Virginia to Proceed with Drill Program for Otish Basin, QC
|May 30, 2011 ||
|News Release 11-06|
Virginia Energy Resources Inc. (TSX.V:VAE) will proceed with a minimum 2000-metre drill program for the company's 100% owned Otish Basin uranium property in Quebec. The drilling will commence in mid-July and results should be available in the early fall. A budget of $1.1 million was established for the summer program, which will also include ground surveys. IOS Services Geosientifiques Inc. of Chicoutimi, Quebec was selected to manage the drill program.
The drilling will be conducted on the Lac du Castor, Lavoie East (L-Zone extension) and Red Green prospects, and will target sandstone-hosted uranium-gold mineralization similar to the nearby Lavoie (L-zone) deposit of Abitex Resources Inc. and the Matoush deposit of Strateco Resources Inc. The targets are relatively shallow (less than 100 metres depth) and defined by historic drill intercepts (e.g. 5 metres grading 0.16 per cent U3O8 in hole OELV-290 at Lac du Castor), mineralized boulders as well as geophysical and geochemical anomalies in areas with prospective geology. In addition, Virginia crews will complete ground surveys to refine future targets.
Funding for this 2011 Otish field program is provided by a $2 million flow-through financing completed in December, 2010. These funds must be expended in Canada by December 2011. Expenditures on the Company's Quebec projects are eligible for a 50% Quebec refundable tax credit, meaning that over $550,000 is expected to be refunded to the Company after the current program.
Virginia is encouraged by the Quebec Government's recent announcement of the "Plan Nord", which outlines $2.1 billion investment in northern Quebec over the next 5 years, including the construction of the $278 million "Route 167 Extension" all-weather highway to the Otish Mountains. This road will pass within five kilometres of Virginia's land package, and will improve access, facilitate exploration and development, and increase the value of the Company's properties. According to the Fraser Institute Annual Survey of Mining Companies, Quebec is consistently one of the top-ranked jurisdictions worldwide for mining policies and investment.
On May 30, 2011, the Company determined it was necessary to restate the financial results for the years ended June 30, 2010 and 2009. The purpose of the restatements is to recognize an impairment in the equity accounted investment in Boss Power Corp. The restatement resulted in an adjustment in investments, opening deficit and future income tax liability for the years ended June 30, 2010 and 2009.
The Company remains well financed to pursue its corporate goals with $3.2 million of cash and a stock portfolio with a current market value of $ 7.2 million. Virginia Energy Resources owns approximately 30% of VA Uranium Holdings, Inc. and has a pre-emptive right to provide ongoing financing for the Coles Hill uranium project. As of March 31, 2011, VA Uranium Holdings held US$10.5 million of cash and equivalents. As a result, VA Uranium Holdings is also considered well financed to advance the Coles Hill uranium project both from a political and technical perspective.
The technical information in this news release has been reviewed by Michael S. Cathro, P.Geo., Virginia's Vice President of Exploration and a Qualified Person as defined by National Instrument 43-101.
About Virginia Energy Resources Inc.
Virginia Energy Resources Inc. is a uranium development and exploration company. The Company holds almost 30% stake in the advanced stage Coles Hill uranium project in Virginia. Additionally, the Company is pursuing active exploration programs in the Athabasca Basin on its Murphy Lake and Hatchet Lake uranium properties, which are held in a 50-50 Joint Venture with Denison Mines Ltd., and its 100% owned uranium properties in the Otish Basin of Quebec. The Company is also a 37% shareholder of Boss Power Corporation. Virginia Energy Resources Inc. trades on the TSX Venture Exchange under the symbol VAE.
On Behalf of the Board of Directors
VIRGINIA ENERGY RESOURCES INC.
Walter Coles Jr., President & CEO
Neither TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.