| By Christina de Wit | | | | estimated gold resource of 31 million ounces. |
| | | | These success stories plus the current run on |
| Sept. 25, 2007 | | | | gold underscore the potential for well-placed |
| | | | junior explorers to achieve a comparable |
| There's an old Venezuelan proverb that says | | | | level of growth. |
| "Join with good men and you will be one of | | | | |
| them." ValGold Resources' (TSX.V:VAL) | | | | There are several advantages to investing in |
| management team appears to have taken this | | | | Venezuela. It should be emphasized that |
| piece of wisdom to heart as the company | | | | there has never been an expropriation in the |
| embarks on an ambitious drill program at the | | | | country's history. Labour costs are low, and |
| Chicanan West Complex located approximately | | | | diesel is only 15¢ a litre. The government |
| 50km northwest of the Kilometre 88 gold camp | | | | also does not demand a royalty on production, |
| in Bolivar State, Venezuela. | | | | instead preferring a streamlined corporate |
| | | | taxation structure. |
| This latest phase of development represents | | | | |
| an expansion of the company's presence in | | | | Despite negative American press coverage of |
| Venezuela. ValGold has completed the first | | | | Hugo Chavez's governance, explorers and |
| stage of drilling of its program at the Los | | | | operators in Venezuela have largely enjoyed a |
| Patos gold occurrence within the Lo Increible | | | | progressive work environment. The Chavez |
| 3 Concession, also located in Bolivar State, | | | | administration has not deterred serious |
| Venezuela. Lo Increible 3 is 20km northeast | | | | investors and players from working and |
| of the town of El Callao and 4.5km northeast | | | | profiting in Venezuela. According to Jeff |
| of Crystallex's La Tomi gold mine. ValGold's | | | | Stuart, ValGold's head of Investor Relations, |
| other projects include properties in Guyana | | | | the current government has made considerable |
| and northwestern Ontario. | | | | efforts to create a hospitable mining |
| | | | investment climate. "The government [has] |
| The Chicanan West Complex consists of 11 | | | | actually been really, really good to us," he |
| mining concessions comprising a sizeable land | | | | said. Bureaucratic red tape is not an issue, |
| holding of 522 km2. This area is located | | | | as "we got permits in six days". They have |
| within the Guiana Shield, which hosts a | | | | provided the company with government |
| greenstone belt that is known to be highly | | | | assistance and who have facilitated its work |
| prospective for gold. The Complex is | | | | program, and have helped ValGold to avoid |
| characterized by an island-arc sequence with | | | | conflicts with artisanal Brazilian miners |
| intermittent periods of volcanism and | | | | working in the area. |
| sedimentation with ancillary quartz-porphyry | | | | |
| dikes - an environment considered by many | | | | The company's management has a lifetime |
| geoscientists to be favorable for mineral | | | | history of dealing with properties of merit. |
| discoveries. | | | | Its chairman, Andrew Milligan, is a former |
| | | | president of Glamis Gold Ltd., Tom Pollock, |
| The program's primary target is the Mochila | | | | the company's vice president of exploration, |
| (Spanish for 'knapsack') gold occurrence, | | | | was the China Country Manager for BHP during |
| represented by Proterozoic-age mafic to | | | | his 20-year career with them, and ValGold's |
| intermediate intrusive to metavolcanic rocks | | | | president, Stephen Wilkinson, is past |
| in an area covering about 10km2. Gold occurs | | | | president of Northern Orion (currently |
| as enrichments along the contacts of specific | | | | trading around $6.50 per share). Pedro |
| layers or units with the Mochila Layered | | | | "Peter" Tinoco, one of the company's |
| Complex and along a north-trending lineament. | | | | directors, was the president of the |
| Proterozoic-age rocks are the major source of | | | | Venezuelan Chamber of Mines for two |
| mineralization in the world. Well-known | | | | consecutive terms, as well as the president |
| examples of major, defined deposits with very | | | | of the Latin American Mining Organization |
| similar geology in the area include | | | | from 1996-2006. Since 1989, he has been the |
| Crystallex's Las Cristinas and Gold Reserve's | | | | vice president of the mining division of the |
| Brisas discoveries. | | | | Venezuela-based Cisneros Group of Companies, |
| | | | one of the largest privately held media, |
| Several gold occurrences (as well as base and | | | | entertainment, telecommunications and |
| precious metal occurrences), have been | | | | consumer products conglomerates in the world. |
| identified on the property, with two types of | | | | Through Mr. Tinoco, ValGold has strong ties |
| gold mineralization. The first, hosted by the | | | | to some of the most influential people in |
| Mochila Layered Complex, is found along a | | | | South American mining - a few good men and |
| regional fault. This is an example of axial | | | | women indeed. |
| plane foliation, in which hot waters carrying | | | | |
| metal ions are forced into cracks created by | | | | ValGold is uniquely well-placed for success |
| folding and faulting. The second type of gold | | | | in Venezuela, as several key factors make it |
| mineralization is found within the | | | | a wise buy-and-hold investment in this rising |
| sericitized Chicanan Shear Zone. | | | | gold market: Seasoned management with a |
| | | | stellar Latin American track record, projects |
| The major area of interest is the upper | | | | at drilling stage, large holdings close to |
| contact of the middle gabbro unit of the | | | | major producers in a still-underexplored |
| layered complex. According to the company's | | | | region, a solid relationship with a |
| 43-101 report (p.60), the "Mochila Lineament | | | | mining-friendly government, and a roaring |
| contains numerous artisanal workings covering | | | | gold market. This is particularly auspicious |
| a surface area of more than 14km by 3km. | | | | timing for investors, as drill results from |
| Within this area, several world-class | | | | La Mochila are expected to roll in over the |
| deposits could be developed. Three target | | | | next 8 to 10 weeks. |
| areas have been identified in a selected area | | | | |
| of the lineament and are ready for drill | | | | This article is intended for information |
| testing." A minimum of 5000m of coring in | | | | purposes only, and is not a recommendation to |
| 15-20 holes is planned at this stage. | | | | buy or sell the equities of any company |
| | | | mentioned herein. It is based on sources |
| Venezuela has had a long history of | | | | believed to be reliable, but no warranty as |
| successful gold exploration. Presently, | | | | to accuracy is expressed or implied. The |
| several companies have operating mines in the | | | | opinions expressed in the article are those |
| Venezuela's Guiana shield: Crystallex, Hecla, | | | | of the author except where statements are |
| Gold Fields (JSE:GFI), Gold Reserve (GRZ), | | | | attributed to individuals other than the |
| and Rusoro (RML). Chicanan West is located in | | | | author, in which case the opinions are those |
| the same belt as two major deposits: Las | | | | of the individual to whom they are |
| Cristinas (Crystallex), and the Brisas (Gold | | | | attributed. |
| Reserve), which reportedly host a combined | | | | |