VMS Ventures and operating partner HudBay Minerals to commence production at the Reed Mine in 2013

Jan 3, 2013

Summary of the Reed Mine’s Economic Assessment

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.
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.
Assumed metal recoveries in HudBay’s Flin Flon Concentrator of 94% copper, 58% gold and 62% silver.
Average production in concentrate of approximately 17,000 tonnes per year of copper metal.
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.
Sustaining capital expenditures are expected to total approximately $52 million over the five year mine life.
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.