Virgin Metals Inc.
TSX VENTURE : VGM

Virgin Metals Inc.

December 20, 2011 08:00 ET

Virgin Metals Updates the Los Verdes Plan & Schedule

TORONTO, ONTARIO--(Marketwire - Dec. 20, 2011) - Virgin Metals Inc. (TSX VENTURE:VGM), following the recent successful acquisition of Potreritos, announced today their updated plan and development schedule for the Company's contiguous and consolidated Los Verdes project.

"The material economic improvement resulting from our recent acquisition of the Potreritos project requires an adjustment to our schedule in order to accommodate its additional resources into the pre-feasibility study," said Chris Frostad, President and CEO, Virgin Metals Inc.

Preliminary Economic Assessment

On January 10, 2012, the Company will release a new Preliminary Economic Assessment for Los Verdes incorporating:

  • The new Los Verdes resource estimate;
  • Historic Potreritos resource estimates;
  • Updated commodity prices;
  • Recently finalized metallurgical analysis;
  • Newly developed capital expenditures based on a detailed metallurgical simulation and plant engineering design; and
  • A sensitivity analysis demonstrating the potential impact of the Potreritos acquisition as well as other identified economic opportunities.

Pre-Feasibility Study

The Company also intends to update the Los Verdes Pre-Feasibility Study in Q3 of 2012 following completion of the following steps:

  • Execute additional work at Potreritos to upgrade the historic resources with a view to incorporating them in the pre-feasibility study;
  • Due to the expanded plant site, revise existing permits for submission in early 2012;
  • Conclude negotiations with the private land owners which own the majority of the surface rights at Potreritos. In addition, surface agreements with the community of Santa Ana Yecora (incorporating the expanded plant site) are expected to be finalized by the end of Q1 2012;
  • Complete plans for the delivery of electricity to the plant site with local utilities (discussions currently underway);
  • Review the contracted independent engineering report with a view to validating and completing the various components of the final pre-feasibility report for completion.

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 improvements in copper and molybdenum recoveries.

In September 2011, the neighbouring Potreritos property was acquired and added to the project. Potreritos contains the workings of two historic mining operations (Buenavista and La Providencia) and is in close proximity to Virgin Metals Los Verdes project. During the 1960s and 1970s the Buenavista and Tres Piedras (now La Providencia) deposits were operated by Minera Galaviz, SA de CV which constructed a flotation plant in the area to recover copper and molybdenum. The two deposits are located in close proximity to each other (approx. 200 m) and may be part of the same geological system. Historical copper and molybdenum concentrations in the rock from the deposits at Potreritos are similar to those expected at Los Verdes.

The Los Verdes/Potreritos project is made up of 17 titled exploration concessions, covering 6,629 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.

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.

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