April 06, 2006 09:00 ET

Vencan Gold Signs Agreement with Patricia Mining Corp. on Historic Wawa Gold Property and Announces $1,025,000 in Private Placement Financings

TORONTO, ONTARIO--(CCNMatthews - April 6, 2006) - Vencan Gold Corporation (TSX VENTURE:VCG) (the "Corporation") -


Vencan Gold Corporation (Vencan) is pleased to announce that the Corporation has signed a letter of agreement with Patricia Mining Corp. (Patricia). The agreement gives Patricia the right to acquire a 75% interest in the Corporations Edwards gold property adjoining Patricia's Island Gold Project and 100% of the Corporations 3% NSR it holds on the past producing Edwards Mine currently owned by Strike Minerals Inc.

The Corporations Edwards property consists of 39 staked and 4 patented mining claims in Jacobson Township covering an area of approximately 1,720 acres. The claims are to the east and contiguous with Patricia's Island Gold Project.

Patricia will earn a 75% interest in the property from Vencan by making a cash payment of $30,000 on or before April 7th, 2006 and issuing 500,000 common shares on or before April 30th 2006. Patricia has the option to acquire Vencan's remaining 25% interest for the first 30 months after the agreement date by issuing 1,000,000 common shares and at any time after 30 months by issuing 1,500,000 common shares to Vencan. Vencan has retained a 2% NSR on the property which may be purchased for $1,500,000. Vencan's 25% interest will be carried for the first one million ($1,000,000) in exploration expenditures or 2 years whichever occurs first. The share issuances are subject to approval by the TSX Venture Exchange.

Kirk McKinnon, President and Chief Executive Officer of the Corporation stated, "We believe this strategic acquisition by Patricia will further contribute to the substantial upside potential of their Island Gold Project and thus add significant value for our shareholders. The Island Gold Project is a joint venture between Richmont Mines Inc. and Patricia and is currently in the final stages of development with production scheduled to commence in July 2006. Patricia has a proven track record of success and given their infrastructure in the Region, they will move forward with an exploration program in a manner that will maximize shareholder value for both Corporations. Vencan is very pleased to have completed this transaction with Patricia and look forward to working with them towards achieving a successful result".


Richard Schler, the Vice-President & Chief Financial Officer of the Corporation, is pleased to announce that the Corporation intends to raise aggregate gross proceeds of up to $800,000 by way of a brokered private placement (the "Offering"). The Offering will consist of (i) the offering of up to 6,000,000 "flow-through" common shares of the Corporation (the "F/T Common Shares") on a best efforts basis at a price of $0.10 per F/T Common Share and (ii) the offering of up to 2,000,000 units (which are non-flow-through) of the Corporation (the "Units") on a best efforts basis at a price of $0.10 per Unit. Each Unit will consist of one common share of the Corporation and one-half of one common share purchase warrant (the "Unit Warrants"). Each whole Unit Warrant will entitle the holder thereof to acquire one common share of the Corporation at a price of $0.12 for a period of 24 months from date of issuance.

Dundee Securities Corporation ("Dundee") has agreed to act as the agent of the Corporation in connection with the Offering, pursuant to which Dundee will be paid a cash fee equal to 7% of the gross proceeds raised in the Offering (the "Commission"), such fee to be payable in common shares of the Corporation (the "Fee Shares") at an effective price of $0.10 per Fee Share. In addition, Dundee will receive a broker warrant (the "Broker Warrant") exercisable to acquire common shares of the Corporation (the "Broker Shares") equal in number to 7% of the aggregate number of F/T Common Shares and Units sold under the Offering at a price of $0.10 per Broker Share for a period of 24 months after the date of the closing of the Offering. Dundee may, at its discretion, elect to receive the Commission in the form of cash rather than Fee Shares.

In addition, the Corporation will be completing a non-brokered private placement for gross proceeds of up to $225,000, the terms of which are consistent with those of the offering of the Units described above. In connection with such private placement, the Corporation may pay a finders fee equal to 9% of the aggregate gross proceeds raised.

The Corporation intends to use the gross proceeds from the sale of the Flow-Through Common Shares for exploration programs on its projects located in the Timmins region of Ontario and the proceeds from the sale of the Units for working capital and general corporate purposes. Completion of the financings remains subject to regulatory approval. The securities issued under the financings will be subject to a four-month resale restriction in Canada.


Vencan's consulting geologist's, GeoVector Management Inc ("GeoVector") have recommended that an airborne survey be flown over the Cayenne East property. Vencan will utilize funds saved from not having to carry out extensive grid cutting and apply them to an airborne survey for the Cayenne East property. This survey will provide the company with a broad interpretation of the geology and assist in isolating the best drill targets.

Recent lumbering activities in the area will significantly aid the company's exploration program as "cutting" has cleared a significant portion of the intended grid area and new logging roads have made the area more accessible.

Vencan Targets Jefferson Deposit

Vencan will target the Jefferson VMS deposit for an early spring exploration program. After careful review of Falconbridge's historical exploration work including drill logs, core samples and reports, GeoVector in conjunction with their assessment of local geology and assay results of grab samples have outlined a Geco-type VMS Deposit. GeoVector believes there is significant potential for VMS Cu-Zn-Pb deposits on the Cayenne East portion of the property, which could be analogous to the Geco Cu-Zn-Pb deposits in Manitouwadge (60 MT @ 1.9% Cu and 3.8% Zn).

Historical Work-Cayenne East Area (Genoa Twp)

The Jefferson deposit features average historical values of up to 7.05% Zn and 4.58% Pb. In addition, an historic drill hole (1958) intersected 11.98% Zn over 3.2 metres in a strongly sulphized iron formation of the Woman River Iron Formation twp (7) kilometers west of the Jefferson deposit.
Shear Zone Hosted Lode Gold Potential - Gagne and Cayenne Central/Chili Areas

There is potential for shear zone-hosted lode gold deposits on the Gagne and Cayenne Central/Chili portions of the property, which would be analogous to the gold deposit of the Timmins gold camp. In particular, the mafic volcanic rocks of the Trailbreaker Group have been correlated with the Tisdale Group rocks in the Timmins gold camp. The Tisdale Group mafic volcanic rocks are host to several past gold producers, in particular, the McIntyre-Hollinger-Coniarum mines which had a combined past production of 30 million ounces.

Both management of Vencan and GeoVector are very encouraged by the gold opportunity on the property and we will continue to explore these areas. Depending on the availability of fund's we may conduct some exploration work during this next program but our main focus will be the VMS targets as in the short term they present the opportunity for a higher degree of success.

Alan Sexton, P. Geo is the qualified person responsible for the technical information presented in this release.

The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from expectations and projections set out herein.

Contact Information

  • Vencan Gold Corporation
    J. A. Kirk McKinnon
    President and Chief Executive Officer
    (416) 364-7024
    (416) 364-2753 (FAX)
    Vencan Gold Corporation
    Richard Schler
    Vice President & CFO
    (416) 364-7024
    (416) 364-2753 (FAX)