VENCAN GOLD CORPORATION
TSX VENTURE : VCG

VENCAN GOLD CORPORATION

May 12, 2006 11:07 ET

Vencan Closes First Tranche of $800,000 in Financing; Airborne Survey Commences

TORONTO, ONTARIO--(CCNMatthews - May 12, 2006) - Vencan Gold Corporation (TSX:VCG) (the "Corporation") -

EXPLORATION PROGRAM - SPRING/SUMMER 2006

Kirk McKinnon, the President & Chief Executive Officer of Vencan is pleased to announce that the Spring/Summer 2006 exploration program has begun. The program will consist of an airborne survey followed by selected ground geophysical, geochemical & geological surveys to assist in identifying drill targets and 2,000 meters of drilling which is expected to begin in mid June.

In conjunction with GeoVector Management, the company's consulting geologists, an airborne geophysical survey contract, totalling at least 1,345 line kilometres, was awarded to Aeroquest Limited who began the survey on May 7, 2006. The airborne survey, which will cover all of the company's properties, will take approximately 5-7 days to complete with a preliminary report to be delivered within 2 weeks of completion of the survey.

The report will be reviewed and analyzed by GeoVector personnel who will then identify target areas, which require further ground follow up and subsequently select areas for drill testing. Contracts for awarding ground geophysical work and drilling are in the process of being reviewed and should be awarded shortly.

FINANCING

Richard Schler, the Vice-President & Chief Financial Officer of the Corporation, is pleased to announce that Vencan Gold Corporation. (the "Corporation") has closed aggregate gross proceeds of $800,000 by way of a brokered private placement. The private placement consisted of 6,000,000 "flow-through common shares" of the Corporation (the "F/T Common Shares") at a price of $0.10 per F/T Common Share and 2,000,000 units (which are non-flow-through) of the Corporation (the "Units") at a price of $0.10 per Unit. Each Unit consisted of one common share of the Corporation and one-half of one common share purchase warrant (the "Unit Warrants"). Each whole Unit Warrant will entitle the holder thereof to acquire one common share of the Corporation at a price of $0.12 for a period of 24 months from the date of issuance.

In connection with the financing the Corporation paid Dundee Securities Corporation ("Dundee") a cash fee equal to $17,500 and issued 385,000 common shares of the Corporation to Dundee. Dundee also received broker warrants exercisable to acquire 560,000 common shares of the Corporation at a price of $0.10 per common share until May 4, 2008.

The Corporation intends to use the gross proceeds from the sale of the F/T Common Shares primarily for exploration programs on its projects located in the Timmins/Gogama Region of Ontario and the proceeds from the sale of the Units for working capital and general corporate purposes. Completion of the financings remains subject to regulatory approval.

The securities issued under the financings will be subject to a four-month resale restriction in Canada.

ADMINISTRATION

The Board granted the issuance of 1,080,000 stock options to Directors, Officers and Consultants of the Corporation under the terms of an Incentive Stock Option Plan approved by shareholders at the last AGM held on January 18, 2006. The options are exercisable at $0.13 "per share" for a period of 4 years.

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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Vencan Gold Corporation
    J. A. Kirk McKinnon
    President and Chief Executive Officer
    (416) 364-7024
    (416) 364-2753 (FAX)
    or
    Vencan Gold Corporation
    Richard Schler
    Vice President & CFO
    (416) 364-7024
    (416) 364-2753 (FAX)
    vencan@vencan.com
    www.vencan.com