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VVC EXPLORATION CORPORATION (“VVC” or the Company”) announces that its Chinese joint venture company, Tong Guan Glory Mining Corporation Limited (the “CJV”) reports its first revenues since the start its operations in July 2005. Production commenced in August 2005, following in which the CJV poured the first gold bars derived from its Xing Tong Gold Mine operations in the Shaanxi Province of the People`s Republic of China.
For the 3rd quarter ending October 31st 2005, as reported in our financial statements, the CJV recorded gross gold sales revenue of CAD$815,000 (5.5 million RMB) and a gross profit of CAD$490,000 (3.2 million RMB), from the Xing Tong operations. At as of November 30, 2005, cumulative gold production reached 2,727 ounces and additional gold sales revenues amounted to CAD$370,500 (2.54 million RMB) representing a net gain of $243,000 (1.67 million RMB) to the CJV for November. VVC is entitled to 60% of these amounts and upon completion of its capital contribution will have earned a 70% interest in the CJV.
Since August, the CJV has shown a constant growth of its gold production, principally from acquisition of new gold bearing veins already in production and from new discovery as well. The CJV is currently finalizing the development of two new veins, the Q24 and the Q237, which were recently discovered on two of its seventeen permits. Mining of these veins is schedule to start by mid January. The additional ore from these veins will supplement current production and permit the CJV’s mills to operate near the full capacity rate 450 tonnes per day. With sufficient additional increase in production the CJV will look to acquired new milling facilities later in 2006.
« At the start of the CJV, VVC was required to set-up new administration and production teams, as well as implementing new control over the day to day operations, and as such incurred one-time start-up expenses. In spite of those expenses, the CJV managed to generate significant cash flow, enough in fact to pay for the underground exploration and development of two recently discovered gold-bearing veins, Q24 and Q237, which will be in production in the days ahead. The rising price of gold and the steady growth of production combined with economies of scale over the coming months will start showing better profitability of our operation in China » stated Mr. Jean-Paul Boily, President and CEO of VVC.