ValGold Resources Ltd.

ValGold Resources Ltd.

October 30, 2006 12:44 ET

ValGold and Newmont Sign Letter of Intent for 1.2 Million Acre Package of Properties in NW Guyana

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 30, 2006) - ValGold Resources Ltd. ("ValGold" or the "Company") (TSX VENTURE:VAL) is pleased to announce that it has signed a letter of intent ("LOI") to enter into an agreement with Newmont Overseas Exploration Limited, a subsidiary of Newmont Mining Corporation (TSX:NMC)(NYSE:NEM)(ASX:NEM) ("Newmont") to earn a 100% interest (subject to certain interests reserved by Newmont) in four highly prospective properties in northwest Guyana. The total size of the areas covered by the LOI is approximately 4,900 km2 or 1,213,500 acres.

The following table outlines all the areas covered by the proposed agreement:

License Type of License Number of License(s) SIZE (km2) SIZE (acres)
Five Star PGGS (1) 1 3,605 891,810
Otomung PGGS 3 1,117 276,090
Kartuni PL 3 150 38,768
Cuyani River Medium Scale 6 28 6,893
Total 4,900 1,213,561
PGGS is a "Permit for Geological and Geophysical Surveys"

The Five Star area permit is valid until late September 2007 at which time the permit may need to be reduced by covering select areas with prospecting licenses (PL's). Up to 20 PL's, each covering up to 50.6 km2 (12,500 acres), are allowed according to Government regulations. ValGold has the exclusive right to occupy and explore the three areas comprising the Otomung PGGS until at least January 2008 before it is necessary to reduce the area by way of PL's. The other license areas need not be reduced further and may be renewed as and when required.

Under the terms of the proposed agreement, ValGold's earn-in for 100% interest in the properties will require property expenditures of US$5.0 million over four years. There is a first year commitment of US$750,000 after which further expenditures are optional. Newmont will reserve back-in options by which at any time subsequent to ValGold's earn-in up and until 90 days following the delivery of a feasibility study for any PL, Newmont may acquire 75% interest in that PL by paying ValGold, in cash, an amount equal to 2.5 times ValGold's US$5.0 million earn-in cost plus the post earn-in expenditures on the PL up to the back-in exercise date. After the initial back-in option is exercised, the US$5.0 million earn-in cost will not be reimbursed. Following Newmont's election of a back-in option (whether one or more), if a party dilutes to 10% or less under a joint venture agreement, such party's interest would be converted to a 1% Net Smelter Returns royalty ("NSR") in respect of that PL. Newmont would be entitled to a 1.5% NSR in respect of any PL's for which it does not make the back-in election. The agreement will be subject to all required regulatory approvals.

The properties are located in the northern part of the Archean-Proterozoic Guiana Shield, which is mapped in Guyana as the Paleoproterozoic Barama-Mazaruni Supergroup. This granite-greenstone terrain is intercalated with Archean-Proterozoic gneisses and was intruded by felsic to ultramafic rocks during the Trans-Amazonian Orogeny. The terrain is considered to be the equivalent of the volcanic-sedimentary Birimian Supergroup in West Africa, which is host to several large gold deposits including AngloGold Ashanti's Obuasi Mine in Ghana that has annual production of approximately 400,000 ounces and a current mineral resource in the order of 24 million ounces. Major deposits found within the Guiana Shield include the Rosebel mine in Suriname, the Omai mine in Guyana and the Las Cristinas and Brisas deposits in Venezuela.

The properties are considered highly prospective for both gold and diamonds. Several gold occurrences have already been discovered on the properties including the Makapa occurrence where rock samples have returned gold values as high as 136.0 g/t. Limited drilling at the same occurrence has intersected up to 18.3 g/t gold over 2.0 metres in silicified volcaniclastic conglomerate. Large areas have also seen no work or have good gold stream silt anomalies that have not been investigated. Alluvial diamonds have been found at a number of locations yet very little exploration has been conducted for this commodity.

Stephen Wilkinson, President and CEO of ValGold commented: "We are very excited by the potential for a major discovery on the ground under option in Guyana, and we are delighted with our association with Newmont in this new venture."

Mr. Tom Pollock, P.Geo., ValGold's Vice-President, Exploration, is the Qualified Person for the project, and is responsible for all of the technical reporting in compliance with NI 43-101. Mr. Pollock has instituted and is responsible for ValGold's program of Quality Control and Assurance ("QC/QA"), using assay control samples and duplicates.

For further information on the Company and its portfolio of international projects, visit our website at

Stephen Wilkinson, President and Chief Executive Officer

SEC 12g3-2(b) exemption 82-3339

No regulatory authority has approved or disapproved the information contained in this news release.

Contact Information

  • ValGold Resources Ltd.
    Investor Relations
    (604) 687-4622 or Toll Free: 1-888 267-1400
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