Written By: James McClelland
You may not see Bulgaria as a place for gold miners, but Eastern European rock is relatively underdeveloped and highly prolific when it comes to the shiny stuff. Few explorers have tried their luck since the country opened its doors to international miners in the 90s, because they lacked local relationships and an intimate understanding of Bulgaria’s bureaucratic requirements.
One company, Velocity Minerals Ltd. (TSX-V: VLC), has both these necessary qualities in abundance, and as a result, has moved forward in Bulgaria with an alacrity only matched by its name. Velocity Minerals was in the news last week to release their maiden resource estimate on the Rozino Gold Project a scant 7 months after the company drilled its first hole. The project is located 20km east of the Ada Tepe gold deposit currently being developed by Dundee Precious Metals.
Good juniors work to get a project off their books in a timely and profitable fashion that gives their investors the highest return for the least capital. Even with this mandate, many projects can take years before development enters the picture. Velocity, through its expert partnership with Bulgarian miner, Gorubso Kardzhali A.D., has launched the company and the Rozino Project on a trajectory that expects a PEA by late 2018.
Sounds fantastic considering Velocity only inked its 70% ownership option agreement with Gorubso for Rozino back in July 2017. Within weeks of the deal, Velocity embarked on a diamond drill campaign, completing 7,300m (43 holes) before year-end.
And all this activity has produced some exciting results.
According to Velocity’s March 5, 2018 news release, based on its on-going campaign, Rozino now has an inferred resource of 17Mt @ 1.15 g/t gold for a total of 629,000 ounces. Stuart Mills, Velocity’s Vice-President Exploration commented, “The results of this resource are excellent and keep us on track to deliver our PEA within one-year of the drill start. Our stated objective has always been to define potentially open-pittable resources and defining 90% of resources within 110m of surface is consistent with that goal.”
Investors will be happy to note that Rozino’s mineralized system remains open for expansion.
So, it’s a no-brainer that Velocity plans to complete another 5,000 metres at Rozino before they initiate the PEA to build out its resource numbers. Once the PEA has been completed, Velocity will exercise its option and Rozino will move forward as a 70:30 joint venture. .
Velocity’s deal with Gorubso goes even further, giving Velocity exclusive access to the currently operating Kardzhali Carbon In Leach (CIL) processing plant just 50 km away from Rozino. So Rozino doesn’t have to be mammoth to be economically viable. Getting access to Kardzhali is a huge win for the company as it is the only plant permitted for cyanide processing in the country.
On top of that, the Gorubso partnership also grants an option for Velocity to earn a 50% interest in the Chala Mine. Chala has been in operation since 2006, with historic resources released in 1998 totaling 1.5 million tonnes @ 9.8 g/t gold.
There’s still room for growth because in the 12 years Chala has been operating, it has never had a digital resource model. To date, Gorubso has been making a successful go of it by just chasing veins. Imagine the opportunities for resource expansion once Velocity applies standard computer modeling to define mineralization.
Let’s talk about leadership.
Velocity’s expert management team has a combined 100 years’ experience in exploration and development throughout Europe, Africa and the Americas. Company President, CEO and Director, Keith Henderson M.Sc., played a critical role as Executive Vice President in advancing Cardero Resource’s Pampa de Pongo through a positive scoping study and ultimate sale for US$100 million cash.
Stuart Mills M.Sc., Velocity Vice President Exploration, Bulgaria, is a 30-year E&D veteran and was part of the M&A team that sold Red Back Mining to Kinross for $7.2 billion.
Also, Valentin Velikov Buhov M.Sc, Exploration Manager, Bulgaria, has built up a successful 25 year industry track record. He has extensive experience with the Velocity projects and he previously worked on the Rozino gold deposit with both Hereward and Ivanhoe (Asia Gold).
The company’s board also sports some heavy hitters including Dr. Mark Cruise, current President and CEO of Trevali Mining, an established miner sporting a $1.0 billion market cap.
Both the management and board have deep ties to the region, making the company more Bulgarian than Canadian. Couple this with the Gorubso partnership and you have the perfect vehicle to navigate Bulgaria’s bureaucratic landscape.
Velocity is moving fast with smart deals and minimal capital in a country with a 10% corporate tax rate, a long history of mining and comparable royalty commitments to established regions such as Canada. Rozino and Chala are just the tip of the iceberg as Velocity also has access to option any or all of the six prospective projects in Gorubso’s portfolio.
Velocity’s aggressive plans and speedy track record at Rozino stands out as a positive signal the company is serious about getting to a quick construction decision. Fast-tracking development the way the company has will make a good case for M&A, possibly giving shareholders a quick and profitable exit.
Currently Velocity has 61.19 million outstanding shares with a market cap of $12.0 million.
The company was recently in Toronto for PDAC where we caught up with President and CEO Keith Henderson https://youtu.be/BDd0u8F7S-0