Velocity Provides Corporate and Exploration Update and Extends Advisory Engagement

Rhea-AI Summary

Velocity Minerals provided updates on its corporate strategies and exploration initiatives. The company is evaluating strategic alternatives, including the possible sale of its Rozino gold deposit, currently in the prefeasibility stage. Sensitivity analysis based on gold prices indicates the deposit's high responsiveness to price fluctuations, with an after-tax NPV5% ranging from $35.4M at $1,125/oz to $218M at $1,875/oz. Velocity owns 70% of Rozino and has an agreement to sell the asset on a 100% basis.

Velocity also announced that Dundee Precious Metals will terminate their Option Agreement on the Iglika property effective July 30, 2024. DPM has invested $3.5M in exploration, including significant copper and gold drill intersections. Velocity plans further drilling at Iglika, with 15 new drill holes awaiting permits and is seeking a new partner for further exploration.

Positive

• Sensitivity analysis shows Rozino gold deposit's NPV5% ranges from $35.4M at $1,125/oz to $218M at $1,875/oz.
• Velocity owns 70% of the Rozino gold deposit.
• Rozino gold deposit has a Base Case after-tax IRR of 27.4%.
• DPM has invested $3.5M in exploration at the Iglika property.
• Significant drill results at Iglika include intersections of 71m at 0.15% copper and 24.5m at 0.21% copper.

Negative

• Dundee Precious Metals will terminate the Iglika property Option Agreement effective July 30, 2024.
• There is no assurance of a specific strategic plan or financial transaction being completed for Rozino.
• The termination of the Option Agreement puts additional pressure on Velocity to secure a new partner for Iglika.

Vancouver, British Columbia--(Newsfile Corp. - June 13, 2024) - Velocity Minerals Ltd. (TSXV: VLC) ("Velocity" or the "Company") provides a corporate and exploration update and extends its advisory engagement with Leede Jones Gable Inc. (the "Advisor") who will continue to work with Velocity's management and Board to evaluate a range of strategic alternatives that may be available to the Company to maximize value for all shareholders.

Strategy and Potential Asset Sale

The Company is considering various strategic alternatives including but not limited to the sale of the Rozino gold deposit ("Rozino"). Rozino is a prefeasibility-stage ("PFS") gold deposit, which is currently advancing through the permitting process. The PFS was completed assuming a long-term gold price of US$1,500 per ounce and the Rozino gold deposit is highly sensitive to gold pricing, as illustrated by Figure 1 below, which considers sensitivity of the 2021 PFS discounted cash flow model at gold prices 25% above and below the $1,500 base price.

Gold Price (US$)	After Tax IRR	After Tax NPV5% (US$ million)
$1,125 (-25%)	10.2%	$35.4
$1,500 (PFS Base Case)	27.4%	$122.5
$1,875 (+25%)	41.4%	$218.0

 

Figure 1: Rozino Gold Price Sensitivity Analysis (source: Revised NI 43-101 Technical Report "Prefeasibility Study for the Rozino Gold Project, Bulgaria. Report Date December 15, 2021)

Velocity owns 70% of Rozino in joint venture with a partner holding a 30% stake. Velocity and its partner have signed an agreement that allows the Rozino asset to be offered for sale on a 100% basis, subject to certain qualifications.

There can be no assurance that ongoing assessment of strategic alternatives will result in any specific strategic plan or financial transaction and no timetable has been set for its completion. The Company does not plan to provide updates unless there are material developments to report.

Iglika Project Update

Pursuant to a letter agreement dated June 8, 2023 (the "Option Agreement"), Velocity has received notice from Dundee Precious Metals ("DPM") that DPM intends to terminate the Iglika property ("Iglika") Option Agreement effective July 30, 2024. During the term of the Option Agreement to date, DPM has spent approximately $3.5 million on surface exploration, drilling and associated costs, completing a total of 10,428m of diamond drilling, with drillholes averaging 613m in depth.

Following completion of DPM's drill program, the best drill intersection is 71m at 0.15% copper, including 4.7m at 0.26% copper, 6.0m at 0.37% copper, and 24.5m at 0.21% copper (see previous news release January 23, 2024). Recently, drilling at the project intersected 24.5m at 0.21% copper, 7.0m at 0.23% copper, and 3.3m at 1.61 g/t gold (see Tables 1 and 2 for complete drill highlights). Best results are from the Chai Dere propylitic alteration zone ("Chai Dere"), where mineralization has been intersected in a total of 3 drill holes, along approximately 750m of strike length (Figures 2 and 3). Drill spacing leaves ample space for discovery of additional copper mineralized zones.

A total of 15 follow-up drill holes have been planned and are currently being permitted. The Iglika prospecting license is currently awaiting approval of an application for a two-year extension and once drill permitting is also completed, drilling of targets can begin. The Company is seeking to secure a new drill partner to complete target testing at Chai Dere and throughout the Iglika property.

Figure 2: Map showing selected drill holes at the Chai Dere target, located north of Iglika Copper Skarn deposit.

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/4368/212845_514b582d24c84a97_002full.jpg

Figure 3: Selection of core photographs showing alteration and mineralization at Chai Dere. Photos A-D from drill hole IDD-006: A) at 466.8m; disseminated and veinlet of chalcopyrite-pyrite (cpy-pyy) in chlorite-sericite±epidote altered crowded feldspar porphyry. B) at 476.9m; intrusive breccia. C) at 546.5m; cpy-pyy veinlets in chlorite-sericite-epidote altered crowded feldspar porphyry dyke. D) at 660.9m; chlorite-sericite altered andesite with anhydrite and quartz-pyy-cpy veinlets. Photos E-H from drill hole IDD-014: E) at 68.8m; cpy-pyy veinlets in sericite-pyrite altered coarse volcaniclastics. F) at 112.9m; cpy-pyy vein in sericite-chlorite altered tuff. G) at 226.4m, cpy-pyy veinlets in quartz-sericite-pyrite+/-chlorite altered crowded feldspar porphyry dyke. H) at 915.0m; quartz-chalcopyrite vein cutting chlorite altered andesite dyke.

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/4368/212845_514b582d24c84a97_003full.jpg

Table 1: Significant drill intercepts from Chai Dere, Iglika Propylitic Zone, Boyalashka River and Sitovo North targets, with main intercepts calculated using a 0.05 % copper trigger, a minimum 0.1 % copper composite grade, and a maximum of 6 metres consecutive waste. Including intercepts calculated using higher parameters to minimize number of intervals generated (0.1% copper trigger, a minimum 0.2% copper composite grade, and a maximum 3m of consecutive waste).

Hole ID	From (m)	To (m)	Interval (m)	Copper (%)		Hole ID	From (m)	To (m)	Interval (m)	Copper (%)
IDD-006	76.60	80.90	4.30	0.11		IDD-014	63.90	72.00	8.10	0.11
IDD-006	97.50	112.50	15.00	0.16		including	70.00	72.00	2.00	0.27
including	99.50	103.50	4.00	0.47		IDD-014	110.90	115.00	4.10	0.36
IDD-006	214.10	217.30	3.20	0.17		IDD-014	222.30	229.80	7.50	0.14
IDD-006	222.60	227.00	4.40	0.13		including	222.30	226.50	4.20	0.21
IDD-006	311.30	314.30	3.00	0.11		IDD-014	259.50	265.00	5.50	0.12
IDD-006	430.00	500.90	70.90	0.15		including	262.80	265.00	2.20	0.22
including	447.40	452.10	4.70	0.26		IDD-014	389.10	404.10	15.00	0.14
including	458.70	460.70	2.00	0.21		including	400.10	404.10	4.00	0.21
including	464.70	470.70	6.00	0.37		IDD-014	414.70	421.10	6.40	0.10
including	476.40	500.90	24.50	0.21		IDD-014	626.30	632.30	6.00	0.11
IDD-006	551.40	554.50	3.10	0.17		IDD-014	689.30	692.60	3.30	0.12
IDD-006	552.40	554.50	2.10	0.21		IDD-014	755.70	802.50	46.80	0.11
IDD-006	576.00	579.00	3.00	0.11		including	767.60	774.60	7.00	0.23
IDD-006	650.30	661.00	10.70	0.10		including	789.60	791.60	2.00	0.25
IDD-006	707.60	715.10	7.50	0.10		IDD-014	909.00	950.50	41.50	0.12
IDD-006	730.50	734.60	4.10	0.12		including	921.40	923.40	2.00	0.22
IDD-006	772.70	784.30	11.60	0.16		including	931.50	933.50	2.00	0.23
including	781.30	784.30	3.00	0.38
IDD-006	833.60	838.60	5.00	0.11		IDD-016	92.30	96.00	3.70	0.11
						IDD-016	810.60	814.60	4.00	0.11
IDD-007	709.60	711.00	1.40	0.35
						IDD-017	114.70	117.70	3.00	0.11
IDD-008	406.60	409.60	3.00	0.12		IDD-017	145.70	149.50	3.80	0.14
IDD-008	427.60	433.20	5.60	0.11		IDD-017	608.20	611.20	3.00	0.11
IDD-008	446.40	455.60	9.20	0.12
IDD-009	353.10	356.10	3.00	0.12
IDD-010	43.70	46.70	3.00	0.11
IDD-010	80.80	95.90	15.10	0.13					<

FAQ

What strategic alternatives is Velocity Minerals considering?

Velocity Minerals is evaluating options including the sale of its Rozino gold deposit.

What is the current stage of the Rozino gold deposit?

The Rozino gold deposit is at the prefeasibility stage.

How does the Rozino gold deposit's value change with gold prices?

The Rozino deposit's NPV5% ranges from $35.4M at $1,125/oz to $218M at $1,875/oz.

Who intends to terminate the option agreement for the Iglika property?

Dundee Precious Metals intends to terminate the agreement effective July 30, 2024.

How much has DPM spent on exploration at the Iglika property?

DPM has spent approximately $3.5 million on exploration at Iglika.