Vancouver, B.C., January 9, 2013. VMS Ventures Inc. (TSX-V:VMS) (“VMS Ventures” or the “Company”) is pleased to report on developments at the Reed copper project near Snow Lake, Manitoba. Reed is a high grade copper deposit scheduled to begin production in the fourth quarter of 2013. VMS Ventures owns 30% and is carried to production. HudBay Minerals (TSX: HBM, NYSE: HBM) (“Hudbay”) owns 70% and is the Operator.
VMS Ventures COO Neil Richardson, states: "Important progress was made over the last quarter of 2012 with the completion of necessary infrastructure for underground development. We are particularly pleased that the Reed project has completed much of the difficult near surface phase of underground work, including the completion of approximately 72 metres of lateral development in 2012.”
Summary of the Reed Mine’s Economic Assessment
ü Initial production at Reed is expected by Q 4 - 2013 and will ramp up to full production of approximately 1,300 tonnes per day by Q1 - 2014.
ü Average expected reserve ore grades of 3.83% copper, 0.48 g/t gold and 6.02 g/t silver, slightly better than PEA due to the exclusion of the inferred resources in the pre-feasibility study.
ü Assumed metal recoveries in HudBay’s Flin Flon Concentrator of 94% copper, 58% gold and 62% silver.
ü Average production in concentrate of approximately 17,000 tonnes per year of copper metal.
ü Total operating costs estimated to average approximately $90 per tonne milled ($67 per tonne mining, $16 per tonne milling and $7 per tonne administration) over a five year mine life.
ü Sustaining capital expenditures are expected to total approximately $52 million over the five year mine life.
ü Pre-Feasibility pre-tax NPV (8%) of $57.4 million using weighted average metal prices of US$2.95/lb. for copper, US$1,269.09/oz. for gold and US$24.78/oz. for silver.