Metallica buys Venezuelan concessions

CDN-listed Metallica Resources has bought the Cuyuni I through VI concessions in Venezuela’s Bolivar state.

The concessions, comprising 3,000 hectares, are in the historic alluvial mining camp known as El Foco, which has produced more than 1 million oz. gold. Although the area is known for placer gold production, very little systematic exploration has been conducted to find saprolitic or lode-type mineralization.

Both Cuyuni V and VI contain prospects similar to those found on neighboring properties held by Homestake Mining (NYSE) and Canarc Resource (VSE). These prospects appear to be controlled by a north-trending structure with abundant hydrothermal alteration and zones of veining.

“This is a very significant project for Metallica,” President Craig Nelson told The Northern Miner. “We’ve budgeted $500,000 for exploration, which started last week; $250,000 will be spent on the first phase, which will consist of line-cutting, soil sampling and trenching. Then, sometime in August, we’ll probably start the second phase and spend $250,000 drilling targets.”

To acquire the concessions, Metallica will pay US$5 million over 15 months and issue US$500,000 worth of shares to Venezuelan-based Representaciones El Rama C.A., thereby entitling the former to acquire all outstanding shares in the latter.