Verena eyes Russian gold (August 19, 2002)

Toronto-based Verena Minerals (YVM-V) will acquire a 60% interest in the Bamsky and Vladimirsky gold deposits in Russia from a group of vendors including Nordic Resource Group, Apsakan, Tokuringra Joint Stock Co., Techno Servece, and Riefey.

Verena will initially issue the vendors 5 million shares. Another 15 million shares will come on the heels of a positive feasibility study. The company has also committed to raising the cash required to complete a feasibility study and bring the Bamsky deposit into production.

Once a positive feasibility study has been turned in, Verena can boost its stake in Bamsky to 76% and acquire Vladimirsky outright.

The Bamsky deposit is in the northern Tyndinsky district of Amur province, in Siberia, and is 220 km by road from the city of Tynda. The deposit is covered by a renewable, 25-year exploitation licence that expires in 2017.

The property has been tested by 328 diamond drill holes for more than 60,000 metres, as well as 42,000 metres of trenching and 7,000 channel samples. Significant widths of mineralization have been reported in more than 90% of all holes and trenches.

Apsakan, Verena’s local partner, currently has an open-pit operation running on the N2 orebody. On-site facilities include haulage and access roads, primary and secondary crushers, a heap area, a pregnant solution pond, and a tailings dam.

The crushing facilities are rated at 3,000 tonnes per day, and a 150,000-tonne-per-year mill is about 80% complete.

The operation is targeting gold mineralization in a ring-like structure in early-Proterozoic biotite granites measuring 3 km in diameter.

Apsakan pegs Bamsky’s indicated resource (C1 reserves under Russian guidelines) at 4 million tonnes grading 3.92 grams gold and 12.7 grams silver per tonne, based on a cutoff grade of 0.6 gram gold. Another 8 million tonnes running 4.14 grams gold and 11.9 grams silver are classified as inferred resources (C2 reserves).

The Bamsky permit also covers two satellite deposits: Silvercreek, 8 km to the southwest, and Des, 6 km southeast of the main Bamsky deposit.

Metallurgical tests on bulk samples of Bamsky material returned gold recovery rates of 60% via gravitation and cyanidation.

Verena and Apsakan figure it will take about US$6 million to bring the Bamsky deposit to an annual production rate of 90,000 oz. gold. That figure includes working capital and debt repayment. The two plan to repay a portion of an outstanding, US$12.8-million loan from the Savings Bank of Russia.

The Vladimirsky deposit, 6 km from High River Gold‘s (HRG-T) Zun-Holba gold mines, in the Buryatia region, is less developed than Bamsky.

Initial drilling has cut four mineralized veins 50 and 100 metres below surface. The veins average 1.5-2 metres in true thickness and grade up to 31.5 grams gold and 17.1 grams silver per tonne. Seven other vertical and parallel quartz veins that stretch up to 4 km in length will be subjected to follow-up drilling.

Verena has more than 32.5 million issued and outstanding shares.