Ventana Gold Corp.

Ventana Gold Corp.

November 26, 2009 16:12 ET

Ventana Provides Corporate Development Update and Announces Dispute Respecting La Bodega Agreement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 26, 2009) - Ventana Gold Corp. (TSX:VEN) ("Ventana" or "the Company") has been advised that Sociedad Minera La Bodega Limitada (or the "Vendor"), the owner of the mineral rights to the La Bodega property in Colombia, is seeking an arbitration in relation to an option agreement (the "Option Agreement") with CVS Explorations Ltda. ("CVS"), Ventana's 100%-owned subsidiary. The Option Agreement provides for CVS to acquire the La Bodega property mineral rights through a series of staged payments as detailed below.

The request for arbitration is an attempt by the Vendor to invalidate the Option Agreement and have the property returned to the Vendor. CVS has operated under the Option Agreement for almost four years without any performance default or allegation of default. The Vendor's request for arbitration is based on arguments that the Option Agreement fails to comply with applicable Colombian law and the Vendor has refused to abide by the terms of the Option Agreement.

Ventana has well respected Colombian legal counsel who prepared the Option Agreement. This counsel, together with counsel from one of Colombia's largest and most respected legal firms, from whom Ventana has sought a second opinion, has advised Ventana that the Vendor's argument that the Option Agreement fails to comply with applicable Colombian law is wholly without merit. Both sets of counsel fully expect the Option Agreement to be upheld as valid and enforceable by the arbitration panel. Ventana will exercise all means to protect its rights under the Option Agreement.

Ventana President and CEO Steve Orr said: "We believe this is an attempt to obtain more money for the mineral rights now that we have substantially increased the value of the property through our exploration success. There have been no changes to the mining laws and there are no government agencies involved in the dispute. We are confident in the integrity of the regulatory system and the application of justice in Colombia. Ventana has all the necessary permits in place to continue exploration and technical work on the property and the Vendor cannot legally stop Ventana from doing further work on the property."

Ventana's initial 43-101 resource estimate on the La Bodega property is due in the first quarter of next year and the Company has a scoping study under way, with completion expected mid-2010. This work remains on schedule.

Option Agreement
Sociedad Minera La Bodega Limitada is a private company controlled by certain members of the Gelvez family of Bucaramanga, Colombia, and is the title holder to Concession Contract #3451 (the La Bodega property) granted by the Colombian mining authority. CVS entered into the Option Agreement in February 2006 which calls for a series of staged payments, as follows:

  Cash ($US)Shares
On Signing - February 2006 (Paid) $ 300,000  -
February 8, 2007 (Paid) $ 400,000  250,000
February 8, 2008 (Paid) $ 500,000  250,000
February 8, 2009 (Paid) $ 2,800,000  250,000
February 8, 2010 (Payment attempted Nov. 20, 2009) $ 3,000,000  250,000
   $ 7,000,000  1,000,000

Ventana has met all the conditions of the Option Agreement and the first four payments have been made. The final payment payable by February 8, 2010 was attempted (the Option Agreement allows for CVS to exercise the option in full at any time prior to the date of the final payment) but the Vendor has refused to accept the payment, which is a breach of the Option Agreement.

Arbitration Process
A claim has been filed by CVS with the Chamber of Commerce in Bucaramanga, Colombia for breach of the obligation by the Vendor to accept payment and the Chamber is now in the process of establishing the arbitration panel. Once the arbitrators have been chosen a settlement hearing will be held and arbitration costs established. The parties then have 10 days to deposit the assessed cost. If neither party pays, the arbitration is terminated and can be converted to a lawsuit in the courts. Otherwise it proceeds to hearings to collect and present evidence. Once under way, the arbitration cannot be stopped unless both parties agree, and the final decision is binding. It can be appealed before a Colombian high court based on a failure of procedure.

Ventana's advice, and that of Colombian counsel, is that the Vendor's claim is completely without merit and Ventana is confident it will prevail.

Corporate Development Update
In addition, Ventana also announces that it is in advanced discussions which could result in the acquisition of the Company by a third party.

Conference Call
Ventana will hold a conference call today at 2:30pm PST/ 5:30pm EST. An audio transcript of the call will be available on the Company's website at immediately following the call. Details for the conference call are as follows:

Toll free within Canada and the US: 1 888 892 3255
International + 1 416 507 1616

Cautionary Statement Regarding Forward-looking Information
Certain of the statements made and information contained in this press release may constitute forward-looking information within the meaning of applicable securities legislation. All information and statements which are not historical fact constitute forward-looking information and, in many cases, can be identified by words such as "may", "will", "expect", "plan", "anticipate", "believe", "estimate", "potential", or other similar terminology. The forward-looking information contained in this press release is based on the reasonable expectations and beliefs of management as at the date of this press release and involves numerous assumptions, known and unknown risks and uncertainties, both general and specific to Ventana and the industry in which the Company operates. Such assumptions, risks and uncertainties include, but are not limited to future prices of gold, the factual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated as well as those factors disclosed in Ventana's documents filed from time to time with the securities regulators in the provinces of British Columbia, Alberta and Ontario. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of the Company, or industry results, may vary materially from those described in this press release. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as otherwise required by law, Ventana does not intend to and assumes no obligation to update or revise forward-looking information, whether as a result of new information, plans, events or otherwise.

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