Preliminary Assessment Results for Volta Grande Gold Project

 

TORONTO, ON - Verena Minerals Corporation reported the completion of the Preliminary Assessment ("PA" or "Scoping Study") for the Volta Grande Gold Project located in Para State, Brazil.

The study was undertaken by Scott Wilson Roscoe Postle Associates Inc. of Toronto in order to determine the viability and economic parameters for a large scale gold mining operation at the North Block of the Volta Grande Project.

Highlights of the PA are as follows, based on a US $900 / oz gold price:

-   Annual production of an average of 200,000 ounces per year at full

    capacity

-   Initial 10-year mine life based on current Mineral Resources

-   Updated mineral resource estimation at a 0.3 g/t Au cutoff grade

        -   845,000 ounces gold, Indicated Resource of 30,045,000 tonnes at

            a grade of 0.87 g/t Au

        -   1,818,000 ounces gold, Inferred Resource of 79,945,000 tonnes at

            a grade of 0.71 g/t Au

-   Internal Rate of Return ("IRR") of 22%

-   Strip ratio, Life of Mine ("LOM") 3.2:1

-   Annual throughput approximately 7 million tonnes / year

-   Production rate approximately 20,000 tonnes / day

-   Ore head grade approximately 1 g/t Au

-   Capital costs of US $295 million

    -   including US $57 million new mining equipment

    -   including 15% contingency or US $ 38 million

-   Cash costs US $481 / ounce Au

-   Undiscounted Pre-Tax Cash Flow of US $371 million over the current mine

    life

-   Simple pre-tax payback after approximately 4.7 years

-   Net Present Value ("NPV"), on pre-tax basis,of US $151 million at a 7.5%

    discount rate

During the Pre-feasibility phase, various options will be analyzed that could reduce capital requirements, including: purchase and fabrication of all mining and milling equipment in Brazil, as well as contract mining.

The current PA is based on the Mineral Resources outlined to date with drilling to 150 meters below surface. As Verena progresses to a Bankable Feasibility Study, an additional 20,000 meters will be drilled to upgrade Inferred Resources to Measured and Indicated Resources. This next phase of drilling will test the extensions of the mineralized zone along strike and down dip to at least the 300 meter level, which may be amenable to open pit and / or high grade underground operations.

It is important to note that the Brazilian government has recently given approval for the construction of the "Belo Monte Power Plant" 20 kilometers upstream from Volta Grande. This power project will be an 11,000 Megawatt capacity plant and the second largest hydro project in Brazil. This development will have a significant impact on the Volta Grande project by opening the region with new infrastructure, power, labour, machinery, and other services important in developing a new mining project.