Junior
The non-brokered private placement comprises 632,000 units priced at 85 apiece for total proceeds of $537,200. Each unit consists of a share and a warrant exercisable at $1.11 within a year. As a result, the number of outstanding VVC shares increases to 25.9 million.
The closing comes two days after the company signed a deal to buy a 50% interest in the Chen Er gold mine. Situated in the Kunlun-Xinling mountains of southern Shaanxi province, the mine is accessible by paved and asphalt roads from the capital, Xi’an.
To acquire its half stake in a new joint-venture with its Chinese partners, VVC must spend US$6.25 million over three years, either in cash or in the transfer of technology and equipment.
VVC will manage the joint-venture committee and appoint a chairman and general manager.
A producer since 1986, Chen Er now operates at the rate of about 500 tonnes per day. The mine is serviced by a mill complex, which includes multi-line production, tank leaching, and two ball mills with daily capacities of 500 and 200 tonnes. (The 200-tonne-per-day circuit has been rented to an arm’s-length company until July 2006.)
In 2003, the mine produced 32,000 oz. gold from ore grading 5 grams gold and 20 grams silver per tonne, plus 8% lead and 1% copper.
VVC says the mining operation is “profitable and performing with a satisfactory recovery rate.” Nonetheless, the company is expected to upgrade the grinding and recovery circuits.
Exploration potential is believed to exist in the periphery of the mine, where workings are shallow.
At present, the mine has no documented resource, and no drilling has been carried out.
In the years ahead, VVC plans to drift on mineralized veins from a newly completed, 500-metre vertical shaft to test and develop known zones and extensions.
In Canada, VVC has been trying to revive the Beaver Brook antimony mine in Newfoundland’s Botwood Basin (T.N.M., April 23-29/04).
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