Virginia funded for programs in Quebec

Few juniors have generated as much exploration smoke as Virginia Gold Mines (VIA-T) or assembled a land package as prospective as that company’s 14 gold and base metal properties in northern Quebec. Kerry Smith, mining analyst with National Bank Financial, says Virginia “appears poised to deliver some promising exploration results in 2000.”

In a recent research report, Smith noted that with $11 million in its treasury, Virginia is well-funded to carry out this year’s work programs. Of the $4 million to be spent on high-priority projects, $2.5 million will come from joint-venture partners.

“Virginia has an excellent opportunity this year to deliver good exploration results,” Smith writes. “With the strong nickel market, Virginia’s Gayot property, currently being drilled, offers good potential in the short term.”

Smith issued a “speculative buy” recommendation for the junior, which currently trades at $1.45, within a 52-week range of 42 and $1.58. It has 26 million shares outstanding.

Virginia has focused its efforts on the James Bay region, which has good infrastructure as well as highly prospective but under-explored geology. The land package was assembled by Andre Gaumond, the geologist who heads up Virginia.

Smith has taken a particular shine to four of the company’s projects: the wholly owned Gayot nickel project; the Grand Sud gold project, also 100%-owned; and the 50%-held Duquet and Payne Bay projects.

Gayot is an unexplored volcanic belt where surface sampling in 1999 returned values of between 1.4% and 95% nickel, 0.5% copper, and 2.9% platinum group metals over 3.85 metres. “A $0.7-million exploration program has just started,” Smith notes, “including geophysics and a 3,000-metre drill program.”

Billiton Canada has an option to earn a half-interest in Gayot by spending $4.5 million over 3.5 years.

La Grand Sud is a large greenstone belt optioned to Cambior (CBJ-T), which can earn a 50% stake by spending $7 million over six years. Work to date, including mapping, sampling, trenching and drilling, has outlined a gold resource of more than 400,000 contained ounces in two zones. “This project is in the very early stages of exploration and will hopefully be drilled in 2000,” Smith writes.

A 1,300-metre drill program is planned for the Duquet project, where previous work has returned gold and base metal values. The company has two partners here, and subsequent earn-ins will result in each of the companies holding a one-third interest.

Smith describes Payne Bay as “a Raglan-type nickel target.” Beginning in mid-year, exploration crews will attempt to follow up surface showings that have returned grades of up to 6.5% nickel and 0.34% cobalt.