Virgin Metals Inc.

Virgin Metals Inc.

January 17, 2006 14:50 ET

Virgin Metals Inc. Announces Financing in Conjunction with Proposed Listing on the TSX Venture Exchange

TORONTO, ONTARIO--(CCNMatthews - Jan. 17, 2006) - Virgin Metals Inc. ("Virgin Metals") is pleased to announce that it has entered into an engagement letter with Northern Securities Inc. (the "Agent") for an offering (the "Offering") of up to 9,000,000 subscription receipts ("Subscription Receipts") at a price of $0.45 per Subscription Receipt for gross proceeds of up to $4,050,000.

Upon the satisfaction of certain conditions, each Subscription Receipt will be exchanged for one common share (a "Unit Share") of Virgin Metals and one-half of one common share purchase warrant (a "Warrant"), each whole Warrant being exercisable for one common share of Virgin Metals at an exercise price of $0.60 for a period of 24 months from closing. The Agent may increase the size of the Offering by an additional 2,250,000 Subscription Receipts by exercising an option within sixty days of closing of the Offering.

Virgin Metals is in the process of applying to the TSX Venture Exchange for approval of the listing of its common shares. In the event that Virgin Metals does not obtain conditional approval for listing of its common shares on the TSX Venture Exchange by the date which is four months from the closing of the Offering, each Subscription Receipt will be exchangeable for 1.1 Unit Share and 0.66 Warrant. In the event that Virgin Metals does not obtain conditional approval for listing of its common shares on the TSX Venture Exchange by June 30, 2006, holders of the Subscription Receipts will be entitled to a return of the subscription price, unless holders of the Subscription Receipts have provided notice to the escrow agent for the Subscription Receipts by June 1, 2006 that it is waiving the deadline of June 30, 2006, in which case if Virgin Metals does not obtain conditional approval for listing of its common shares on the TSX Venture Exchange by July 31, 2006, holders of Subscription Receipts will be entitled to a return of the subscription price.

The Offering of Subscription Receipts is expected to close on or about February 28, 2006. Completion of the Offering is subject to, among other things, the completion of satisfactory due diligence.

Proceeds of the financing will be used to finance exploration of the Company's Los Verdes property located in the Province of Sonora, Mexico and to fund exploration on other resource properties the Company may pursue in the future as well as for general corporate purposes.

FORWARD-LOOKING STATEMENTS

This press release includes certain "forward-looking information" within the meaning of the Securities Act (Ontario). All statements regarding the private placement, use of proceeds, the anticipated closing dates and the application to the TSX Venture Exchange are forward-looking statements that involve various risks and uncertainties. There can be no assurance that the private placement will be completed or that the transactions will close on the dates anticipated or that the common shares of Virgin Metals will ever be listed on the TSX Venture Exchange. Important factors that could cause actual results to differ materially from these forward-looking statements include: the failure to close the private placement; the failure to receive the requisite approvals from the TSX Venture Exchange and other factors 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.

Contact Information

  • Virgin Metals Inc.
    Chris Berlet
    (416) 364-9988