Burgess Point to buy Vencorp

Toronto-based Burgess Point Resources (CDN) plans to acquire Venezuelan Mineral Development Corp. (Vencorp).

The proposed takeover would see Burgess shares consolidated on a 1-for-7 basis. Shares of Vencorp would be bought with the issuance of Burgess shares. A private placement worth $2.8 million is planned and the transactions would leave Burgess with 7.6 million shares outstanding.

In addition, Burgess would change its name to Metallica Resources. President James Golla said shareholders will vote on the proposed takeover on Jan. 14.

This is an opportunity for the company to broaden its horizons and grow, he said. Burgess was a decent oil and gas company and it now has a chance to get into something really exciting.

Vencorp has four concessions totaling 15,750 hectares in the Kilometre 88, Callao and Anacoco regions within the Guyana shield in southeastern Venezuela. In addition, Vencorp has applied for another four concessions, which, if granted, will be added to Burgesss portfolio.

The properties currently owned by Vencorp are subject to a 1% gross production royalty payable by Vencorp to Euro-Nevada Mining (TSE). The latter can increase this royalty to 2% within three years.

Vencorp currently owns the Frida, Anacoco, Chipichipi and Santa Rosa concessions.

The 3,900-hectare Frida concession is underlain by Precambrian volcanics and volcaniclastics similar to those thought to host Placer Domes Las Cristinas deposit to the southeast. Preliminary field work indicates the presence of quartz vein stockworks and shear zones which contain gold- and copper-bearing sulphides. A 1-sq.-km area in the northern part of the concession is marked by numerous pits and old workings within saprolitic and lateritic layers, suggesting potential mineralization.