Resource Maven Gwen Preston announced over the weekend she'd be purchasing stock in Velocity Minerals Ltd. (VLC:TSX.V) at market open today (Aug. 21). She anticipated positive drill results from the company's first holes at the Rozino project, located within the Tintyava prospecting and exploration license in southeast Bulgaria.
Velocity delivered. In this morning's press release, the company announced results for two holes of "74 meters @ 2.35g/t gold including 39 meters @ 4.11 g/t gold." The company's president and CEO, Keith Henderson, called the results "among the best grades ever returned from the project and the drill holes clearly demonstrate the potential for thick, high-grade gold mineralization between the historical drill fences."
Upon release of the results, Velocity stock jumped as much as 74%, from a previous close of $0.27 per share to $0.47 per share before settling to close at $0.34 per share.
The diamond drill holes are a part of a larger, 12,000-meter drill program of up to 65 holes, and follow on historic drilling at the site, as described in this Streetwise Reports article. The Rozino project is located about 20 km from Ada Tepa, which is being developed by Dundee Precious Metals.
Peter Epstein of Epstein Resources is also watching Velocity Minerals. "Gold junior Velocity Minerals has the right team in the right place at the right time," Epstein told Streetwise Reports. "Its Eastern Europe focus is off the beaten path, but the world-class management team has pulled together two highly prospective gold projects in southeastern Bulgaria that have near-term catalysts and tremendous blue-sky potential."
Epstein went on the say that, with the "robust" drill program expected to continue into 2018, "Management has taken prudent steps to maximize its chances of success. It 1) partnered with a prominent regional gold producer (only company with a cyanide operating permit); 2) established a strong technical & permitting team; and 3) signed a valuable 12-month exclusive option on an operating mine."
Preston's investment thesis for Velocity is "two-pronged." First, the expert notes that stock available for free trade following the company's reverse takeover of a privately held company in late July is limited. Second, Preston believes Velocity could become a producting miner in short order.
"The concept here is that Velocity is partnered with a Bulgarian mining company called Gorubso Kardzhali," Preston wrote. "Gorubso has been producing on a small scale from its Chala gold mine for ten years but a potential partnership with Velocity could see production ramp up."
Velocity is also exploring Ekuzya, a prospective property adjacent to Chala. "Any gold discovered here would likely feed the Chala facility, which means it could become operational with limited capital and with little or no permitting, as it is officially part of Gorubso’s mine concession," Preston stated.
Finally, Preston noted that "Recent success in this part of the world (Mariana's high-grade success at Hot Maden in Turkey and Reservoir Minerals high-grade Timok discovery in Serbia, which led to takeovers by Sandstorm Gold Ltd. and Nevsun Resources, respectively) have the market attuned to the potential for discoveries in the region. If Velocity pulls a result like that from the only previous hole drilled to the northeast—68 metres of 3.15 g/t gold—the market will notice."