Valencia Ventures Inc.

Valencia Ventures Inc.

April 04, 2007 16:58 ET

Valecia Ventures Inc.: Financial Advisor Appointed to Arrange Financing for Mt Bundy Gold Project

TORONTO, ONTARIO--(CCNMatthews - April 4, 2007) - Valencia Ventures Inc. (TSX VENTURE:VVI) has appointed Auramet Trading, LLC ("Auramet") to advise the company on its financing options and arrange financing for the Mt Bundy Project ("Mt Bundy") located in the Northern Territory, Australia.

Auramet is a leading Precious and Base Metals Trading, Metals Merchant Banking, and Finance/ M&A Advisory Firm based in Fort Lee, New Jersey that is specifically focused on the global junior and mid-tier mining industry. Auramet was established in June 2004 and during 2006 recorded trading revenues of US$1.9 billion. As to mining finance advisory mandates, Auramet has arranged in excess of $800 million in debt facilities since January 2005.

Doug Bache, President and CEO of Valencia, said "we are most pleased to have the experience and resources offered by the entire Auramet team as the company takes this important next step in the development of Mt Bundy."

In 2006, GBM Minerals Engineering Consultants Ltd (GBM) completed a feasibility study on the Mt Bundy Project which incorporates work completed by SRK Consulting on the mineral resource estimate including a NI 43-101 compliant report. The feasibility study evaluated the economic viability of the Project and identified various development options available to Valencia in order for the company to make a decision on construction of the project. This evaluation, which proceeded in two stages, is the second and follows Valencia's decision to reactivate a project at Rustlers Roost based on the past producing open pit mine and heap leach operation. The first phase formed the basis for conducting the feasibility study and involved: a) further exploration that led to the re-estimation of the mineral resources; b) re-evaluation of the ore processing options; and c) updated capital and operating costs in view of changes in the process flow sheet design.

A Hedged Gold Price Case was prepared using a gold price of US$650/oz (based on the purchase of a put option to set a minimum gold price and provide participation in the rising gold price) for the Project's projected 5-year operating period. The Project's pre-tax, undiscounted NPV for the hedged gold price case was estimated to be US$52 million with an Internal Rate of Return (IRR) of 23%.

Subsequently, Valencia identified a number of areas where improvements could be made to the Mt Bundy project and the Board of Directors approved the basis for advancing the project and obtaining financing. Auramet will assist the Company in identifying suitable financing alternatives, project capital structure, physical metal off-take and gold price hedging structures.

Mr. Alex Mitchell, C.Eng, Member Institute Materials and Mining, Principal Metallurgist, GBM Minerals Engineering Consultants Ltd was the principal author of the "Mt Bundy Gold Project Feasibility Study", a National Instrument 43-101 compliant technical report, which was filed with the TSX Venture Exchange and posted on SEDAR. Mr. Mitchell is the "Qualified Person", as defined by NI 43-101 and he has provided his consent for reference to the Feasibility Study in regard to information disclosed in this press release.

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, particularly the Cachinal Silver-Gold Project in Chile and the Rancheria Silver Project in the Yukon Territory and British Columbia, Canada. The Company recently completed a NI 43-101 compliant mineral resource estimate on its Cachinal Silver-Gold Project and plans to aggressively expand the resource in 2007. With a focus on silver and gold exploration in the Americas, the Company has a number of property acquisitions under consideration.

Shareholders are encouraged to visit Valencia's website ( to view a recent corporate presentation which provides images and more technical information on these projects.


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