UPDATE 2-Ventana settles Colombian dispute, shares jump

* Acquires rights to La Bodega and La Baja properties

* Dispute has weighed on gold explorer’s shares

* Stock rises 8 percent in Toronto
(Adds stock reaction and analyst comment. In U.S. dollars
unless noted)

By Cameron French

TORONTO, May 7 (BestGrowthStock) – Ventana Gold’s (VEN.TO: ) shares
jumped more than 8 percent on Friday after the company said it
had settled a dispute over ownership of a key gold deposit in
Colombia, and also acquired a neighboring property.

The Canadian gold miner became a market darling last year
when it released a succession of high-grade drilling results
from the La Bodega property in the northern part of Colombia.

However, its shares fell in November when the local owner
of the property filed for arbitration in the hopes of
reclaiming the rights to it. Ventana had been in the process of
acquiring ownership through a series of staged payments.

In its Friday statement, Ventana said it has signed
agreements to acquire the mineral and surface rights at both La
Bodega and the adjacent La Baja property. As part of the deal,
Ventana will pay $48 million and the arbitration will be
terminated, it said.

The La Baja property includes an operating mine and
processing plant.

“The agreement give us unencumbered access to an expanded
land package for continued exploration and development of this
prolific gold district,” Chief Executive Steve Orr said in a
statement.

Ventana has yet to delineate a resource on the property.

Analyst Michael Fowler of Loewen, Ondaatje, McCutcheon,
said the $48 million payment was much higher than the original
agreed payment on La Bodega.

“This is good news for the company, despite the high
payment,” he said in an e-mailed research note.

Canadian gold miners Greystar Resources (GSL.TO: ) and Galway
Resources (GWY.V: ) are also developing deposits in the same area
as La Bodega.

Greystar has been planning a mine at its Angostura
property, but ran into trouble last month when Colombian
authorities told it to redesign the project to conform with
regulations preventing developments that interfere with
sensitive high altitude ecosystems.

Ventana has said that La Bodega is at a lower altitude and
not in violation of the regulations.

The company’s shares, which rose more than 20-fold last
year, were up 82 Canadian cents at C$10.89 on the Toronto Stock
Exchange on Friday morning.

Some analysts have speculated that the Ventana, Greystar,
and Galway projects will eventually be combined and developed
together, particularly as cash-rich senior gold miners look to
add assets as gold prices soar.

Ventana said in November it was in talks that could results
in its sale to a third party. Orr told Reuters in April that
the company has seen interest from several gold majors.

Stock Market Research

($1=$1.04 Canadian)
(Reporting by Cameron French; editing by Rob Wilson)

UPDATE 2-Ventana settles Colombian dispute, shares jump