Virginia Mines Inc.
TSX : VGQ

Virginia Mines Inc.

April 06, 2009 11:40 ET

Virginia to Receive its First Advance Payment of US$100,000 on the Eleonore Property

QUEBEC CITY, QUEBEC--(Marketwire - April 6, 2009) - Virginia Mines Inc. ("Virginia")(TSX:VGQ) is pleased to announce that it has received its first royalty advance payment of US$100,000 on the Eleonore project, owned by Les mines Opinaca, a subsidiary 100% owned by Goldcorp Inc. As per an agreement signed by both parties in March 2006, Virginia is entitled to advance payments on the royalty that it owns on the Eleonore deposit, on the basis of US$100,000 per month up to 50 months, unless production begins earlier, in which case the royalty payments will be paid in accordance with the quantity of gold produced.

Please note that Goldcorp announced, as of December 31, 2008, updated measured and indicated resources for its Eleonore property. Virginia owns a basic 2% sliding-scale royalty that varies both accordingly to the gold price and the amount of gold produced, as follows:



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Royalty % / Total Ounces Produced from the Property
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Royalty % Ounces Produced from the Property
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2.0% on the first 3 million oz
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+ 0.25% for every additional million ounces of gold produced for
a maximum of 3.5%
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Royalty Percentage / Price of Gold
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Sensitivity Price of gold US$
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-10% if price of gold less or equal to $350 / oz
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-5% if price of gold greater than $350 / oz but less or
equal to $400 / oz
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- if price of gold greater than $400 / oz but less or
equal to $450 / oz
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+5% if price of gold greater than $450 / oz but less or
equal to $500 / oz
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+10% if price of gold greater than $500 / oz
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For instance, after the first 4 million ounces, Virginia would receive, for each additional ounce of gold produced at an implied price of US $500 per ounce, a 2.75% royalty (using the following method of calculation: (2% + 0.25% + 0.25%) x 110% equal 2.75%. Note that at no time can the royalty exceed 3.5%.

These royalty payments will contribute to fund exploration work to be carried out by Virginia in Quebec's territory.

About Virginia

Virginia is among the most active mining exploration companies in Quebec with a working capital of $38.6 million as at November 30, 2008, and 29,201,776 shares issued and outstanding as at March 31, 2009. Virginia trades on the Toronto Stock Exchange (TSX) under the ticker symbol VGQ. Virginia concentrates its activities on its numerous properties that are spread over the vast unexplored regions of northern Quebec.

This press release may contain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to vary materially from targeted results. Such risks and uncertainties include those described from time to time in Virginia's periodic reports filed with the security commissions of British Columbia, Alberta, Ontario and Quebec, and in the annual report on Form 40-F filed with the U.S. Securities and Exchange Commission. Virginia undertakes no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

Contact Information

  • Virginia Mines Inc.
    Andre Gaumond
    President
    800-476-1853 or 418-694-9832
    418-694-9120 (FAX)
    or
    Virginia Mines Inc.
    Paul Archer
    V-P Exploration
    800-476-1853 or 418-694-9832
    418-694-9120 (FAX)
    or
    Virginia Mines Inc.
    Amelie Laliberte
    Investor Relations
    800-476-1853 or 418-694-9832
    418-694-9120 (FAX)
    www.virginia.qc.ca
    mines@virginia.qc.ca