south of the SB prospect, limited work has returned anomalous gold values of up to 1 gram gold per tonne. Anomalous zinc values in stream sediments and soil sampling have defined a target area of about 1.5 sq. km.The company plans to start drilling this month, targeting the SB prospect.