Virginia Mines Inc.
TSX : VGQ

Virginia Mines Inc.

February 18, 2010 15:39 ET

Virginia Mines Inc.: Update on Eleonore Gold Deposit Royalty

QUEBEC CITY, QUEBEC--(Marketwire - Feb. 18, 2010) - Virginia Mines Inc. ("Virginia") (TSX:VGQ) would like to update the resource calculation of the Eleonore project held by Goldcorp Inc.

On February 17, 2010, Goldcorp published a new grade and resource calculation on the Eleonore gold deposit, of which Virginia owns a 2.2% production royalty with actual gold price. Advance payments of US$100,000 per month began in April 2009.

Eleonore gold resource continues to grow in scope and quality; a pre-feasibility study is nearly complete to advance development. As of December 31, 2009, the deposit contained 3.15 million ounces of measured and indicated gold resources which represents 38% more from 2008 at an average grade of 11.92 grams per tonne and 6.25 million ounces of inferred gold resources which represents 106% more from 2008 at an average grade of 12.93 grams per tonne.

The royalty is highly enhanced with the current gold price and the new resource calculation suggests that Virginia's royalty could reach a value of over 3% NSR.

Goldcorp mineral resource calculation on Eleonore gold deposit:

Source: Goldcorp Inc.

Measured and Indicated Resources, as of December 31, 2009



GOLD million tonnes g Au/t million ounces
------------------------------------------------------------------------
Eleonore Canada 8.22 11.92 3.15


Inferred Resources, as of December 31, 2009



GOLD million tonnes g Au/t million ounces
------------------------------------------------------------------------
Eleonore Canada 15.03 12.93 6.25


Virginia's Royalty on Eleonore deposit



----------------------------------------------------------------------------
Royalty Price of Gold
Percentage
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-10% if price of gold less or equal to US$350 / oz
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if price of gold greater than US$350 / oz but less or equal to
-5% US$400 / oz
----------------------------------------------------------------------------
if price of gold greater than US$400 / oz but less or equal to
- US$450 / oz
----------------------------------------------------------------------------
if price of gold greater than US$450 / oz but less or equal to
+5% US$500 / oz
----------------------------------------------------------------------------
+10% if price of gold greater than US$500 / oz
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Royalty Ounces Produced from the Property
Percentage
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2% on the first 3 million oz
----------------------------------------------------------------------------
on the cumulative ounces produced between 3 million oz and 4
+ 0.25% million oz
----------------------------------------------------------------------------
+ 0.25% for every additional million ounces of gold produced
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About Virginia

Virginia is among the most active mining exploration companies in Quebec with a working capital of $43.5 million as at November 30, 2009, and 29,794,392 shares issued and outstanding as at January 15, 2010. Virginia trades on the Toronto Stock Exchange (TSX) under the ticker symbol VGQ. Virginia concentrates its activities on its numerous properties that are spread over the vast unexplored regions of northern Quebec.

Note to U.S. Investors

Cautionary Note to U.S. Investors concerning estimates of Measured and Indicated Resources: This press release uses the terms "measured and indicated resources". We advise U.S. investors that while these terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

Cautionary Note to U.S. Investors concerning estimates of Inferred Resources: This press release uses the term "inferred resources". We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally mineable.

Cautionary Note to U.S Investors -- The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this press releases, such as "measured," "indicated," and "inferred" "resources," that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our latest Annual Report on Form 40F, No. 000-29880, which may be secured from us, or from the SEC's website at http://www.sec.gov/edgar.shtml

This press release may also contain information about adjacent properties or other properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.

This press release may contain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to vary materially from targeted results. Such risks and uncertainties include those described from time to time in Virginia's periodic reports filed with the security commissions of British Columbia, Alberta, Ontario and Quebec, and in the annual report on Form 40-F filed with the U.S. Securities and Exchange Commission. Virginia undertakes no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

Contact Information

  • Virginia Mines Inc.
    Andre Gaumond
    President
    800-476-1853 or 418-694-9832
    418-694-9120 (FAX)
    or
    Virginia Mines Inc.
    Paul Archer
    V-P Exploration
    800-476-1853 or 418-694-9832
    418-694-9120 (FAX)
    or
    Virginia Mines Inc.
    Amelie Laliberte
    Investor Relations
    800-476-1853 or 418-694-9832
    418-694-9120 (FAX)
    www.virginia.qc.ca
    mines@virginia.qc.ca