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Velocity inks option deal to earn 70% stake in Bulgarian Sedefche gold project

Author Mario Tanev
Velocity inks option deal to earn 70% stake in Bulgarian Sedefche gold project Photo: Velocity Minerals / All rights reserved.

SOFIA (Bulgaria), October 7 (SeeNews) - Canadian mineral exploration and development company Velocity Minerals said on Monday that it has entered into an option agreement with Bulgaria's Gorubso Kardzhali to acquire a 70% interest in the Sedefche gold deposit in southeast Bulgaria, which includes the Obichnik gold project.

Velocity can earn a 70% interest in the property by completing 5,000m of drilling on the property prior to March 31, 2020, with drilling expected to commence immediately, the Canadian company said in a statement.

"Within our hub ‘n’ spoke development model, Sedefche is the fourth project for Velocity and one of three option agreements signed with our partner Gorubso this year," Keith Henderson, Velocity’s president and CEO, said.  "As a project fully permitted for mining, Sedefche is more advanced than our other properties," he added.

Thus far, the project has been explored through 45 surface exploration trenches, 41 exploratory shafts and pits, 122 drill holes of diamond drilling, 3 mega trenches with 86 vertical channel samples, and a metallurgical bulk sample excavated and processed at Gorubso’s gold processing plant.

If Velocity has not reached a decision to exercise the option on completion of the initial drilling, the company can extend the expiry of the option by completing an additional drill program provided that the additional rrilling must be completed within 12 months from the effective date of the option agreement. 

If Velocity decides to exercise the option, it will set up a joint venture company. On entering into the joint venture, Velocity will be required to pay a fee of $800,000 (728,000 euro) to Gorubso, payable in common shares in the capital of Velocity, followed by a second similar payment upon production of the first dore from ore extracted at the project.

(1 euro = 0.9103 euro)