Velocity to Acquire Certain Mineral Property Interests in Bulgaria

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 6, 2017) -

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Velocity Minerals Ltd. (TSX VENTURE:VLC.H) ("Velocity") is pleased to announce that it has signed a Share Purchase and Sale Agreement (the "SPA") with 1077076 B.C. Ltd., a private British Columbia corporation ("TargetCo"), and the shareholders of TargetCo (the "Sellers"), whereby Velocity will acquire all of the outstanding shares of TargetCo in exchange for common shares (the "Payment Shares") of Velocity, at a deemed price of $0.25 per Payment Share (the "Transaction"). On completion of the Transaction, Velocity will hold (through TargetCo) options to acquire interests in the Tintyava Property and the Ekuzya Property located in south-eastern Bulgaria.

About the Target

TargetCo is a private British Columbia company, which is arm's length to Velocity.

TargetCo has entered into letter agreements with "Gorubso-Kardzhali" AD ("Gorubso") which provide for the grant by Gorubso to TargetCo of: (i) an option to acquire a 50% interest in the Ekuzya Property ("Ekuzya"), and (ii) an option to acquire a 70% interest in the Tintyava Property ("Tintyava PL"), which includes the Rozino Gold Deposit ("Rozino") (Figure 1). The projects are located in southeast Bulgaria, Eastern Europe. The underlying owner of both Ekuzya and Tintyava PL is Gorubso, which is a gold producer in the region. Ekuzya is located south and adjacent to Gorubso's producing Chala Gold Mine, within Gorubso's Chala mining concession. Rozino is situated within the 163 km² area comprising the Tintyava PL.

Ekuzya Property

The area now comprising Ekuzya was first explored in the Soviet-era for base metals through extensive trenching and drilling. No soviet-era drill samples were analysed for gold and less than 3% of all surface and underground exploration sampling was analysed for gold. Following the collapse of the Soviet Union, the Bulgarian state explored for gold but focussed its efforts north of Ekuzya, where it drilled the Chala gold deposit defining a Soviet-style C1 + C2 resource of 1.5Mt @ 9.83g/t Au. Gorubso later purchased the Chala mining concession through a management buyout in the late 1990's and mined base metals within Ekuzya (Target Zone 5a) before switching to gold mining at Chala in 1993.