Papua New Guinea is considered by many to be vastly under-explored and highly prospective for the discovery of new mineral deposits. Papua New Guinea is strategically situated along the Pacific Rim of Fire, the active circum-Pacific volcanic belt that is host to large copper-gold porphyry systems (Grasberg, Ok Tedi, Panguna and Frieda River) and a number of world-class epithermal gold deposits including Porgera and Lihir. These enormous and largely untapped natural resources offer excellent investment opportunities.

With the Government's positive attitude to foreign investment through the granting of incentives and concessions, and the recognition of the private sector's important contribution to the economic growth, it is clear why many international companies have invested in Papua New Guinea. Majors currently operating in PNG include Barrick, Xstrata, Newmont, Ok Tedi Mining, Harmony Gold, Nautilus Minerals, Lihir Gold and Newcrest.

Vangold has been actively exploring Papua New Guinea since 2003, through a joint venture partnership with New Guinea Gold Corp (TSXV: NGG). In 2009, Vangold entered into a binding agreement with NGG, under which Vangold acquired from NGG, its remaining 50% to bring Vangold's ownership to 100% of four well-advanced gold properties in PNG along with equipment and two diamond core drill rigs. These four properties are Mt Penck, Feni Island, Fergusson Island and Allemata. Each of the four gold properties offers a unique path to discovery.

On February 1st, 2010, Vangold completed its acquisition from NGG of four gold properties - Mt. Penck, Allemata, Fergusson and Feni.


Mt. Penck (Gold-Silver - 102.8 sq km)

Mt. Penck (EL1322) is situated 55km west of Kimbe, the Provincial Capital of West New Britain Island. Road access from Kimbe to Mt. Penck is good. The license is in good standing. The property covers a large, eroded extinct stratovolcano. The project site sits at 200-300meters above sea level and is bordered by the Bismarck Sea. Hills are covered in jungle with second growth forest and are currently being logged in parts, which is opening up the project area for exploration. Small villages and a loading dock are located at the base of Mt Penck.

Historical work by Placer Dome (1986) and BHP Havana (1970) were targeting copper mineralization systems. In 1985 BHP-Utah Minerals International identified gold anomalies, which initiated the exploration work for gold mineralization. Soil sampling (1986-1987) indicated anomalous arsenic geochemistry and a float rock sample from Kavola River yielded 49.4 g/t gold. RC drilling and aircore drilling (1989) totaling 1140.5m were drilled on the property. In 1990 geochemical sampling over the Kavola East prospect was done, with anomalies clearly outlined by arsenic and gold in soils. Several other prospects were similarly discovered; Peni Creek, Koibua, Koibua South and Kavola South.

Indo Pacific Mining (1994-1997) drilled 7 DDH totaling 1098.5m into the Koibua, Peni Creek and Kavola East prospects. Drilling depths averaged 100-200m. Trenching and rock sampling were also completed.

Kanon acquired the property in 2003. Vangold and NGG became joint owners of Kanon in 2004. Extensive hand trenching and sampling were done in 2004 in Kavola East prospect. 7 DDH (MPD001 to MPD007) were drilled in Kavola East (2004) totaling ~1000m. A soil sampling grid was conducted in 2005 covering the main prospects. In 2006 a total of 3640.8m were drilled in 31 DDH (MPD008-MPD038). In 2007 all historic and recent drillhole locations were re-surveyed, trenches were resampled to confirm grades, cross-sections were drafted and a drillprogram proposed for Kavola East and Peni Creek.

By 2007 Kanon had completed 38 DDH totaling more than 4700m. Results were encouraging with near surface drill intersections such as 72m at 1.79 g/t gold, 14m at 2.82 g/t gold and 2m at 36.7 g/t gold. Trenching by bulldozer and by hand by Kanon yielded intersections including 18m at 3.79g/t gold; 8m at 7.72 g/t gold; 18m at 1,72 g/t gold; 3m at 16.32 g/t gold and 3m at 180 g/t gold.

In 2009 a 4,212.7m diamond drill program was completed, focusing on Kavola East and the main prospects. Results for Kavola East include 69.5m at 1.82 g/t gold and 133m at 1.83 g/t gold, both starting from surface. Encouraging results were also returned from Koibua, Peni Creek and Kavola South, expanding the area of known mineralization. Gold mineralization to date is found in six prospects (Kavola East, Kavola South, Peni Creek, Koibua, Koibua South and Big Bend) within an area 1km by 1.1km, starting at surface to known depths of 130m. Kavola East remains open to the east and south.

In 2009, Barrick signed a letter of agreement with Coppermoly to sole fund up to AU$20 million on Simuku and Nakru, two copper-gold-moly porphyry deposits that are located within the same mineralized corridor in West New Britain that also contains the Mt Penck project. This corridor is an extensional feature that influenced the emplacement of intrusives and associated mineralization at Mt Penck, Simuku and Nakru. As of February 2010, Barrick has commenced their exploration program, with office based out of Kimbe. Penck is located less than 50km northwest from Simuku. Having the world's largest gold producer aggressively exploring in the same belt adds enormous confidence to the Mt Penck program.

For 2010, Vangold plans a CAD$2 million dollar exploration program. The first phase will be to place a 2km by 2km grid, north-south lines at 100m lines spacing and 25m sample spacing across the known prospects and beyond, where previous results from regional stream sediments and pan concentrates were indicative of gold mineralization. Soil geochemistry, assaying for gold and 35 element ICP analysis, will be conducted along the grid, at roughly 1800 sample stations, and a ground survey will be run, which will be tied into a satellite data set with aim to get 50 centimeter accuracy. An IP survey will follow as well as extensive trenching in exposed areas. Integration of these datasets will define new targets and determine the placement of new drill holes. Additional drill holes will be proposed to define NI 43-101 compliant resource for Kavola East and expand known gold mineralization to the east and south of Kavola East. Learn more

Fergusson Property (Gold - 115 sq km)

The Fergusson Property is located on Fergusson Island; an island adjacent to NGG's Imwauna property on Normanby Island. Access is by boat or fixed wing aircraft. Previous explorers completed 86 drill holes for approximately 6,000 meters of drilling and defined several prospects with significant gold in drill hole.

Igwageta Prospect a zone approximately 1km by 0.5km of anomalous gold was defined with historic (1998) shallow drilling. Highlights include 26m at 1.06 g/t gold; 10m at 8.14 g/t gold; 12m at 5.88 g/t gold; 25m at 2.93 g/t gold; and 20m at 3.04 g/t gold. Areas with strong gold in soil from the 2007 soil program (28.1 g/t Au; 7.42 g/t Au and 9.47 g/t Au) coincide with anomalous trench results from the 2008 trench program (TR12: 21m@ 2.51g/t Au and 57m@ 1.23 g/t Au at 0.5 g/t cut-off). In 2009, Vangold geologists investigated the Igwageta site of highly anomalous gold in soils and discovered visible gold in outcrop. An aggressive exploration program is planned for 2010. Learn more


Allemata Property (Gold - 148 sq km)

The Allemata property is located on the main island of Papua and contains the historic Milne Bay Goldfield. From 1899 to 1926, the Goldfield produced 14,320 ounces of gold, mainly from alluvial deposits. In 1931, mining commenced with high-grade hard rock mining. Platinum was discovered and mined from 1933 to 1941, producing a total of 6 kilograms of platinum. 1,000 ounces of gold was produced in 1938 and 1939 from the Louise/ Ulo Ulo, Jumbo/Juno and Rough Ridge Mines. This property has not been mined since World War II. The Allemata property is easily accessible by a 20 kilometer all weather road from the port of Alotau and Gurney International Airport. Logging roads provide access throughout the property. Management believes that this project could be developed relatively easily. Drilling and geochemistry on the Allemata property has identified two gold zones (Ulo Ulo and Haluba) on which the Company is focusing their exploration. Other geochemically anomalous zones remain to be explored.

Ulo Ulo Prospect hosts vein style gold mineralization in a 400m by 400m area. Much of the gold is in relatively narrow high grade gold zones or wide, lower grade zones. The Company believes the Ulo Ulo target may be a high-grade vein system similar to NGG's Imwauna Property on Normanby Island. Trench results from 2008 program define a series of northwest trending quartz-limonite veins that average 1 to 3m in width and 100m up to 600m in length. A drilling and trenching program commenced at Ulo Ulo in March 2009 with drill intercepts of the veins include 1m@ 17.65g/t Au (UDH001); 1.9m@ 9.39g/t Au (UDH003); 1m@ 58.3g/t Au (UDH012) and 2m@ 7.55g/t Au (UDH013).

Haluba Prospect hosts disseminated and stockwork gold mineralization greater than 0.5g/t over a 400 meter by 300 meter area. This prospect has geological similarities to the Kavola East deposit at Mt Penck. Learn more