Valencia Ventures Inc.

Valencia Ventures Inc.

November 01, 2007 09:12 ET

Valencia to Acquire an 80% Interest in Silver Standard's Nuevo Juncal Silver Property

TORONTO, ONTARIO--(Marketwire - Nov. 1, 2007) - Valencia Ventures Inc. ("Valencia")(TSX VENTURE:VVI) is pleased to announce that it has entered into an agreement with Silver Standard Resources Inc ("Silver Standard")(TSX:SSO)(NASDAQ:SSRI) to acquire an 80% interest in the Nuevo Juncal Silver property. The Nuevo Juncal property is located approximately 125 km southeast of Valencia's Cachinal Silver Project in northern Chile. Valencia has focused its corporate development effort in the region surrounding the Cachinal project to utilize its local expertise and knowledge to build on the resource the Company is establishing at Cachinal.

Historically a polymetallic silver-lead-zinc mine, Nuevo Juncal is located at an elevation of 2,800-3,000 metres, approximately 450 km southeast of Antofagasta within the Porphyry Copper Belt of northern Chile. This Upper Eocene to Lower Oligocene belt of rocks which runs the length of the Chilean Cordillera is the host to the large Escondida Porphyry Copper deposit to the north and the El Salvador and El Hueso deposits to the south (Figure 1). The property lies immediately to the west of the north-south trending Domeyko Fault System which controls the emplacement of many of these major porphyry copper deposits.

Doug Currie, Valencia's Executive Vice President Exploration, who visited the property and obtained the samples referred to below, commented, "After looking at a number of opportunities in the vicinity of Cachinal, I am very excited with the option to acquire, and the potential Nuevo Juncal property holds. Nuevo Juncal was the site of a major mine and Valencia believes that historically it produced significant high grade silver and there are indications of high lead and zinc values as well. The past mine workings do not appear to have been very deep; we expect to be exploring both the open pit and deeper vein potential."

Valencia plans to commence detailed surface and, wherever possible, underground mapping and sampling and trenching in January 2008 when staff from Cachinal will be available, with a view to identifying initial targets at Juncal for drilling late in the first quarter of 2008. If the first program is successful, follow-up drilling would continue throughout 2008, with the goal being to establish the first mineral resource estimate before the end of 2008.

Doug Bache, Valencia's President & CEO, commented, "The opportunity to acquire Juncal within the regional focus we have established in the vicinity of our Cachinal Silver Project and the mineralization potential it holds will be a great addition to our portfolio." He added, "We are also delighted to once again have an opportunity to form an alliance with Silver Standard that will permit us to effectively advance Juncal and benefit both companies."

Similar to Cachinal, the Nuevo Juncal property contains historical underground mine workings centered on two main east-west trending mineralized structures, which extend for over 2500m along strike. Complete details of historical production are not known. However, in a 1976 report, the Chilean government agency IIG (Instituto De Investigaciones Geologicas) reported silver grades as high as 600g/t silver from richer zones within a mineralized envelope averaging greater than 300g/t silver. An isolated period production report contained in historical ENAMI (La Empressa Nacional de Mineria) production records reports the mine delivered 5667tonnes grading 259g/t silver in 1979 to an Enami treatment plant in the nearby coastal town of Taltal. The IIG report also reports there were 24 shafts, mostly to depths of 25-30m, but with two, El Pichonera and Pique L, to depths of 80-90m within oxidized host rock.

Historical information, included in a 1981 geological report completed for Compania Minera Baritex who owned the property for a period of time in the 1980s and 1990s and are believed to have done additional mining, describes the mineralized quartz veins as 0.5-1.5m thick, subvertical to 65-80 degrees N dipping, in a 3-5m wide limonitic alteration zone within hydrothermally altered andesite and basalt. Oxidation extends to at least 100m depth. This report also refers to high lead (up to 7.4% lead) and zinc (between 10 - 18% zinc) values.

Silver Standard completed preliminary geological mapping and surface sampling in 2002. The results were encouraging, including 56 samples from the South Vein which averaged 137g/t silver over a strike length of 2200m; 51 samples taken on the easternmost 200m of this structure also averaged 2.00% lead and one sample contained 1.6% zinc. Silver values from samples along the North Vein were more sporadic; however, a 300m zone averaged 272g/t silver and 2.6% lead.

The information referred to in the three paragraphs above is historical in nature, has not been verified by Valencia's Qualified Person and should not be relied upon.

Under terms of the agreement with Silver Standard, Valencia has the right to earn an 80% interest in the Nuevo Juncal property, which consists of seven Exploitation Concessions totalling 2100ha, by spending an aggregate of US$1,000,000 on exploration and producing a NI43-101 report, which includes a mineral resource estimation, within four years, with a minimum expenditure of CDN$200,000 in the first twelve months. A 2% royalty, to a maximum of US$200,000 on the first US$10.0million expenditures, is payable to MinQuest of Spokane, Washington.

If the mineral resource is greater than 60 million ounces of silver equivalent (silver + gold), Silver Standard retain a "claw-back" right to earn back a 31% interest for a total equity interest of 51% by contributing US$3,000,000 within three years of exercising the "claw-back" right. A standard dilution clause provides that any party's interest falling below 10% will be converted to a 1.0% NSR, with payments capped at US$1,500,000.

Valencia and Silver Standard have signed a Heads of Agreement incorporating terms of an agreement. Valencia has completed its due diligence and a formal agreement which is subject to the approval of the Board of Directors of both companies is in preparation.

Valencia has completed several days reconnaissance of the property and identified an area between two major structures with significant alteration which appears prospective for delineation of near surface open pitable resources. Several boulder-sized pieces of mineralized rock from historical mining activity, discarded near the adits on the eastern end of the vein system, contain significant quantities of visible galena (lead) and sphalerite (zinc). One sample taken by Valencia contained 340g/t silver, 28.7% zinc and 12.25% lead (Table 1).

Although this single sample is not a reliable estimate of the average or overall grade of mineralization, it does confirm the presence of high grade silver, lead and zinc as indicated in historical results, referred to above. Additional samples have been taken across the property and results are still pending.

Valencia also continues to advance the evaluation of its Cachinal Silver Project. The current phase of drilling, which commenced late September, will consist of additional RC drill holes along the existing 50m spaced section lines and, where necessary, 25m infill drilling within the Cachinal resource area and the Northern Extension target to define potential resource areas in sufficient detail to enable a revised mineral resource estimation. The total program will comprise between approximately 7,000 and 9,000m of resource definition drilling and approximately 1,500m to evaluate other regional targets. Additional diamond drilling is also planned to verify RC drill results, geotechnical information and samples for metallurgical testwork.

Valencia recently announced the appointment of SRK Consulting (Canada) Inc. ("SRK") to prepare an updated mineral resource model and preliminary assessment of the economic potential of a future mining operation at Cachinal (See press release dated , September 18, 2007). A team from SRK's Toronto and Santiago offices recently visited Cachinal and studies required to assist with the resource estimation and preliminary economic assessment and subsequent feasibility analysis have commenced.

Valencia is a Canadian resource company traded under the symbol VVI on the TSX Venture Exchange. Valencia's development strategy is focused on the exploration and development of silver and gold properties, including the Cachinal Silver-Gold Project in Chile and the Rancheria Silver Project in the Yukon Territory and British Columbia, Canada. With a focus on silver and gold exploration in the Americas, the Company continues to evaluate other opportunities to expand its portfolio of quality silver projects.

Regulatory Footnotes:

Mr. Douglas A. Currie, MAusIMM, Valencia's Executive Vice President-Exploration & Development, is the Qualified Person as defined under National Instrument 43-101 responsible for the scientific and technical work on the exploration program and is responsible for reviewing the technical disclosure in this press release. Field work in Chile has been performed under Mr Currie's supervision by SBX Consultores Ltda, Santiago, Chile.

This press release contains "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information includes, but is not limited to, statements regarding exploration prospects, the identification of mineral resources, costs of and capital for exploration projects, exploration expenditures and timing of future exploration and the costs and timing of additional exploration activities on the property. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters, future prices of mineral prices; and risks of the mining industry. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.




(Sample 6408 - Discarded Historical Mine "Ore" Sample)

Silver (g/t Ag) 340
Gold (g/t Au) 0.423
Zinc (% Zn) 28.7
Lead (% Pb) 12.25
Copper (% Cu) 0.24

NB: The results of this single sample, although indicative of potential mineralization to be located within the property, may not accurately reflect the overall grade of any future mineral deposit identified.

To view the Valencia Ventures Inc. map (Juncal, Chile), please visit the following link:


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