Virginia forms partnership with Placer Dome

Weeks after announcing a “strategic alliance” with Noranda (NRD-T), Virginia Gold Mines (VIA-T) has teamed up with Placer Dome (PDG-T) to explore for precious metals in the Labrador Trough region of Quebec.

The 50-50 exploration agreement will last one year, during which time Virginia will spend $200,000 on a geological reconnaissance program aimed at finding precious metals, including platinum group metals (PGMs). The program can be renewed for additional years with the consent of both parties.

With dozens of projects on the go, Virginia expects a total of $6.5 million to be spent on its properties in 2001. The company is active in Quebec, with work focused on gold-bearing and polymetallic targets in the James Bay region. The junior has already launched field programs over the La Grande Sud, Poste Lemoyne, Apple, Caniapiscau and LG 3.5 projects.

At La Grande Sud, Virginia and partner Cambior (CBJ-T) have started a 2,500-metre drill program. At Poste Lemoyne, Virginia and TGW (GWG-M), formerly Boreal Exploration, plan to carry out stripping, to be followed by drilling. Last year, the companies uncovered two new showings, which returned values of up to 21 grams gold per tonne over 3 metres.

Virginia plans to follow-up encouraging surface values hit last year at the LG 3.5 project. Samples returned 11.8% copper over 3.7 metres, 4.37% copper over 3.6 metres and 5.7% copper over 2 metres. More drilling is planned for this summer.

In northern Quebec, partner Billiton will fund a $1.4-million geological and geophysical program over the Lac Gayot belt.

Virginia’s alliance with Noranda will focus on ground covering 3,600 sq. km. in the province’s central or northern region. The grassroots program is aimed at finding base metal deposits.

Noranda has already completed a private placement of 633,333 Virginia shares priced at $1.50 each, for gross proceeds of just less than $1 million. The proceeds will be used to complete the first phase of exploration work, budgeted at $1.9 million.

The major can acquire a 55% interest in any target generated by the work programs.