Virgin Metals Inc.

Virgin Metals Inc.

March 27, 2007 09:25 ET

Virgin Metals Announces Bought Deal $6 Million Private Placement

TORONTO, ONTARIO--(Marketwire - March 27, 2007) - Virgin Metals Inc. (TSX VENTURE:VGM) ("Virgin Metals") is pleased to announce that it has entered into an agreement ("Agreement") with PowerOne Capital Markets Limited ("PowerOne") in which PowerOne has agreed to purchase, subject to certain conditions and with the right to substitute purchasers, a private placement of 12,000,000 equity units ("Units") at a price of $0.50 per Unit resulting in gross proceeds of $6,000,000 to Virgin Metals, prior to consideration of the Over-Allotment Option described below (the "Offering"). Each Unit will consist of one common share of Virgin Metals ("Common Share") and one-half of one common share purchase warrant ("Warrant"). One whole Warrant will entitle the holder to subscribe for one Common Share at $0.75 at any time until the date that is 24 months from closing.

Sprott Asset Management Inc. ("SAM"), or funds controlled or managed by SAM, will be purchasing part of the Units in this Offering.

The net proceeds of the Offering will be used to prepare a feasibility study for Virgin Metals' Los Verdes copper/molybdenum located in Sonora, Mexico, commence exploration work on the Cuatro Hermanos copper/molybdenum located in Sonora, Mexico and for general corporate purposes.

The Agreement and the Offering are subject to the receipt of all necessary approvals, including regulatory and stock exchange approvals. Closing is expected to occur on or about April 15, 2007 ("Closing").

Virgin Metals has agreed to pay PowerOne a commission equal to 6% of the aggregate gross proceeds and to issue 1,200,000 brokers' warrants to acquire Units ("Brokers' Unit Warrants") representing 10% of the number of Units issued under the Offering. One Brokers' Unit Warrant will entitle the holder to acquire one Unit for $0.50 at any time until the date that is 24 months from Closing.

Virgin Metals has also granted PowerOne an over-allotment option ("Over-Allotment Option") to place an additional 4,000,000 Units at $0.50 per Unit, which, if exercised in full, would result in additional gross proceeds to Virgin Metals of $2,000,000, at any time within 30 days after the Closing. If the Over-Allotment Option is exercised in full, PowerOne will be paid a commission equal to 6% of the gross proceeds of the Over-Allotment Option and 400,000 additional Broker Unit Warrants, representing 10% of the number of Units issued under the Over-Allotment Option.

All of the securities issued in connection with the Offering will be subject to a four month hold period from the date of issue.

Virgin Metals is a junior exploration and development company; its projects include two copper/molybdenum porphyry properties in Sonora, northern Mexico. One of these, Los Verdes, is expected to evolve rapidly towards production while the other, Cuatro Hermanos, is expected to be the focus of expanded exploration effort.


This press release includes certain "forward-looking information" within the meaning of the Securities Act (Ontario), including, but not limited to, statements as to timing and extent of exploration programs and the availability of exploration results. As such, forward-looking information addresses future events and conditions and so involves inherent risks and uncertainties, as disclosed under the heading "Risk Factors" and elsewhere in Virgin Metals documents filed from time to time with the Ontario Securities Commission and other regulatory authorities. Actual results could differ significantly from those currently projected as a result of, among those factors, adverse weather, regulatory changes, delays in receiving permits, accidents and delays in completing exploration activities not all of which are in the control of Virgin Metals. The forward-looking information contained herein is Virgin Metal's reasonable estimate today of future events and conditions, but no assurance can be given that such events or conditions will occur.

Shares Outstanding: 59,825,130

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