Valencia Ventures Inc.
TSX VENTURE : VVI

Valencia Ventures Inc.

August 09, 2006 16:05 ET

Valencia Signs Letter of Intent to Acquire 100% of Chanarcillo Silver Property, Chile

TORONTO, ONTARIO--(CCNMatthews - Aug. 9, 2006) - Valencia Ventures Inc. (TSX VENTURE:VVI) is pleased to announce it has signed a Letter of Intent to acquire a 100% interest in the Chanarcillo bonanza-style silver property surrounding the Chanarcillo mine located in northern Chile from Compania Minera Calcia Ltda. ("Calcia").

Chanarcillo, one of Chile's most important "epithermal bonanza-style" silver mines, is located some 750 km north of Santiago and 60 km south of the silver-gold mining centre of Copiapo cents in the Atacama region of northern Chile. Discovered in 1832, over 100 million ounces of silver was mined at Chanarcillo over 70 years. During one year, 13 million ounces were produced using hand-mining methods with the ore extracted from two principal veins, the Descubridora and the Colorada.

Access to the site is via the Pan American highway, then a 40-minute drive from Copiapo cents along good roads to the concession area. The Chanarcillo property is accessible and workable year-round at an altitude of 800-1,200 metres above sea level.

Calcia's mining and exploration concessions extend approximately 8 km N-S by 5 km E-W, covering an area of over 35 sq km, date from 1992 and completely surround the Chanarcillo mine concessions, which cover about 1 sq km. Calcia's ground is adjacent to concessions belonging to Phelps Dodge, Codelco and Nittetsu.

The geology comprises a mix of volcanic rocks (andesites), with sediments, mostly limestone (in places altered to skarns), intruded by a batholithic-sized granodiorite mass along the western edge of the concessions, all of lower Cretaceous age. Silver appears to be concentrated in veins or mantos (sub-horizontal accumulations beneath impervious volcanic rock layers).

Limestone terrain on the east side of the concession area also has anomalous silver values, close to the old bonanza mine site, where vein and manto deposits may still exist and need to be tested below the sediment-covered slopes and valley floors.

The property has previously been explored by Aur Resources, WMC Resources and Atna Resources, principally for IOGC (Iron Ore Copper Gold) style copper deposits, generally ignoring the potential for silver mineralization. An exploratory program in 1991, on part of the concession area, by Western Mining discovered highly anomalous values of zinc and iron. Additionally, a 2006 report by Aur Resources also confirms the geochemically anomalous ground within the concession area, discovering molybdenum values which conform to a porphyry-copper "signature".

Several major mining companies are presently exploring the district for copper, given the close proximity to the Phelps Dodge Candelaria copper mine (350 MT @ 1.1% Cu and 0.26g/t Au) located 35 km to the north, and along strike from the Chanarcillo property. There are strong geological similarities between the two mining districts.

Valencia's Option with Calcia to Acquire a 100% in the Chanarcillo Property

A letter of intent between the parties, signed on July 31, 2006, provides Valencia with a 45-day due diligence period, including site visits on Calcia's concessions. If Valencia agrees to proceed with further evaluation and exploration of the Chanarcillo property, the company is required to pay Calcia US$85,000 by March 15, 2007 and US$100,000 prior to September 15, 2007 to purchase 100% of the concessions. Valencia's on-going obligations to maintain the agreement with Calcia in good standing include a payment of US$100,000 per annum until production, when a 2% NSR takes effect, with Valencia having an option to purchase 100% of the NSR for US$3 million.

The Chanarcillo property is approximately 250km south of Valencia's Cachinal Silver Project where a 4,000m RC drilling program has recently commenced to evaluate a 600m long zone of high grade silver mineralization defined by historical workings, recent trench samples and limited drilling in 2005 (See Press Release dated 26 July, 2006).

Valencia's Vice President, Exploration & Development, Doug Currie commented, "Valencia has been reviewing a number of potential silver opportunities in major mining districts in Chile, adding the Chanarcillo property may hold the potential for discovery of a significant new silver resource and will compliment our existing development activity at Cachinal."

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 silver and gold 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 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.

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
    (613) 259-3110
    or
    Valencia Ventures Inc.
    David Meyer
    Vice-President, Business Development
    (416) 861-5891
    info@valenciaventures.com
    www.valenciaventures.com