VG Gold Enters Into Option and Joint Venture Agreement with Goldcorp
Timmins, Ontario
Toronto, Ontario CANADA, June 17, 2008 /FSC/ - VG Gold Corp. (VG -
TSX, VN3 - FWB), ("VG Gold"), announces that it has entered into an
agreement, effective June 13, 2008, to earn a 60 percent interest in
select claims of the Paymaster Property situated on the east boundary
of both VG Gold's Buffalo Ankerite Property and Fuller Property. Also
included is one Aunor Mine Claim situated on the west side of the
Buffalo Ankerite Property. Under the terms of the agreement VG Gold
has the option to earn a 60 percent interest in 16 claims by incurring
exploration expenditures of $6 million over 4 years, subject to a
Back-in-Right. Fourteen claims are in Deloro Township with thirteen
on the east side of the Buffalo Ankerite Property, and the Aunor claim
on the west side. Two more Paymaster claims are optioned to the 4,075
level in the adjacent Paymaster Mine in Tisdale Township and are
adjacent to the east side the Fuller Property. VG Gold also acquired a
100 percent interest in 4 claims in Tisdale Township on the west side
of the Fuller Property in exchange for the surface rights to 5 claims
on the northern part of the Fuller Property.
Under the terms of the Option and Joint Venture Agreement, VG Gold can
exercise its option and enter into a 60/40 Joint Venture agreement
with Goldcorp once it has completed the $6 million work program and
made the payments of cash, shares and warrants specified below. Upon
VG Gold exercising its option to form the joint venture, Goldcorp has
a 6 month period where it can exercise the Back-in Right to increase
its interest from 40 percent to 70 percent, and become the operator,
by making a payment of $710,000 to VG Gold, incurring exploration and
development expenditures of $8,250,000 on the property within two
years of the Back-in Right notice and completion of a feasibility
study within three years.
The terms of the agreement provide that VG Gold spend $800,000 in the
first year of the agreement, $1.1 million in year two, $1.6 million in
year three and $2.5 million in year four, for a total of $6 million
over 4 years. The first year work program of $800,000 is a work
commitment on the Goldcorp property. VG Gold is required to pay
$40,000 on signing and $50,000 at the end of the first year. The
company will also issue 340,000 shares on signing and 1 million
warrants expiring on June 13, 2010 with an exercise price of $0.309
per share. VG Gold will also issue shares with a value of $100,000 on
the first and second anniversaries, $150,000 on the third anniversary
and $200,000 on the fourth anniversary of the agreement.
This agreement provides VG Gold the opportunity to expand the known
gold mineralized zones that trend from VG Gold's property onto
Goldcorp's properties. The South Mine gold zones trend east toward the
Paymaster No 4 Shaft. To the west the South Mine zones trend toward
the Aunor Mine property. The Buffalo Ankerite North Mine zones trend
north-east towards the Paymaster No 2 and No 3 mine shafts. The Fuller
Deposit zones trend east towards the Paymaster 36 and 37 zones that
were mined from the Paymaster No 5 Shaft.
The Company currently has two drills operating delineating the steeply
dipping gold mineralization in the South Mine area. VG Gold plans to
move one drill across the property line and drill the extension of the
Buffalo Ankerite South Mine pit zones where they trend east on to
Goldcorp's Paymaster Mine property with an initial 2,000 metre program
of 10 holes. The plan is then to move the drill north 500 metres to
follow the Buffalo Ankerite North Mine zones where they trend
north-east onto the Paymaster Property with a further 2,500 metre
drill program. VG Gold also plans to move the second drill across the
west property line to follow the South Mine mineralization to the west
onto the Aunor Mine Property. The company also has future plans to
drill the extension of the Fuller Deposit zones to the east where they
are known to plunge on to the Paymaster Property.
The Buffalo Ankerite Property saw historical production of 1,018,000
gold ounces, the Paymaster Mine produced 1,190,200 ounces and the
Aunor Mine produced 2,496,010 ounces (Ontario Ministry of Northern
Development and Mines). VG Gold believes all three properties hold
significant exploration potential for additional gold mineralization
and plans exploration work to expand gold mineral inventory in the
area of known gold zones.
To view a map of the Buffalo Ankerite Property, please click on the
link provided: www.usetdas.com/maps/vggold/buffaloankeriteproperty.pdf
Exploration work is being conducted under the supervision of Kenneth
Guy, P. Geo., designated Qualified Person for VG Gold, who has
reviewed the this press release.
Statements in this release that are forward-looking reflect the
Company's current views and expectations with respect to its
performance, business, and future events. Such statements are subject
to various risks and assumptions, some, but not necessarily all, are
disclosed elsewhere in the Company's periodic filings with Canadian
securities regulators. Such statements and information contained
herein represent management's best judgment as of the date hereof
based on the information currently available; however actual results
and events may vary significantly. The Company does not assume the
obligation to update any forward-looking statement.
This News Release is not for dissemination in the United States or to
any United States news services
Shares: 86,616,014
For further information, contact:
Tom Meredith
President
VG Gold Corp.
(416) 368-0099
To learn more about VG Gold (TSX: VG), visit our website: www.vggoldcorp.com
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