Virgin Metals Inc.
TSX VENTURE : VGM

Virgin Metals Inc.

May 18, 2011 08:00 ET

Virgin Metals Inc.: Phase 1 Metallurgical Results Complete for Los Verdes Project

TORONTO, ONTARIO--(Marketwire - May 18, 2011) - Virgin Metals Inc. (TSX VENTURE:VGM) is pleased to report positive preliminary metallurgical results for its wholly-owned Los Verdes Project located in Sonora Mexico. The successful testwork, performed by SGS Lakefield Research Ltd., offers the potential for significant improvements to the recovery and marketability assumptions for the final concentrates as outlined in the projects existing Pre-Feasibility Report (2008).

"Completing this phase of metallurgical testing has been a key requirement in moving this project forward" said Darren Koningen, Vice President Technical Services. "The original report left a number of unanswered questions resulting in a very flexible and expensive approach to the plant design. With these new results, we can reexamine many aspects of the project in an effort to significantly improvement its overall economics"

Highlights

  • Testwork completed to date has demonstrated copper and molybdeum recoveries of just less than 90% (percent recovered to final concentrate);

  • Minor refinements to the newly developed process flowsheet are to be tested in Phase 2 of the program and offer the potential to increase these recoveries to in excess of 90%;.

  • Flowsheet developments have eliminated issues related to the presence of clays (sericite) in the Los Verdes ore and have allowed for the consistent production of high grade copper concentrates that contain in excess of 30% copper.

  • Previous testwork (prior to 2008 Pre-Feasibility Study) demonstrated the amenability of the Los Verdes ore to the production of high grade (+55%) molybdenum concentrates.

  • Silver appears to report to the copper concentrate as a payable byproduct. A definitive reporting of silver recoveries is planned as part of Phase 2 of the metallurgical work.

Prior to the initiation of the Phase 1 metallurgical program for the Los Verdes project, the entire Virgin Metals exploration database (2006/7 drill program) was reevaluated and relogged as part of an effort to produce a more coherent understanding of the geological structure of the deposit. In addition a number of samples from various parts of the deposit were subjected to detailed mineralogical studies (QEMM) in order to provide complete details of the individual minerals contained in the rock.

As a result of these early efforts it was determined that the Los Verdes deposit is simpler in geologic structure than was previously understood with 70-80% of the metal resource being contained within a fairly consistent enriched zone of weathered rock which contains molybdenite, pyrite and a series of primarily secondary copper minerals (bornite, covellite, chalcocite). From this area a representative composite was produced and used as the basis for the Phase 1 metallurgical program. As part of Phase 2, additional samples from some of the other "outlier" areas of the resource will also be tested to determine what modifications may be required to ensure that the final process flowsheet is sufficiently robust so as to accommodate any expected variability that may be encountered during mining operations.

The completion of the Phase 1 metallurgical program has addressed most of the remaining metallurgical questions contained in the recommendations from the 2008 Pre-Feasibility study. The company is now in the process of fully evaluating the impact of the new process flowsheet on the overall project engineering and economics. Phase 2 of the metallurgical program is currently underway and will include:

  • Final optimizations to the current flowsheet to fine tune metal recoveries

  • Variability testing of the flowsheet to examine the impact of material contained outside of the main resource area.

  • Production of quantities of final cleaned copper and molybdenum concentrates to be sent to downstream processing facilities for evaluation

  • Additional testwork to examine the processing of material from areas of the deposit containing higher concentrations of tungsten to examine the potential for economic extraction of that metal.

  • Testwork to investigate the potential for metal recovery from the surface "oxide" zone located above the current mineable resource which is presently treated as waste material only in the mining plans.

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.

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