Virgin Metals Inc.
TSX VENTURE : VGM

Virgin Metals Inc.

April 12, 2011 10:02 ET

Virgin Metals Inc.: Updates Progress at Los Verdes Project

TORONTO, ONTARIO--(Marketwire - April 12, 2011) - Virgin Metals Inc. (TSX VENTURE:VGM) today released an update on the activities currently underway at the 100% owned Los Verdes Copper-Molybdenum deposit in Sonora Mexico. The announcement specifically addresses progress on the analysis of the metallurgical processing methods, the acquisition of required surface rights and the updating of water and environmental permits.

"It is important for investors to remember that the 2008 Los Verdes Pre-Feasibility report supported a project pre-tax net present value of $97 million or $2.99 per share" said Chris Frostad, Virgin's President & CEO. "It remains our objective this year not only to confirm those economics but to identify opportunities to significantly enhance them".

Highlights:
  • Recent results (SGS Lakefield Research) have demonstrated the potential for recoveries are in excess of 90% for both molybdenum and copper from the Los Verdes ore into salable metal concentrates;
  • The entire Phase 1 work program is aimed to be completed by the end of May with a process flowsheet suitable for final engineering evaluations;
  • Discussions with the community local to Los Verdes (Ejido Santa Anna Yecora) are ongoing with the objective of entering into a new, long-term surface rights agreement with that community by Q3 2011;
  • The Company has received preliminary confirmation that the 2008 work performed on environmental and water permits remains valid and activities are now underway to update and finalize the issuance of these permits anticipated in Q3 2011.;
  • The review and confirmation of the Los Verdes Pre-Feasibility Study continues to proceed on plan. As these tasks progress, Virgin continues to anticipate the issuance of the fully confirmed and reviewed Los Verdes Pre-Feasibility Report and production plan in Q4 of this year.

The company continues to receive positive results from its ongoing metallurgical program aimed at optimizing metal recoveries from the Los Verdes deposit. As noted above, recent results have demonstrated the potential for recoveries in excess of 90% for both molybdenum and copper from the ore composite sample into salable metal concentrates. The process flowsheet that has been developed overcomes the limitations identified previously in the project's prefeasibility study (2008) and produces consistently high grade copper concentrates approaching 30% contained copper. The current program which is intended to further demonstrate the stability of the new process is aimed to be completed later this month. Following that some additional testing will be completed to examine the impact of variations in the global ore reserve composition.

The net present value of the 2008 Pre-Feasibility Report does not necessarily represent the fair market value of the property.

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.

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

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