• Velocity Minerals (VLC) has signed a deal with Balkan Mineral Development OOD to acquire the Ilgika gold-copper project in Bulgaria
  • Under the terms of the deal, Velocity may acquire a 100 per cent stake in the project by acquiring the issued and outstanding shares of Balkan Mineral Development
  • As consideration, Velocity has made an initial payment of C$49,000 in cash, and will need to incur a total of $1.23 million in exploration expenses to acquire the full interest
  • Balkan Mineral Development will retain a two per cent net smelter return royalty, which will be capped at $6.7 million
  • Velocity Minerals (VLC) is currently up 1.89 per cent and is trading at 54 cents per share

Velocity Minerals (VLC) has signed a deal with Balkan Mineral Development OOD (BMD) to acquire the Ilgika gold-copper project in Bulgaria.

Covering a total land package of 105 square kilometres, the Ilgika project sits on the westernmost segment of the Tethyan belt, which hosts several epithermal gold and porphyry copper-gold mineral deposits and operating mines.

Under the terms of the agreement, Velocity may acquire a 100 per cent stake in the project by acquiring all of the issued and outstanding shares of BMD, a definitive agreement for which is anticipated to be executed in due course.

Velocity has already made an initial cash payment of C$49,000 to BMD, and will need to incur $460,000 in exploration expenses by December 31 this year to earn an initial 51 per cent interest. 

From there, the company may earn the remaining 49 per cent stake by incurring an additional $765,000 in exploration expenses by December 31, 2021.

BMD will retain a two per cent net smelter return royalty on the Ilgika project, which will be capped at $6,700,000. Velocity may purchase one per cent of this royalty at any time for a fee of $750,000, and may acquire a further 0.5 per cent for $1.5 million.

Optionally, Velocity may wholly acquire the Ilgika project for a total of $340,000 before December 31, 2021, or for $750,000 before December 31, 2021. Either of these payments may be made in full with cash, or with half of the total amount in cash and half via the issuance of common shares.

Should the company decide to take this option, BMD will retain a 0.5 per cent net smelter royalty, capped at $6,700,000. This royalty may be purchased by Velocity for $750,000, after which the project will operate royalty-free.

Roughly 42,000 metres of drilling has already been completed at the property under previous operators, which was primarily focused on the Iglika copper-gold skarn deposit. The company says that this is not of immediate interest and will instead target epithermal gold systems with surface exploration and drill testing.

Geophysical surveys will be carried out on relevant copper porphyry targets to determine the best path forward.

Velocity Minerals (VLC) is currently up 1.89 per cent and is trading at 54 cents per share at 1:09pm EDT.

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