Today’s news release regarding the development of the Reed Copper Mine reiterates that Hudbay is serious about moving this project forward, quickly. The release announcing the Reed pre-feasibility study is below.

Our COO, Neil Richardson, was introduced to most of the mining team assigned to Reed by Hudbay at last week’s JV meeting in Winnipeg.  Neil, who worked for 13 years at Hudbay, is pleased the team is so experienced and is confident the plan is on track for Reed to be in production late next year.  And, that means cash flow for VMS will not be far behind.

Copper prices will tell us how quickly we will get to positive cash flow, and we will begin to look at that in more detail for you in the weeks and months ahead, but, for today we can report we are very pleased with Hudbay’s commitment to developing the new Reed Copper Mine.

Best regards,

Rick Mark
CEO
VMS Ventures Inc.

VMS owns ~45% of North American Nickel Inc.

REED COPPER PROJECT POSITIVE PRE-FEASIBILITY STUDY COMPLETED

Vancouver, B.C., April 2, 2012 - VMS Ventures Inc. (VMS: TSX-V) (“VMS” or the “Company”) is pleased to announce that Hudbay Minerals Inc. (HBM: TSX/NYSE) (“Hudbay”) has informed the Company that a NI 43-101 pre-feasibility study completed by Hudbay and Stantec Consulting Ltd. (North Bay, Ontario) outlined positive economics for the Reed Copper project.  VMS owns 30% of the Reed Copper project joint venture, which is operated by Hudbay and is located 120 km from Flin Flon, Manitoba.  According to Hudbay, first production is expected by Q3 - 2013.

VMS Ventures CEO, Rick Mark, remarked: “We are pleased with the results of the pre-feasibility study and how closely it compares to the PEA completed in December 2011.  This demonstrates the robust nature of the Reed deposit. First production in Q3 - 2013 is good news for VMS shareholders. We will continue to add value to the project by evaluating trade-off studies, not included in the pre-feasibility, with Hudbay’s mining team and remain optimistic about adding tonnage down dip at Reed. For those bullish on the copper price in 2014, and beyond, the cash flow projections are most encouraging.”

 A summary of the project’s economic assessment follows (100% basis):

·         Initial production at Reed is expected by Q3 – 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.

The comparison of the pre-feasibility and the PEA value is shown below, these changes mainly reflect the 170,000 tonnes of inferred resources that were not included in this study.  CLICK HERE TO READ MORE