Venoro to acquire gold mine interest

An agreement reached with Colombia-based Sociedad Agrominera El Cerro sets the stage for Venoro Gold (VSE) to acquire an interest in a small, operating gold mine in Antioquia, Colombia.

Agrominera will transfer its ownership of the San Diego mine and concessions, covering 496 hectares, as well as the surface rights to an additional 1,800 hectares, to a newly formed company called Inversiones Mineras. Venoro will be granted a 51% interest in return for incurring exploration and development expenditures of US$2.3 million over a period of 30 months, concluding with a feasibility study for a larger mine and plant.

A formal agreement remains to be signed, and the deal is subject to regulatory approval.

Mining on the San Diego concession dates back to before the 1770s, with most of the production coming from 7 of over 20 presently identified vein structures. The veins strike in an easterly trend and dip 45-80 degrees to the south.

Agrominera is currently mining the Las Hebras vein at a rate of 40-60 tonnes per day. The vein is stoped continuously over a length of 260 metres and to a depth of over 200 metres below surface. The grade of the ore typically runs 5-15 grams gold per tonne. Venoro believes a potential to outline actual minable reserves exists in the downdip extension of the vein. The concession has seen no modern exploration or development work.

The ore is processed on site through a primitive mill that consists of a crusher, ball mill and shaker tables. With a gold recovery rate of only 50-55%, Venoro’s president, Rodney Duncan, says the present system is allowing the fine-grain gold to pass through. He indicates the mine site is producing somewhere in the range of 2,000 oz. per year.

Once the agreement is formalized, Venoro is committed to spending US$800,000 during the first 12 months on exploration, putting an assay lab into operation and improving the recovery rate of gold.

Meanwhile, the company reports it is preparing final documentation for submission to the Vancouver Stock Exchange that will enable it to acquire up to 50.1% of the La Union and Bonanza gold mines in the Puntarenas province of Costa Rica. Terms of the acquisition call for expenditures of US$3 million over a three-year period, staged payments totalling US$525,000 over 12 months and the issuing of shares.

Duncan says the company is currently restructuring its Venezuelan properties. In June, 1993, Venoro acquired an option from Francisco Gold (VSE) to earn an initial 65% interest in the El Placer and San Raphael concessions by assuming the balance of payments to the vendors, which at the time totalled US$5.6 million over four years. In addition, a bankable feasibility study is to be completed by June, 1997.

The first phase of exploration, completed this past February, tested an extensive network of gold-bearing quartz veins within the two contiguous claim blocks. Work included mapping, geophysics, geochem sampling, 7,100 metres of trenching and 45 drill holes totalling 2,975 metres. Venoro says the results show high grade gold mineralization occurring over narrow widths with little continuity between holes. A follow-up drill program is planned to test the ore shoots at depth, several of which remain open.

Venoro has approximately 14 million shares outstanding (17.1 million fully diluted) and working capital of $300,000.