{"id":112272,"date":"2017-09-05T16:38:08","date_gmt":"2017-09-05T20:38:08","guid":{"rendered":"http:\/\/countingpips.com\/?p=112272"},"modified":"2017-09-05T16:38:08","modified_gmt":"2017-09-05T20:38:08","slug":"velocity-minerals-exciting-gold-play-in-bulgaria","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/09\/velocity-minerals-exciting-gold-play-in-bulgaria\/","title":{"rendered":"Velocity Minerals: Exciting Gold Play in Bulgaria"},"content":{"rendered":"
September 5, 2017<\/div>
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By The Gold Report<\/b><\/p>\n

Source: Peter Epstein for Streetwise Reports<\/em> \u00a0\u00a009\/04\/2017<\/a><\/b><\/p>\n

Peter Epstein of Epstein Research discusses Velocity Minerals’ recent gold exploration in Bulgaria.<\/p>\n

\"Velocity<\/p>\n

Velocity Minerals Ltd. (VLC:TSX.V)<\/a> is a gold (Au) exploration & development junior focused on eastern Europe. {Others in the region include Eldorado Gold, Nevsun, Freeport McMoRan, Rio Tinto, First Quantum, Teck, Lundin Mining.} In July, the TSX Venture exchange approved a transformational transaction in which the company acquired options on two highly prospective properties in southeastern Bulgaria.\u00a0 In conjunction with these new assets, a talented new management team and Board is in place.<\/p>\n

Velocity is aligned with private Bulgarian gold miner Gorubso Kardzhali\u00a0{owner of the optioned\u00a0projects\u00a0and the\u00a0only company in Bulgaria with a permit for cyanide-related processing of gold ores}.\u00a0 Gorubso has been producing from its high-grade underground\u00a0Chala\u00a0gold mine for over 10 years and owns \/ operates a newly built (2011) Carbon-In-Leach (CIL) processing plant that has excess capacity.\u00a0 Close ties with Gorubso helps immensely in interactions with local communities and governmental bodies. \u00a0{See\u00a0Corporate Presentation<\/a>.}<\/p>\n

Rozino Gold Project\u0097\u00a070% Earn-in\u00a0Option<\/strong><\/p>

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Velocity holds an option, exercisable for six years, to acquire an undivided 70% interest in the\u00a0Tintyava property, granted by Gorubso Kardzhali A.D. (Gorubso).\u00a0 The Rozino project, which is the subject of a recently filed\u00a0Technical Report<\/a>, is located within the Tintyava property, which has an area of 163 sq. km.\u00a0 To exercise the option, the company must deliver an NI-43-101-compliant PEA.<\/p>\n

The Rozino project is located 20 km east of the 0.85 Moz Ada Tepe\u00a0gold deposit\u00a0currently being developed by\u00a0Dundee Precious Metals, 50 km southeast of Kardzhali, host to tailings & gold processing facilities operated by Gorubso, and 350 km east-southeast of the capital of Sofia.<\/p>\n

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On August 21st\u00a0results of the first two drill holes at the company’s\u00a0Rozino gold project\u00a0<\/a>were released. Keith Henderson, Velocity’s\u00a0President & CEO\u00a0commented,<\/p>\n

“These results are among the best grades ever returned from the project and the drill holes clearly demonstrate the potential for thick, high-grade gold mineralization\u00a0<\/em>between historical drill fences<\/em><\/strong>.<\/em><\/p><\/blockquote>\n

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Notice that I added\u00a0boldface\u00a0in the above quote, “between historical drill fences.<\/strong>” \u00a0The success of Velocity Minerals’ main project revolves around that sentence.\u00a0 In the 1980s, a Bulgarian state-run company explored Rozino under the erroneous assumption of a flat-lying exploration target (which called for routine vertical drilling).\u00a0 However, as\u00a0Gwen Preston,\u00a0editor of “Resource Maven<\/a>,” explains in her recent report on Velocity,<\/p>\n

“….the gold was not in a flat lying body but in steeply dipping structures that the vertical holes missed completely.\u00a0 In most cases, each vertical hole cut between two steep structures and therefore only cut through the disseminated mineralization in between. \u00a0The next round of exploration from 2001 to 2005 involved angled holes, but the geologic concept was still flawed \u0096 this group drilled angled holes, but to the northwest. \u00a0 As a result, they too drilled parallel to and between the mineralized structures at Rozino, which run northwest and dip very steeply.”<\/em>\u00a0—\u00a0Gwen Preston, editor of\u00a0Resource Maven<\/a>, a weekly newsletter on investing in the metals space.<\/p><\/blockquote>\n

Therefore, the news of the first two drill holes, including a\u00a0near-surface interval of 39 m of 4.11 g\/t Au\u00a0goes a long way towards supporting the thesis that decades worth of historical drilling that provided some useful information, was largely ineffective.\u00a0 These results come on top of the\u00a0only other angled drill hole, drilled in the right direction…. \u00a0#R-245 in 2006 by\u00a0Asia Gold,\u00a0returned\u00a068m at 3.15 g\/t Au,\u00a0including 11.39m at 8.09\u00a0g\/t Au. If management is on to reasonably thick, near-surface intervals of 2-4+ g\/t gold, (the company continues to drill) then other key aspects of the Rozino project will take on new meaning.<\/p>\n

By that I mean, for example, there are very promising historical trench samples including,<\/p>\n

17m @ 3.39 g\/t Au, 4.53 g\/t Ag\u00a0and\u00a014m @ 4.29 g\/t Au, 2.58 g\/t Ag<\/strong><\/p>\n

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But these samples were never followed up on, perhaps because ongoing drill results (drilled in the wrong orientation) were not as exciting as what Velocity might find.\u00a0 Still, according to the technical report, the potential for additional sub-parallel vein zones to the main deposit is thought to be good and the targets there are essentially untested by drilling.<\/p>\n

And that’s not all, in addition to strong trench samples, note what the\u00a0technical report<\/a>\u00a0had to say about preliminary metallurgical test work (–\u00a0page 20),<\/p>\n

“Preliminary metallurgical test work carried out by Geoengineering, Lakefields, Caracal and Wardell Armstrong suggests that recoveries by cyanide leaching are\u00a0above 90%, with\u00a0no deleterious elements and the deposit\u00a0should be amenable to simple low cost processing. This is consistent with LSE deposits elsewhere in the world, where similar grade mineralisation is mined.”<\/em><\/p><\/blockquote>\n

There has been a substantial amount of work done on the property by at least four groups.\u00a0According to the technical report, work included;\u00a01:2,000 scale geological mapping\u00a0(8 sq km), soil sampling\u00a0(2,079 stations), trenching\u00a0(clearing of existing state trenches and new trenches)\u00a0for 3,978m, channel sampling from trenches\u00a0(2,411 samples),\u00a055 diamond drilling core holes for 7,409m, assay results of drill core\u00a0(4,918 samples),\u00a012.2 line km of ground magnetic surveying and\u00a01.5 line km of Induced Polarization geophysical profiling.<\/p>\n

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Key Management Team & Board Members<\/strong><\/p>\n

The newly assembled management\/technical team and Board really stands out for a company with a market cap of just ~C$ 18 million.\u00a0 In addition to Bulgaria, team members have worked in\u00a0eastern and southern Africa-Eurasia, central Asia, central-south America, Australia, Peru, Canada, Mexico, the U.S., Namibia, Burkina Faso, Turkey, Yemen, Argentina, Chile, Iran, Ireland, China, Siberia, DRC, Russia, Serbia and India.<\/p>\n

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Team members have worked at major miners including\u00a0Anglo American,\u00a0Rio Tinto,\u00a0Kinross, Lundin Mining, Teck Resources\u00a0and\u00a0Glencore.\u00a0 Director\u00a0Mark Cruise\u00a0has founded two highly successful juniors: zinc miner\u00a0Trevali Mining\u00a0and gold explorer\u00a0International Tower Hill Mines.\u00a0 CEO\/Director\u00a0Keith Henderson\u00a0has decades of deal making\/deal structuring and capital raising expertise.<\/p>\n

Velocity Minerals scores very high in terms of boots on the ground.\u00a0 In addition to the close working relationship with Gorubso, two of Velocity’s top five executives are Bulgarian Nationals and VP of Exploration\u00a0Stuart Mills\u00a0is working full-time in Bulgaria.<\/p>\n

Chala Gold Mine Option Agreement<\/strong><\/p>\n

Management has signed an exclusive 12-month option agreement with Gorubso to contemplate a joint venture to enhance\/expand Gorubso’s Chala gold mine and, if warranted, the CIL plant.\u00a0 That arrangement could possibly include feeding the plant with ore from one or both of Velocity’s optioned projects.\u00a0 If a win-win agreement can be reached, Velocity could effectively be in production in partnership with Gorubso) as soon as next year.<\/p>\n

Velocity is organizing and digitizing Gorubso’s 10+ years of mining data at the Chala gold mine to understand the likelihood of significantly more (tonnage and\/or higher grade) gold mineralization being identified.\u00a0 Although I hesitate to enlist the overused phrase, “blue-sky potential,” a JV with Gorubso could be a really big deal.\u00a0 It could greatly de-risk the development of Velocity’s two projects, slash upfront cap-ex requirements, facilitate\/reduce permitting costs & time lines, simplify operational flow sheet design (especially\u00a0if Gorubso’s CIL plant were to be utilized).<\/em><\/p><\/blockquote>\n

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Near-term Catalysts – Drill Results<\/strong><\/p>\n

Management is laser focused on resource drilling to produce an open-pittable resource estimate.\u00a0 Importantly, since previous resource estimates were limited by mistakes in the orientation of drilling, the final resource reported to the Bulgarian government was severely restricted,\u00a0it had no resource blocks between drill fences. \u00a0Management believes that substantial infill potential around the main deposit exists between drill fences, and mineralization remains open to the southeast and northwest.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

A total of nine diamond drill holes (approximately 2,000m) are planned for Phase I, of which the first two holes have been reported.\u00a0 The program is part of a larger campaign of up to 65 drill holes (~12,000m), planned to be ongoing through the remainder of 2017 and into early 2018.<\/p>\n

Ekuzyata Gold Project, Southeastern Bulgaria<\/strong><\/p>\n

I only briefly mention Velocity’s second project,\u00a0Ekuzyata, a 50% earn-in opportunity,\u00a0{or revert to 5% GSR}\u00a0because the main focus is Rozino.<\/p>\n

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Any discovery could be within reach of existing Chala mine infrastructure, so there would be limited need for additional capital if Gorubso and Velocity were partnered.\u00a0 Ekuzyata is located within Gorubso’s mine concession, no additional permitting would be required.<\/p>\n

CONCLUSION<\/strong><\/p>\n

Drill results in September\/October will carry a lot of weight, if they continue to be as good or better than the first two assays, the Rozino project will have (both) less risk of there being no resource, and more upside potential from near-surface, high-grade zone(s) of Au mineralization.\u00a0 The more promising Rozino becomes, the more likely Ekuzata will make sense to pursue next year.<\/p>\n

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Even better, success at Rozino should increase the likelihood of a joint venture with Gorubso, which would be a win-win for both companies and a win for local communities.<\/p>\n

To recap,\u00a0Velocity Minerals\u00a0is funded to explore an overlooked property that could be fast-tracked into development\u00a0(if warranted by further drilling),\u00a0potentially in partnership with existing producer Gorubso.\u00a0 A prospective JV could save Velocity Minerals a tremendous amount of development capital, allowing the company to minimize equity dilution.\u00a0 Currently there are 57 million shares outstanding, 66 million fully diluted, no debt or preferred shares.\u00a0 The market cap is ~CA$ 18 million. \u00a0{See\u00a0Corporate Presentation<\/a>}<\/p>\n

To the extent that permitting and other key development & construction activities could be facilitated by Gorubso’s experience and connections, that too could expedite Rozino’s and\/or Ekuzata’s path to potential production.\u00a0 Combined, Gorubso with its operating mine and CIL plant, and Velocity with Rozino, Ekuzata and its strong\u00a0geological, exploration & technical team, could become a regional powerhouse capable of accretive acquisitions of nearby mining assets.<\/p>\n

Peter Epstein’s Disclosures: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Velocity Minerals, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker\/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of Velocity Minerals are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.<\/em><\/p>\n

At the time this article was posted, Peter Epstein owned shares and\/or stock options in Velocity Minerals and the Company was an advertiser on [ER]. Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes he\u0092s diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.<\/p>\n

Want to read more Gold Report<\/i> articles like this? Sign up<\/a> for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews<\/a> page.<\/p>\n

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\n4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and\/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this interview, officers and\/or employees of Streetwise Reports LLC (including members of their household) own securities of Velocity Minerals, a company mentioned in this article.<\/p>\n

Charts and images provided by author<\/p>\n

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( Companies Mentioned: VLC:TSX.V,
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\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

By The Gold Report Source: Peter Epstein for Streetwise Reports \u00a0\u00a009\/04\/2017 Peter Epstein of Epstein Research discusses Velocity Minerals’ recent gold exploration in Bulgaria. Velocity Minerals Ltd. (VLC:TSX.V) is a gold (Au) exploration & development junior focused on eastern Europe. {Others in the region include Eldorado Gold, Nevsun, Freeport McMoRan, Rio Tinto, First Quantum, Teck, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-112272","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/112272","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=112272"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/112272\/revisions"}],"predecessor-version":[{"id":112279,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/112272\/revisions\/112279"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=112272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=112272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=112272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}