Vengold active in Km 88 program

In the Kilometre 88 region of Venezuela, a second phase of drilling is under way on the properties of Vengold (TSE).

The junior plans to focus on four targets that returned significant values in the first phase, as well as three new geochemical anomalies. One of the targets includes the Tapaya pit on the Oro Uno property, where the company announced a 200,000-oz. gold resource this summer after first-phase drilling (no tonnage nor grade has been released). That discovery proved significantly less promising than the market expected, as evidenced by the considerable drop in the issue’s share price to the recent $3 level from its high of $16.25.

Vengold acquired Oro Uno in 1993 for US$37.6 million (US$21 million in cash, US$6.7 million in assumed debt, and the balance in common shares). Drilling on the Tapaya pit will attempt to expand the gold resource. Drilling is also planned on the 2 South Zone, which surrounds a diamond drill hole that returned 61 metres grading 1.34 grams gold per tonne.

Further work is also planned on the nearby Bizkaitarra deposit, where Vengold can earn up to a 65% interest from Queenstake Resources (TSE). More than 500 auger holes on the 61 North zone outlined at least three steeply dipping, subparallel structures over a strike length greater than 500 metres. To date, 47 of the 7-metre-long auger holes returned gold values to the bottom of the hole, indicating a bedrock source. The three best intersections returned values of 26.7, 6 and 5.9 grams over their 7-metre lengths. Vengold has 22 million shares outstanding and US$11.5 million in working capital.