Based out of Toronto, Canada, Virgin Metals Inc. (TSXV: VGM) is an exploration and development company advancing copper focused projects in Sonora State, Mexico, by systematically exploring and developing the Company’s primary assets: the Los Verdes and Cuatro Hermanos deposits. The current focus is to update the Los Verdes Pre-Feasibility study while increasing the M+I resources in the Company’s portfolio. Long‐term, Virgin Metals seeks to develop one or more profitable operating copper mines in Mexico.
Read Virgin Metal's Article in CHF Spotlight, Issue No. 82
Read Virgin Metal's Article in CHF Spotlight, Issue No. 72
Near-Term Value Creation
Virgin Metals’ successful exploration programs have led the Company to pre-feasibility stage at its Los Verdes/Potreritos copper-dominated property in Mexico.
Construction work could start by 2014, following the completion of a pre-feasibility study.
The Preliminary Economic Assessment (PEA) for Los Verdes reports the following:
- Capital costs: $107 million
- Pre-Tax net cash flow: $163 million
- NPV (discount at 5%): $113 million
- IRR: 34%
- Mine life: 7 years
- Payback period: 2.7 years
The open pit mine would produce 3,000 tonnes per day at cash costs of $0.73/lb CuEq, assuming a metallurgic recovery rate of 85% for copper/molybdenum/silver.
Further expansion of resources provides for upside and potential to extend the mine’s life.
Los Verdes/Potreritos Project
Los Verdes - 100%-owned, Near‐Production
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 of Mexico. The Los Verdes resource comprises a compact zone of molybdenum, copper, silver and tungsten mineralization located at the crest of a steep ridge. The geometry of the deposit is ideal for low cost open pit mining.
2012 Preliminary Economic Assessment:
Pre-Tax Net Cash Flows $163,000,000
Net Present Value (5%) $113,000,000
Internal Rate of Return 34%
Mine Life 7 years
Payback 2.7 years
PROVEN & PROBABLE RESERVES (Updated Feb. 2011)
(non-oxide) 7,000,000 tonnes
Contained Copper 103,000,000 lb @ 0.67%
Contained Molybdenum 20,000,000 lb @ 0.13%
Contained Silver 1,090,000 oz @ 4.85 g/t
Contained Tungsten 8,000,000 lb @ 0.08%
COPPER EQUIVALENT ORE GRADE 1.70% CUEQ
Metal Prices Used:
Cuatro Hermanos Project
Cuatro Hermanos - 100% Owned, NI 43-101 Defined Resource
The Cuatro Hermanos project in Mexico currently holds an inferred copper/molybdenum/silver resource of 557 million tonnes of 0.4% copper equivalent at a cut-off grade of 0.25%, using a 10:1 molybdenum to copper equivalent ratio.
Virgin Metals seeks to quantify the potential for high-grade resource expansion on this property. The adjacent San Lorenzo property also holds potential that has yet to be unveiled.
NI 43-101 Resources
(Chlumsky, Armbrust & Meyer, LLC - Sep. 2008)
RESOURCES INFERRED INDICATED
(cut-off 0.25% Cu)
Tonnes 557 Million 206 Million
Copper grade 0.174% Cu 0.197% Cu
Molybdenum grade 0.022% Mo 0.021% Mo
Silver (add’l credits) 1.1 g/t Ag 1.5 g/t Ag
Copper equivalent* 0.4% CuEq 0.407% CuEq
Contained Cu: 2.1 B lb 896 M lb
Contained Mo: 278 M lb 96 M lb
*CuEq as 10:1 molybdenum to copper ratio.
Acquisiton of Courtland Hill in Arizona
The Courland Hill Copper Project is an advanced exploration stage asset situated in the prolific Turquoise mining district of southern Arizona, an area that produced nearly 50 million lbs of copper at a recoverable grade of 1.57% up until the early 1930’s.
Internal calculations from previous owners have determined resource estimates of over 120 million lbs of Cu at a grade of 0.59%.
(Note: The historical resource estimate for Courtland Hill was prepared by previous property owners. A qualified person has not done sufficient work to classify them as current mineral resources or mineral reserves and the Company is not treating the historical resource as current resources or reserves.)
CHRIS FROSTAD, BBA, CA President & CEO, 30 years’ experience with public and private companies. Chris is also the CEO of Purepoint Uranium Group Inc. (TSXV: PTU).
DARREN KONINGEN, P.ENG VP Technical Services and Director, former VP Project Development for Castle Gold.
FEDERICO ALVAREZ, VP Project Development, former VP Operations for Argonaut Gold Inc. (bought Castle Gold).
MIGUEL CARDONA, Senior Geologist, previous Exploration Manager for Castle Gold.