Valencia Ventures Inc.
TSX VENTURE : VVI

Valencia Ventures Inc.

October 16, 2006 16:05 ET

Valencia Completes RC Drill Program at Cachinal Silver Project

TORONTO, ONTARIO--(CCNMatthews - Oct. 16, 2006) - Valencia Ventures Inc. (TSX VENTURE:VVI) is pleased to report that a 40 hole, 4804m Reverse Circulation (RC) drilling program has been successfully completed at its Cachinal Silver Project in Chile (Figure 1). This program evaluated the 600m long mineralized structures in the prospective Carmen and Arturo-Prat zone to determine the potential for an open pittable resource.

Surface trench results, reported in July, confirmed silver mineralization associated with two intersecting northwesterly trending vein systems, the Carmen and Arturo-Prat Veins, indicated by Valencia's 2005 trenching and RC drilling program (See Press Release July 26, 2006). The current program of drilling was designed to evaluate the size and continuity of the zone of mineralization for mining a potential open pittable resource to 150m depth (Figure 2). Drilling was also completed to test several structures defined by VLF-EM geophysics in 2005 on the eastern side of the property and to evaluate recently outlined silver-gold soil geochemical anomalies.

Excavator trenches in 2005 exposed several encouraging mineralized zones associated with argillic altered, limonitic quartz stockworks in dacitic tuffs and volcaniclastic sediments (See Press Release April 18, 2006). Better results included T-9 - 24m @ 243.16g/t Ag, 0.06g/t Au, including 6m @ 740.66g/t Ag, 0.13g/t.

The 2006 trenching program provided infill and extensional information to the south and included several well mineralized zones within this trend (Figure 2), including:



- T-22 22m @ 121.18 g/t Ag, 0.17g/t Au
- T-26 10m @ 194.20 g/t Ag, 0.18g/t Au
- T-31 2m @ 313.00 g/t Ag, 0.64g/t Au
- T-38 21m @ 103.33 g/t Ag, 0.10g/t Au
and 12m @ 100.83 g/t Ag, 0.07g/t Au
- TRS-2 2m @ 1030 g/t Ag, 0.58g/t Au
- TRS-4 2m @ 544 g/t Ag, 0.29g/t Au
- TRS-6 9.5m @ 288.26 g/t Ag, 0.17g/t Au


Valencia's 16 hole, 2,294m RC drill program in 2005 encountered several high grade silver intersections, including 14m @ 114.57g/t Ag (3.68 oz/t silver) in CLRC-01, 21m @ 189.29g/t Ag (6.09 oz/t silver) in CLRC-02 and 40m @ 137.87g/t Ag (4.43 oz/t silver) in CLRC-12, including 18m @ 231.38 g/t Ag and including 5m @ 670.00 g/t Ag and 0.689g/t Au, at approximately 95m below surface, in the hanging wall of the Carmen Vein (Press Releases April 29 and June 8, 2005).

The wide zones of silver mineralization intersected in the initial drill program in both the hanging wall and footwall adjacent to historically mined narrow high grade silver veins over a 600m long zone demonstrated potential may exist for a bulk mineable silver deposit.

Valencia's 2006 exploration program at Cachinal has comprised approximately 1,500m of trenching and 4,800m of Reverse Circulation (RC) drilling. Fences of RC drill holes were located at approximately 50m spacing with holes planned to target the mineralized system at vertical depths of 40m and 80m (Figure 2). The program was expanded from an original budget of 4,000 to include several deeper holes (110-125m vertical) to test beneath zones of visually encouraging mineralization.

Results of the drilling are expected before the end of October, at which time the location of 500-1,000m of diamond drilling will be determined. This additional drilling will twin RC drill intersections for verification of RC results, to provide information on rock density, to provide core for initial metallurgical testwork and, to evaluate the deeper potential of the mineralized system.

Valencia's Executive Vice-President Exploration & Development, Doug Currie, who was recently in Chile to supervise the drill program commented: "I was very encouraged by the results of the 2006 trenching program, which demonstrated good continuity of wide zones of high grade silver mineralization over more than 600m along strike. We have intersected the mineralized structure where expected in our recent RC drilling and await availability of the assay results which hopefully, if results continue to be positive, will allow an initial openpit-mineable resource to be defined in the Arturo Prat-Carmen area".

Arrangements are being made to complete an initial NI43-101 Technical Report, including a resource estimation, upon receipt of the RC drill assay results and completion of the diamond drilling.

Cachinal Silver Project

Historically a significant silver district, the Cachinal de la Sierra area is located within the Paleocene Gold Belt of northern Chile which hosts several significant gold and silver deposits, including Meridian Gold Inc's El Penon Silver-Gold Mine, a low sulphidation-style epithermal silver-gold deposit and one of the worlds lowest cost gold producers, 60km to the northeast, and Diamond Rose NL's Guanaco Gold Mine, a high sulphidation-style epithermal deposit which was mined as a heap leach operation during the early 1990's by Amax Gold Inc and later Kinross Gold Corporation, 12km to the southwest.

Silver mining began at Cachinal in 1862 and, including production of approximately 170,000 tons @ 280g/t Ag, 0.58g/t Au reported for a three year period 1985-1987, historical production is estimated at approximately 32 million ounces of silver in historical geological reports in the library and files of Chilean Government agency SERNAGEOMIN. Extensive historic workings at Cachinal reportedly extend to a depth of 320m although most of the workings only went to a depth of 120-150m, generally within the oxidized zone. Historical grades apparently averaged 500-600g/t silver with an unknown quantity of trace gold, with some local values of up to 2500g/t silver and as much as 3g/t gold reported. The production figures (tonnage and grade) referred to in the preceding sentences are historical in nature, have not been verified by the issuer's Qualified Person, and should not be relied upon.

Valencia assembled a large land position totalling 9,200 hectares at Cachinal late in 2004, entering into farm-in agreements with Compania Contractual Minera Ojos del Salado, an indirect Chilean subsidiary of Phelps Dodge Corporation (NYSE:PD), Silver Standard Resources Inc (NASDAQ:SSRI)(TSX:SSO) and Atna Resources Ltd (TSX:ATN) to acquire interests in their properties which cover the historic mining center. (See Press Releases dated October 12, 2004 and February 3, 2005 for terms of each farm-in arrangement, Figure 1). Valencia has also acquired direct interest in additional areas adjoining the JV areas.

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

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 precious metal properties, particularly the Cachinal Silver Project in Chile and the Rancheria Silver Project in the Yukon Territory and British Columbia, Canada. The company has recently completed a feasibility study for the Mt. Bundy Gold Project in the Northern Territory, Australia, and is considering various development strategies. With a focus on silver, the company has a number of precious metal acquisitions under consideration.

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.

All analytical work has been completed by ALS Chemex of North Vancouver, BC, Canada; ALS Chemex is a respected international analytical service which is accredited with NATA and complies with standards of ISO 9001:2000 and ISO 17025:1999. They employ a variety of international standards for quality control purposes.

Samples are transported from the field project to the ALS Chemex sample preparation facility in Coquimbo, Chile by the Contractor's personnel or a reputable commercial carrier. All analytical testing is performed utilizing a variety of industry standard analytical techniques, including: (i) ALS Analytical Code ME-MS41 - 50 element analysis using aquaregia digest and ICPAES analysis, (ii) ALS Analytical Code AA46 & AA62 - specific element analysis using aquaregia digest and AAS determination (Ag, Zn, Pb, Cu, As) and, (iii) Analytical Code Au-AA26 - Gold using a 50g Fire Assay-AAS finish.

All Reverse Circulation drill samples were geologically logged and sampled by the Contractor's geologists in one(1) meter sample intervals; the archive portion of the sample is securely stored at the Contractor's facility in La Serena, Chile. The Company has initiated a QA/QC program consisting of utilizing standards, duplicate and blank samples and laboratory cross-checks and routinely repeats sample analysis.

Trench samples are chip-channel samples taken over a 5-10cm wide channel cut in the bottom of an excavated trench. Sample intervals are normally 2m composites in zones of alteration or mineralization and less than 2m composites through well defined vein or veinlets zones.

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements".

NOTE:

To view Figure 1 please visit the following link - http://www.ccnmatthews.com/docs/vvi11016.pdf

To view Figure 2 please visit the following link - http://www.ccnmatthews.com/docs/vvi21016.pdf

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Valencia Ventures Inc.
    Doug Bache
    President and CEO
    (416) 861-5884
    or
    Valencia Ventures Inc.
    Doug Currie
    Executive Vice-President, Exploration and Development
    (416) 861-5898
    or
    Valencia Ventures Inc.
    David Meyer
    Vice-President, Business Development
    (416) 861-5891
    Email: info@valenciaventures.com
    Website: www.valenciaventures.com