Virgin Metals Inc.

Virgin Metals Inc.

July 10, 2008 10:34 ET

Virgin Metals Announces Mineral Resource at Cuatro Hermanos

TORONTO, ONTARIO--(Marketwire - July 10, 2008) - Virgin Metals Inc. ("Virgin Metals" or the "Company") (TSX:VGM) announces that its consultants, Chlumsky Armbrust and Meyer, LLC ("CAM") have completed a NI 43-101 compliant resource estimate for the contiguous areas known as the Main and Sulfate zones at the company's 100%-owned Cuatro Hermanos porphyry copper-molybdenum project located in Sonora, northern Mexico.

The Resource calculation is based on the results of 22 reverse circulation holes (CHRC 01 to 16 and CHRC 21 to 26) drilled by Virgin Metals during 2007 and early 2008, together with 6 historic holes drilled by various previous operators that explored the property, including Occidental Minerals and Amoco Minerals. The historic drilling results have been validated by CAM using statistical methods. The holes used in the resource calculation cover an area of 1,650 m in a north-south direction by 1,100 m in an east-west direction. Virgin Metals RC holes were targeted to depths of 300 m, but not all holes reached this depth due to mechanical, water or geotechnical issues. A map showing the location of the drill holes, along with other information about the Company and its projects is available at:

The area is underlain by a quartz diorite porphyry and diorite porphyry exhibiting moderate to strong phyllic alteration with local intervals of potassic alteration at depth. Mineralization appears to be associated with both disseminated and veinlet sulfides containing concentrations of copper and molybdenum. Many of the drill holes end in mineralization, and some of these indicate that grade is increasing at depth; consequently the vertical range of the mineralizing system is largely undefined. The area of porphyry style mineralization defined by drilling appears to be open to the east and to the west in the southern part of the zone.

The following tabulation reports Mineral Resources at a cut off grade of 0.25% copper equivalent, where copper equivalent is based on a 10:1 value ratio between molybdenum and copper.

% Cu Con- Con-
Equi- Ag tained tained
Tonnes % Cu % Mo va- (g/t) Cu (lbs) Mo (lbs)
ces 206,262,000 0.197 0.021 0.407 1.5 896,008,000 95,660,000
ces 557,510,000 0.174 0.022 0.400 1.1 2,141,553,000 277,993,000

The Mineral Resources in this estimate were calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council on Dec 11, 2005.

Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing or other relevant issues.

The quantity and grade of reported Inferred Resources are conceptual in nature, and it is uncertain if further exploration will result in the conversion of Inferred Resources to Indicated or Measured Mineral Resources.

The estimates above were prepared by Qualified Person Robert Sandefur, P.E., of Chlumsky Armbrust and Meyer, LLC. The contents of this press release have been reviewed and approved by the Company's Qualified Person, Mr. John Spurney.

Virgin Metals CEO Chris Davie commented: "These results demonstrate the enormous size of this system. Previous drilling indicated that this might be the case, but drill spacing was too great to calculate a Resource. The area underlain by this Resource is a relatively small part of the area known to be underlain by porphyry-style mineralization, which has been noted over an area of about 4.5 km x 2.5 km. In addition to the area in which the Resource was estimated, four holes were drilled about 1.8 kilometers to the west, encountering similar mineralization; historic holes between the two areas also show similar mineralization under the topographic high of Cerro San Felipe."

Samples of drill cuttings at Cuatro Hermanos were collected at 1.52 m (5 ft.) intervals, and reduced in size whenever necessary to 3 to 4 kg using a Jones riffle splitter. Plastic sample bags were immediately sealed on-site using pre-numbered security tags. The samples were stored securely for a short time at the Company's field office near the project, until they could be transported by Company personnel to ALS Chemex's sample preparation facility in Hermosillo. A duplicate pulp and the reject material for all samples are being stored securely for possible future use. Assays were carried out at ALS Chemex's ISO 9001-2000 certified laboratory in Vancouver, Canada. Virgin Metals has incorporated quality control measures for the analytical work including the insertion of standards, blanks, and duplicate samples. Check assays were performed at Skyline Laboratories of Tucson.

The Resource model was composed of 15 m cubic blocks and is based on 15 m bench composites. The Resource was calculated using an inverse distance squared methodology. Search radii derived from variograms were 200 m in a north-south direction and vertically and 300 m in an east-west direction. A maximum of 12 composites and a minimum of 2 were required for estimation. Indicated Resources were limited to within 50 m and 100 m of a composite.

A Technical Report on this resource estimate will be available within 45 days.

The Company also announces that it has mobilized a diamond drill to Cuatro Hermanos. The objective of drilling will be to obtain geologic information not provided by reverse circulation drilling, to obtain data from a greater depth than possible by reverse circulation drilling, and to step out from the currently drilled areas.

In other news, the pre-feasibility study of the Los Verdes Molybdenum Copper project in Sonora is approaching completion and the Company expects to be able to announce results within the next two to three weeks.

About Virgin Metals

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 undergoing a feasibility study and is expected to evolve rapidly towards production while the other, Cuatro Hermanos, is presently the focus of an intense 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.

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