High flying Ventana in dispute over key gold property and in acquisition talks

The top performing gold exploration stock on the TSX, Ventana Gold, says it is in talks which could lead to its acquisition - and is also involved in what it says is a spurious legal dispute over its flagship La Bodega gold property.

LONDON - 

Ventana Gold Corp. (TSX:VEN), probably the gold stock which has appreciated the most of all over the past 12 months with a 10,000% increase - lucky is the investor who put a few thousand dollars into this stock 12 months ago - (see Barry Sergeant's article Gold: the haves and the have-nots of a week ago), is facing what is hopefully a little local difficulty with regard to its La Bodega gold project in Colombia which has been responsible for the stock's meteoric rise.

Ventana's local subsidiary - CVS Explorations - which has optioned the property from the Colombian owner of the mineral rights, Soc. Minera La Bodega, is facing arbitration on the option agreement instituted by the rights owner, no doubt because of the success in delineating a significant giold resource on the property.  While CVS has followed the terms of the option agreement to the letter, says Ventana, the payment of the final installment of $3 million, which is not due until February next year, has been refused by the rights owner when the company attempted to pay it early on November 20^th.  According to Ventana, the vendor's request for arbitration is based on arguments that the Option Agreement fails to comply with applicable Colombian law and the Vendor has refused to abide by the terms of the Option Agreement.

Obviously Ventana is disputing this and has taken legal advice locally that suggests there is no merit in the vendor's claim.  Ventana President and CEO Steve Orr said: "We believe this is an attempt to obtain more money for the mineral rights now that we have substantially increased the value of the property through our exploration success. There have been no changes to the mining laws and there are no government agencies involved in the dispute. We are confident in the integrity of the regulatory system and the application of justice in Colombia. Ventana has all the necessary permits in place to continue exploration and technical work on the property and the Vendor cannot legally stop Ventana from doing further work on the property."

The share price has taken a knock on this news - the market is perhaps wary of the fate of some other Canadian juniors working in Latin America and facing local legal disputes, although Colombia is not notorious for being prone to these kinds of problems as it is not politically hostile to North American concerns.

The gold discovery the fuss is all about is the La Bodega project which covers 863 hectares in the historic California-Vetas gold mining district of northeastern Colombia. La Bodega is immediately adjacent to the 11.55 million ounce Angostura gold/silver property which is being explored by Greystar resources and on which a very positive pre-feasibility study was completed earlier this year.

Ventana first acquired an interest in the La Bodega project in 2006. The initial drill hole - which proved to be the discovery hole - encountered 107 metres grading 7.8 grams per tonne gold. Since that time Ventana has completed 160 holes totalling more than 45,000 metres. Of these, 152 have been released. The Company is currently drilling with 10 rigs on the property. 

Mineralisation at La Bodega occurs as a series of north-northwest-dipping parallel-sheeted vein zones, breccias and mineralized faults hosted within a broad, northeast trending regional fault zone. Drilling to date has concentrated on defining the northeast-trending gold mineralization present along 1,350 metres of strike length with estimated true composite widths of 20 to 80 metres and to a maximum drilled depth of 400 metres. Mineralisation remains open to further expansion in several directions and other, nearby drill targets have been developed as a result of ongoing exploration.

While news of the legal action being taken was the principal topic of Friday's news release, in a throwaway line at the end Ventana stated "In addition, Ventana also announces that it is in advanced discussions which could result in the acquisition of the Company by a third party."  No further details were given.

According to a Bloomberg report, Ventana's CEO, Steve Orr, said that the legal dispute over mineral rights was unrelated to the talks that may lead to the company's sale, while refusing to name the other party or parties involved.

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