Velocity Minerals Ltd.
TSX : VLC

Velocity Minerals Ltd.

April 13, 2010 10:15 ET

Velocity Minerals Ltd. Announces Option of Potential Banded Iron Gold Prospect

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 13, 2010) - Velocity Minerals Ltd. (TSX:VLC) is pleased to announce that it has been granted an option to acquire a gold prospect (approx. 8,803.91 hectares) in the historic Osoyoos Mining Division in south central B.C. near an area known for past gold production. Although it has received relatively little previous exploration, it is known to contain multiple gold occurrences with some grades running as high as 45 grams per tonne and has the potential to host a poly-metallic deposit. In addition, evidence suggests that one of documented mineral occurrences on the property (the Nova) is a gold-bearing banded iron formation; these deposit types have been known to reach world class dimensions. One such banded iron formation deposits is the famous Homestake mine in South Dakota which has produced over 37 million ounces of gold from a banded iron formation.

The Nova occurrence is described in MINFILE (092HSE249) as a "banded/massive, interbedded magnetite in a chert and slate sequence…. The zone of banded to massive magnetite has been delineated over 700 meters in strike and could be up to 50 meters thick in places. It's western and eastern margins seem to be bounded by block faults. Recent opinions, including those made by a government geologist, suggest that this might be a banded iron formation." "A hand trench excavated in August 1992 between two of the old workings on some rusty and sheared chert that hosts a few quartz stringers, yielded 821 ppb gold over 1.5 metres. This trench was widened in October, 1992 and seven more contiguous, 1.5 metre wide chip samples were collected. Two samples, adjacent to the one that ran 821 ppb gold, yielded 811 and 947 ppb gold, respectively."

This stratiform iron formation is further substantiated by a cluster of stratiform rhodonite occurrences, many of which have anomalous gold and silver values. The association of rhodonite with iron formations and volcanogenic massive sulfides is described in a B.C. Government geology survey entitled "Jade and Rhodonite Deposits, B.C." by George Simandl and Suzanne Paradis.

Other gold occurrences on the property include the Lost Horse (MINFILE 092HSE088) which yielded 0.535 grams per tonne Au over 0.5 meters; and the Cliff vein which yielded 45 grams per tonne in a grab sample. The Cliff Vein is from 0.25 and 0.3 metres wide and is exposed for about 10 meters in length. In 1984, the Cliff area was held by the present vendor and was examined and sampled by Teck Exploration Limited (Folk, 1984 (unpublished memorandum to W. Meyer)).

Located between Hedley and Keremeos on the west side of Highway 3, the newly optioned claims are irregular in shape, approximately 13 kilometres east-west and 10 kilometres north-south, and may be accessed from different points on Highway 3 by industrial logging roads.

The nearby Nickel Plate and Hedley Mascot mines produced 519,000 ounces of silver and 2.17 million ounces of gold between 1904 and 1996.

Management believes that the Company's exploration of the claims will be the first time that a large ground package in the area will be explored using an iron–formation-hosted stratibound gold model. It is also pleased to have a property that is amenable to year round exploration.

The option entitles the Company to acquire a 100% interest in the claims subject to a 1.5% net smelter return royalty of which two thirds, being equal to 1% of net smelter returns, may be repurchased from the optionor for $1,000,000.

To exercise the option the Company must make the following payments and shares issuances:

(i) $10,000 cash and 50,000 Shares upon receipt of regulatory of the option;

(ii) $15,000 cash and 25,000 Shares on or before the first anniversary of the option;

(iii) $15,000 cash and 25,000 Shares on or before the second anniversary of the option;

(iv) $25,000 cash and 25,000 Shares on or before the third anniversary of the option; and

(v) $35,000 cash and 25,000 Shares on or before the fourth anniversary of the option;

In addition, the Company must also spend the following amounts on property work commitments: $50,000 on or before the first anniversary of the option and $300,000 on or before the fourth anniversary of the option.

This News Release is based upon information prepared under the supervision of Garry Payie, P. Geo., a Qualified Person (as defined in NI 43-101). However, the specific data referred to herein was obtained from government files and other historical sources believed to be reliable but which have not and cannot be verified.

Velocity Minerals Ltd. is a public company dedicated to the acquisition, exploration and development of molybdenum and other mineral resources. In addition to the Company's two Cassiar, B.C. area properties, several other opportunities in the mining industry in North America and elsewhere are actively being pursued.

On behalf of the Board of Directors,

Kenneth R. Holmes, Chairman

The TSX has neither approved nor disapproved of the information contained herein.

Contact Information