Velocity Minerals Ltd.

Velocity Minerals Ltd.

February 29, 2012 07:00 ET

Velocity Minerals Ltd.: Large New Gold Zone Revealed at Orogrande by Recent Geochemical Survey Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 29, 2012) - Velocity Minerals Ltd. (TSX:VLC) is pleased to announce further results of the continuing geochemical soil survey on the two claim blocks it holds in the Orogrande mining district in Idaho County, Idaho. The claims are comprised of two separate blocks each consisting of approximately 100 claims and covering an area of approximately 2,000 acres. The northern block is adjacent to and south of Premium Exploration Inc.'s Friday-Petsite project in the historic Orogrande Mining Division in central Idaho. The field crew has now collected over 1,900 soil samples from a 80 km grid.

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The ongoing geochemical survey shows a new large gold anomaly situated on the Northern claim block referred to as the Summit anomaly in addition to the already announced Friday Fault-Badger shaft anomaly and the Monday fault structure anomaly. (See Release dated September 14, 2011).


Results and interpretations from this ongoing geochemical survey, which now covers approximately 80% of the Northern claim area, have been used to target two different potentially gold bearing structures in the upcoming drill program. The first phase of the drilling program will target the Friday Fault-Badger shaft and the Summit anomalies. The Company plans to drill from third party patented claims (see Release dated July 18, 2011) targeting the large quartz vein system that was discovered and trenched by historical miners. This initial drilling program will attempt to test, delineate, and quantify a historically reported swarm of 5 parallel quartz veins. Development of one of these veins, the Penman vein, consisted of 4 levels and 1,700 feet of underground workings.

The Friday Fault-Badger shaft anomaly is the longest anomaly located on the property. This northwest to southeast trending zone has been extended from 700 meters in length (see Release dated February 8, 2011) to 2,000 meters in length and remains up to 500 meters wide. It runs near the center of the claim block and aligns with the inferred extension of the Friday fault. Two and half kilometers north of Velocity's claims, the Friday fault has been identified and drilled tested by Premium Exploration Inc. and is a known gold bearing fault with a current resource of approximately 1.2 million ounces of gold. An airborne geophysical survey shows the fault continuing southwards through Premium's and Velocity's claim blocks. The initial drilling program on the Friday Fault-Badger gold anomaly will target the parallel quartz veins situated north of the historic Penman mine vein.

The Summit anomaly is a newly identified zone located between an inferred fault splay off the Friday Fault and is coincident with a long triangular shaped, 1,000 x 500 metre, greater than 10ppb gold in soil anomaly that extends over a 300 metre vertical elevation range. Individual soil samples within the Summit Prospect have returned assays of up to 439 ppb gold or (0.439 g/tonne gold by Aqua regia digestion).

The Monday Fault Structure anomaly lies in a north-south direction and is 1,600 meters in length and 300 meters at its widest dimension. This anomaly is situated in the same direction and orientation as the Monday fault, one of the western most mineralized structures targeted by Premium Exploration Inc. on its property immediately to the north of the Company's Northern claim block.

History of the Homestake Orogrande Property

The Homestake Mine (historical mine site is covered by Velocity's claims) was located in the 1890s by Sam Silverman. Silverman sunk the Badger shaft to a depth of 170 feet in 1898 and produced a few hundred tons of ore. However, the ore did not yield enough gold to pay expenses and the property was dropped. In 1905 James Penman relocated the Badger mine and later sold the mine to the Homestake Gold Mining Company. Little work was done on the property until 1931 when a contract was let for driving a long tunnel. The Penman mine eventually had 4 tunnels employing thirty men in 1940 and an additional 7 men worked in the mill. Mine production peaked at 8,255 tons of ore yielding 1,925 ounces of gold and 1,843 ounces of silver. The mine was closed in 1942 for the duration of World War II by War Production Board Limitation Order L-208. Penman Mines forfeited its corporate charter in 1942.

In the six districts north of the Salmon River near Elk City the combined production from placer and lode mines totaled roughly 3,000,000 oz of gold before 1932 (Shenon and Reed, 1934). The ground covered by the claims has received relatively little recent exploration. The district, however, is known to contain multiple gold occurrences and the Penman mine reportedly had a grade of 10.3 grams/tonne to 27.0 grams/tonne (0.3 to 0.8 ounces per ton) with some grades running much higher (The August 14, 1934 Spokane Chronicle reported a high grade assay of 22 ounces of gold).

Velocity's claims completely surround two third party owned patented claims covering approximately 40 acres that contain the mill site ruins and three adits from the Penman Mine.

The information that forms the basis of this News Release has been prepared under the supervision of David S. Boyer, MSc., CPG, an independent professional geologist engaged by the Company and a Qualified Person (as defined in NI 43-101). However, some of the data referred to herein was obtained from government files, other historical sources and third party news releases, all of which are believed to be reliable but which have not and cannot be verified.

Velocity Minerals Ltd. is a public company dedicated to the acquisition, exploration and development of gold, molybdenum and other mineral resources. In addition to the Company's two Cassiar, B.C. area properties and its Idaho gold claims, several other opportunities in the mining industry in North America and elsewhere are actively being pursued.

On behalf of the Board of Directors,

Kenneth R. Holmes, Chairman

Forward-Looking Information

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or by words indicating that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

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