Virginia forms alliance with Noranda (June 12, 2001)

Virginia Gold Mines (VIA-M) has signed a strategic alliance with Noranda (NOR-T) to jointly explore a 3,600-sq.-km area in northern Qubec, for base metal targets.

Under the deal, Noranda has subscribed to a private placement of 633,333 Virginia shares at $1.50 apiece for gross proceeds of $950,000.

The proceeds are earmarked to help fund a $1.9-million first-phase exploration program.

Noranda acquires the right to acquire a 55% interest in any target outlined by the alliance. The targets will be jointly developed by the Noranda (55%) and Virginia (45%). Noranda will act as operator.

The deal is subject to regulatory approval.

Meanwhile, Virginia is gearing up for a 16-hole, 2,500-metre drilling program over several gold-bearing zones and geophysical anomalies at the La Grande Sud gold project in the James Bay region of Quebec. A second 2,500-metre drilling program will follow in the fall or winter. The project’s resources stand at 350,000 oz. gold.

The holes will target:

• the Veines zone, where previous drilling returned up to 6.5 metres grading 18.1 grams gold per tonne;
• the Ugo zone, where channel sampling returned up to 16 metres grading 1.75 grams gold and drilling cut up to 3.4 metres of 10.9 grams gold; and
• the East area, where channel sampling returned 1.5 metres grading 7.23 grams gold and 1 metre of 20.7 grams gold.

Under a renegotiated deal, Cambior (CBJ-T) can earn a 50% interest in La Grande Sud by funding $5.5 million in exploration before June 1, 2007.