VMS Ventures Inc. is a well financed, publicly traded mineral exploration company listed on the Toronto Venture Exchange (TSX.V) under the symbol VMS.
VMS Ventures Inc. is focused primarily on acquiring, exploring and developing copper-zinc-gold-silver massive sulphide deposits in the Flin Flon-Snow Lake VMS Belt of Manitoba. The Company's VMS project property portfolio consists of the Reed Copper Project, McClarty Lake Project, Sails Lake Project, Puella Bay Project and Morton Lake Project. Outside of the Snow Lake camp, the Company holds massive sulphide prospective properties near the past producing Fox Lake and Ruttan copper-zinc mines, near the communities of Lynn Lake and Leaf Rapids in northern Manitoba. These properties are located in the mining friendly province of Manitoba, Canada. The Company also has optioned three properties in the Sudbury mining camp. They are Terra Incognita, Golden Pine and Black Creek.
In October, 2007 VMS announced its Reed Lake Discovery Hole intercept of 43.05 metres of 4.38% copper, 1.56% zinc, 0.85 grams per tonne gold and 13.09 grams per tonne silver, including 10 metres of 11.19% copper. 73 holes were drilled through September, 2008 including hole #RD-08-41 which included 33.46 meters of 10.36% Copper, including 18.08 meters of 13.80% copper.
On July 6, 2010, VMS announced a joint venture agreement with Hudbay Minerals (TSX: HBM) to develop the Reed Lake property and the two claims immediately to the south. VMS has a 30% carried interest and HudBay has a 70% interest and will act as the operator of the joint venture. HudBay began drilling at Reed Lake in late August, 2010 and plans a 43-101 resource estimate before the end of Q1 2011 - NI 43-101 MINERAL RESOURCE FOR THE REED LAKE DEPOSIT AT 2.55 MILLION TONNES @ 4.52% COPPER IN THE INDICATED CATEGORY
The Manitoba government has approved the Reed Copper Advanced Exploration Permit ("AEP") closure plan and issued the lease of park land property for the operation of the mine development activities. The AEP allows the extraction of a 10,000 tonne bulk sample and will provide confirmation of the mineralized widths, metal grades and the conditions of the ground. Testing of the extracted bulk sample will be done in the Flin Flon metallurgical complex. Site preparation will begin in Q1 and the decline will commence in the second half of 2012.
VMS Ventures owns approximately 45% of North American Nickel Inc. (TSX VENTURE:NAN)
VMS Ventures Inc. is updating shareholders on the performance of the Reed mine to the end of September, 2014. VMS Ventures owns 30 per cent, and HudBay Minerals Inc. owns 70 per cent and is the operator. Management has reviewed the Reed mine financial report received from joint venture partner HudBay.
Reed mine third quarter production
During the third quarter of 2014, the Reed mine produced 109,562 tonnes of ore at a copper grade of 2.23 per cent and a zinc grade of 1.79 per cent from a combination of ore development and long-hole stope mining. Year to date, as of the end of September, Reed has produced a total of 296,392 tonnes of ore.
Financial information (as of Sept. 30, 2014)
The attached financial information for the Reed mine was provided to the company by HudBay as part of its joint venture reporting obligations.
SUMMARY OF FINANCIAL RESULTS
|Final VMS portion of ore sales
||April to June, 2014
|VMS portion of production costs
|| April to June, 2014
||July to September, 2014
|| $ 3,531,452
|Reduced the contribution loan
||To the end of september, 2014
||To the end of September, 2014
The company reports monthly provisional ore sales and production costs based on reporting requirements from HudBay. Since the start of commercial production on April 1, 2014, the company has reported provisional ore sales and production costs as indicated in its financial statements ending May 31, 2014, and disclosed on July 30, 2014. The process in which the company discloses or receives final ore sales from HudBay is generally 100 days after the shipment of concentrate. Therefore, the net proceeds, being final ore sales less the current-period production costs, will be disclosed in the subsequent quarter. Those net proceeds will reduce the contribution loan.
The company is in receipt of the first net proceeds results, which were generated from final ore sales for April to June, 2014, of $4,836,025 less the current-period production costs for July to September, 2014, of $3,531,452 for net proceeds of $1,304,572. This was the first reduction on the contribution loan leaving the balance owing at Sept. 30, 2014, at $22,436,991.
Since there is a 100-day delay from the time of shipping concentrate to the final sale of ore, the production costs during the period from April to June, 2014, were covered by HudBay with a loan agreement effective April 1, 2014. HudBay has agreed to advance funds subject to a maximum of $3.95-million at an 8-per-cent annual interest rate. As of Sept. 30, 2014, the bridge loan was $3,475,546, which is a result of April to June, 2014, production costs of $3,348,131 and interest of $127,415. Repayment of the loan does not take place until the contribution loan has been paid back.
The working capital of $3,867,858 indicates the position of VMS Ventures only, which represents the company's share of the current available assets for day-to-day operations.
Neil Richardson, chief operating officer, stated: "We are pleased with the performance of the mine over its first two quarters of commercial production. As commercial production commenced at the Reed mine on April 1, 2014, the company recorded an amount of $23,741,563 as a contribution loan owing to HudBay for 30 per cent of the applicable development costs as well as other amounts due, pursuant to the Reed Lake project joint venture agreement. The loan will be repaid by offsetting amounts owed to the company from the sale of 30 per cent of the Reed mine ore, after payment of VMS Ventures' proportionate share of operating expenses. The reductions on the loan will be based and reported on the expected timing of ore purchases, generally up to 100 days after shipment of concentrate."
All technical information in this release has been reviewed by Dr. Mark Fedikow, PGeo, who is the qualified person for the company, and vice-president of exploration and technical services, VMS Ventures.