October 07, 2008 14:10 ET

VenCan Gold Corporation To Acquire Hydrothermal Gold Property in Immediate Proximity to Lake Shore Gold Deposit in Timmins, Ontario

TORONTO, ONTARIO--(Marketwire - Oct. 7, 2008) - VenCan Gold ("Vencan" or the "Company") (TSX VENTURE:VCG) is pleased to announce it has entered into a Letter of Agreement with a group of land vendors ("Vendors") pursuant to which Vencan has agreed to acquire a 100% undivided right, title and interest in a new land position one (1) kilometre east of Lake Shore Gold's "Timmins West" (Holmer) Gold Deposit in the Porcupine Mining Division of Northern Ontario.

The new property, "Costello" consists of approximately 9 claim units totalling approximately 160 hectares in the Bristol Township of the Porcupine Mining Division of Northern Ontario, located approximately 18 kilometres due west of Timmins Ontario.

Kirk McKinnon, President and CEO of VenCan Gold stated, "We are very pleased to have concluded a Letter of Agreement outlining the principle terms of an agreement between VenCan and this seasoned and very knowledgeable group of local prospectors and geologists. They are very familiar with the Property and possess an in-depth understanding of the area. The current market conditions have allowed us to capitalize on this opportunity, and acquire a land position in immediate proximity to Lake Shore's Timmins West gold deposit, which is slated to open for production in 2009. This arrangement reflects VenCan's ongoing dedication to making a gold discovery in this high producing gold area."

Costello Property Situated in a Gold Mineralized Environment

The Costello Property occurs immediately to the east of Lake Shore Gold's new Timmins West (Holmer) gold deposit that is currently under active development (shaft sinking).

Hadyn Butler, P.Geo., commented, "Gold mineralization in a quartz vein is found on a single outcrop with sulphide and tourmaline mineralization similar to the discovery outcrop at Timmins West surrounded completely by swampy flat land - the clay belt remains of a late Ice Age lake bed. This former lakebed hides a number of major gold deposits in the Porcupine Gold Camp (e.g., those in Hoyle Township). Like Timmins West, the Costello Property's land position has been neglected historically and is probably similar to the mineralized system that hosts the Timmins West deposit along and beside the Bristol fault - a structure that is parallel to the Porcupine-Destor Deformation Zone - the largest of a series of parallel deformation zones that are structurally associated with gold mineralization in the Porcupine Gold Camp."

The Agreement

In order to acquire its interest in the Property from the Vendors, VenCan is required to:

i) issue to the Vendors an aggregate of 2,000,000 common shares on receiving TSX Venture Exchange and Board of Directors approval of the Option Agreement;

ii) make a cash payments to the Vendors in the amount of $50,000; and

iii) issue to the Vendors an aggregate of 1,000,000 share purchase warrants, each entitling the holder thereof to acquire one common share of Vencan at an exercise price of $0.15 per share for a period of two years from closing.

Fall Exploration Program Planned

Exploration work consisting of outcrop cleaning, geological examination (structure) and sampling, as well as a detailed ground magnetics, IP and magnetometer surveys will be conducted across the Property in early fourth quarter 2008 to define the mineralization style and drill targets. A drill program will follow immediately thereafter.

Randall Salo, P.Geo. is the Exploration Manager and is overseeing the overall exploration program on behalf of VenCan, and is the designated qualified person for the technical information contained in this press release.

WARNING: The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from expectations and projections set out herein.

SEDAR: 00004007E

Contact Information

  • VenCan Gold
    Brent Nykoliation
    Director of Business Development
    (416) 364-7024
    (416) 364-2753 (FAX)

    VenCan Gold
    J. A. Kirk McKinnon
    President and Chief Executive Officer
    (416) 364-7024
    (416) 364-2753 (FAX)

    VenCan Gold
    Richard Schler
    Vice President & CFO
    (416) 364-7024
    (416) 364-2753 (FAX)