Readers are cautioned that no assurance can be given as to ValGold's ownership or title to any properties in Venezuela at this time as a result of the Venezuelan government's issuance of a Decree with the Rank Value and Force of Organic Law Reserving to the State the Activities of Exploration and Exploitation of Gold and their Related and Auxiliary Activities in 2011. The Company's operations in Venezuela have been suspended for several years. ValGold does not intend to undertake any activities in Venezuela for the foreseeable future as a result of the political, economical and social disruptions in the country. The following material is based on ValGold's past operations and may no longer be accurate. It is presented for informational purposes only.
In October 2007, ValGold completed the purchase of Honnold Corp. and its subsidiaries from Cisneros Organization, a private Venezuelan company based in Caracas. ValGold's Venezuelan mineral concessions all arose from this acquisition and are all located within the Guyana Shield. Prior operators had spent US$38 million on the properties.
The Guyana Shield occupies the northern part of the Amazon Craton between the Amazon and Orinoco river basins. The geology as a whole is poorly understood, reflecting minimal development, limited access, as well as intense tropical weathering and ground cover across a large area.
ValGold's exploration licenses are grouped in three separate areas and cover a total area of approximately 65,872 hectares. The largest group is located 40 km northwest of the Kilometre 88 area and comprises 16 licenses totalling approximately 659 km. This group is further broken down into two contiguous blocks of licenses that are referred to as the Chicanan East and Chicana West properties. The remaining 5 licenses are located at El Callao, 60 km to the southeast. They are referred to as the La Increible and Vetas Vuelvan Caras properties, respectively.
In 2006, ValGold commissioned a NI 43-101 compliant report on the mineral properties held by Honnold Corporation. This report investigated the mineral exploration, development and potential production activities for these properties. In 2008, another report was commissioned to provide an independent mineral resource estimate on the Los Platos gold occurrence. Both of these reports are available to be viewed under Technical Reports or on www.sedar.com.
In 1992, Gold Fields Venezuela Limited (Gold Fields) formed a joint venture with a Venezuelan company, Consorcio Minero Laguna Santa Rita C.A. (CMLSR), to fund and explore for gold on the Increible concessions. Over the following two years, Gold Fields carried out a program of geological mapping, trenching, soil sampling and drilling completing 35 diamond drill holes totaling 4,719 meters in length. Most of this work was focused along the Los Chivos Shear Zone which traverses the central portion of the Increible 3 concession. Gold Fields also focused its attention in the area adjacent to the small Santa Isabel mine in the Increible 5 concession. Little work was carried out by Gold Fields during the following years and in 2002 the company terminated its joint venture with Honnold Corp., the parent company to CMLSR.
La Increible Concession:
The surface geology of La Increible has been extensively masked as a result of saprolitization, laterite formation, extensive quartz stonelines and by recent colluvium and alluvium in low lying topography. Although simple soil colour mapping and presence of quartz vein scree are the only effective mapping tools in many parts of the concession, the technique has provided valuable information on the stratigraphy and has located important geological contacts that have been the focus of detailed exploration.
The results of the geological mapping reveal a complex volcanic and sedimentary succession that has been strongly folded and sheared. The succession in Increible 3 is predominantly a sedimentary sequence. Graded arkosic sandstone, siltstone and shale turbidite-like cycles are interpreted to represent epiclastic sedimentation in southern areas. A major geological break occurs in the central areas where a period of depositional quiescence was replaced by active volcanism and exhalative activity. Basalt, andesite, dacite and tuffs are present forming a narrow unit which is approximately 200 metres wide. Intense shearing and emplacement of veins quartz are associated with it.
The mafic unit referred to as the Los Chivos Unit corresponds with the position of elevated gold concentrations in soils and a reduction to pole ground magnetic highs. At 10 surface, it is represented by a linear topographic ridge. It grades into chert, fine grained epiclastic tuffs, quartzite and manganese-rich horizons. In northern areas quartz porphyries interpreted as dacite form prominent outcrops. These are bounded by a sequence of phyllites, siltstones, ferruginous and quartzites.
The Los Patos gold occurrence is located within the La Increible 3 concession approximately 20 km northeast of the town of El Callao and 4.5 km northeast of the La Tomi gold mine. It is one of several gold occurrences found along the east-west striking, 6.8 km long, Los Chivos Shear Zone which cuts through the central portion of the La Increible 3 concession.
Los Patos was the first gold occurrence in Venezuela to be drilled by ValGold. During the spring and early summer of 2007 the Company tested the occurrence with 28 diamond drill holes for an accumulated length of 7,971 metres. These holes outlined up to five parallel zones of mineralization, which when averaged with the intervening lower grade material gave zones up to 58.0 metres wide assaying 1.27 g/t gold (true width 95%). Other notable intersections include 4.75 g/t gold over 17.0 metres in hole LI307-07 and 3.98 g/t gold over 36.0 metres in hole LI307-11 (see table below). With depth the mineralization appears to coalesce into one or two zones but sometimes with very high grades such as those found in hole LI307-22 which averaged 14.66 g/t over 4.0 metres.
Drilling has tested the Los Patos deposit down to a vertical depth of approximately 220 metres below surface and along strike for a maximum distance of 240 metres. To the east, the mineralization narrows and weakens, but further drilling is warranted in this direction.
MAIN LOS PATOS 2007 DRILL INTERSECTIONS (avg. > 1 g/t Au)
Chicanan East & Chicanan West Concessions
On a local scale, the Chicanan East and West concessions are underlain by felsic to mafic volcanics and minor associated tuffaceous sediments intruded by a large ultramafic to mafic layered intrusive complex referred to as the Mochila Layered Complex. This layered complex is estimated to be up to 2.5 km thick and covers several tens of square kilometers. Also intruding the volcanic rocks are dykes, sills and small intrusions of dacite porphyry, and quartz and/or feldspar porphyry. Although many large faults and shear zones cut the property the most notable is the Chicanan Shear Zone. This shear zone follows the Chicanan River and essentially separates the Chicanan East and West properties. The Chicanan East Shear Zone is up to five kilometers wide and is host to several gold occurrences the most prominent being the Carolina, Serrucha and Panamá.
The Mochila gold occurrences cover several square kilometres and are located in the Chicanan West concessions approximately 60 kilometres northwest of the Kilometre 88 area. Access to the area is either via the Chicanan River from El Dorado or helicopter from Tumeremo.
Gold mineralization in the Mochila area is hosted by mafic to ultramafic rocks of the Mochila Layered Intrusion. This large layered intrusion is comprised of a lower and upper ultramafic sequence separated by a middle gabbro unit. The intrusion has also undergone at least one phase of folding and is faulted along its axial plane by a regional structure known as the Mochila Lineament.
The Mochila gold occurrence area is considered as having excellent potential for the discovery of low-sulphide gold-quartz veins. An example of this style of mineralization is found near El Callao at Gold Field's Choco 10 mine where gold mineralization is found along and in proximity to a gabbro contact. Reserves at this deposit are estimated to be in the order of 6 million ounces with the potential to increase with exploration and mine development.