Virgin Metals Inc.
TSX VENTURE : VGM

Virgin Metals Inc.

February 15, 2011 08:00 ET

Virgin Metals Inc.: Confirms Resource Estimate for Los Verdes Project

TORONTO, ONTARIO--(Marketwire - Feb. 15, 2011) - Virgin Metals Inc. (TSX VENTURE:VGM) is pleased to announce the completion of a resource estimate prepared by Golder Associates Ltd. for the 100% owned Los Verdes Copper-Molybdenum deposit in Sonora Mexico. This estimate has confirmed the results used as the basis for the company's 2008 pre-feasibility study and has quantified the tungsten and silver values not included in the 2008 report.

"With an in-situ value approaching $100 per tonne and a copper equivalent grade of 1.5%, Los Verdes may well represent one of the highest grade copper projects presently under development", said Darren Koningen Vice President Technical Services of Virgin. "As we move deeper into our review, we see increasing opportunity to substantially enhance this projects profit potential".

Highlights:

  • Average resource grades of 0.61% Cu (copper) and 0.12% Mo (molybdenum) have been confirmed using an in-situ metal cutoff value of US$25 per tonne. This cutoff is similar to the 0.03% Mo equivalent utilized for the original study (Technical Report – Prefeasibility Study Los Verdes Project, TMG/CAM/MQES, September 2008);
  • The resource now also incorporates metal values of 0.07% W (tungsten) and 5 g/t Ag (silver) that were not included in the previous study;
  • Utilizing long term pricing of US$3.00 per pound Cu, US$15 per pound Mo, US$10 per pound W and US$20 per ounce Ag, the updated in-situ metal value for Los Verdes has been calculated as approximately US$98 per tonne with a copper equivalent grade of 1.5%;
  • Measured and Indicated resources of approximately 8,400,000 tonnes containing 113 million lbs. Cu, 22 million lbs. Mo, 13 million lbs W and 1.3 million ounces Ag;
  • The opening spot prices this month for these metals were US$4.52 per pound Cu, US$17.40 per pound Mo, US$19.25 per pound W and US$28.02 per ounce Ag.

The company is currently reviewing the property's pre-feasibility report with the objective of identifying and quantifying additional opportunities to improve the economics of the project. Areas currently under review include:

  1. Quantifying the extent to which the additional W and Ag contained metal value can be recovered as part of salable concentrates.
  2. Examining the potential for recovery of metals (Mo, W, Ag) contained in the layer of oxide rock overlying the main Los Verdes sulphide resource. This potential resource represents an additional 10-20% of in-situ value that is currently excluded from mining plans and assumed to be waste rock;
  3. Optimization of metallurgical processing methods in order to maximize payable metal values ; and
  4. Sourcing lower cost approaches such as contract mining and crushing to significantly reduce the necessary capital expenditures for the project.

Los Verdes

The Los Verdes property is a historic molybdenum producer, which was extensively drilled in the 1970s. Repetition and expansion of that drilling by Virgin in 2006 and 2007 resulted in the completion of a pre-feasibility study in 2008. That pre-feasibility study demonstrated, in considerable detail, a robust project based on molybdenum and copper recovery only; upside exists in tungsten and silver recovery as well as in improved molybdenum recovery.

The Los Verdes project is made up of 15 contiguous titled exploration concessions, covering 5,559 hectares. It lies within what could be considered the southerly extension of the Basin and Range province of the southwestern USA, near the boundary with the Sierra Madre Occidental province.

The Los Verdes resource comprises a modest sized, compact zone of molybdenum, copper and tungsten mineralization located at the crest of a steep ridge. The geometry of the deposit is ideal for low cost open pit mining. During 2007, the Company consolidated the mineral rights of the deposit by acquiring a single isolated claim known as the Bacanora claim. Until this point, the Company's drilling and subsequent resource estimation had been limited to the area east of the Bacanora.

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 currently the subject of a pre-feasibility study while the other, Cuatro Hermanos, is the focus of ongoing exploration efforts.

Darren Koningen P.Eng., is the Qualified Person responsible for technical content of this release.

Greg Greenough, P.Geo., is the Golder Associates Ltd. Qualified Person responsible for the preparation of this resource estimate.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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