Shares Outstanding: 78,401,885
Update on Virgin Metals' Cuatro Hermanos Property
Toronto, ON - August 8, 2007 - Virgin Metals Inc. (TSX: VGM) ("Virgin Metals" or the "Company") gives the following update on activities and objectives at its 100% owned Cuatro Hermanos property in Sonora, northern Mexico.
Reverse circulation drilling is now under way at Cuatro Hermanos and, although first results are still some weeks away, the Company would like to provide for shareholders a geologic and historical context in which to view past and current mapping, drilling and surface sampling activities and a basis for our objectives and priorities. More details may be gained from the Technical Report on Cuatro Hermanos dated February 1st, 2006 by ACA Howe International Ltd. and posted on Sedar.
Historical Context:
An intermittent series of exploration campaigns over a period of nearly forty years, from which varying amounts of detail survive, has provided sufficient data to outline a porphyry system of substantial size, at least 4.5 square kilometers in extent, and open in most directions. Topography over most of this area is steep, comprising a significant ridge known as Cerro San Felipe, but flattens to the north. Overall drill spacing in the past has been of the order of 500m, but at least two campaigns have aimed at intensive drilling of potential shallow mineralization with limited success.
Two other areas of mineralization have been noted; surficial conglomerates both north and south of the ridge which contain oxide copper minerals and a surface expression of high grade molybdenite mineralization at the west end of the ridge.
The majority of holes drilled on the property have encountered ubiquitous hypogene copper and molybdenum mineralization with occasional intervals of higher grades and minor supergene enrichment. The higher grade intervals have typically been reported in the past but it should be noted that these are rarely isolated intercepts; typically, they represent highlights of longer intercepts. For example, hole OXY 4 has been reported in historical reports as having three short intercepts: 22 to 30 m depth at 0.512% Cu and 0.033%Mo, 58 to 76 m depth at 0.477% Cu and 0.032% Mo and 112 to 136 m depth at 0.693% Cu and 0.015% Mo. In fact, this hole provided mineralized intercepts throughout its length of 162.7 meters, bottomed at a grade of 0.21% Cu and averaged from 6m to 162.7 m 0.30% Cu and 0.028% Mo.
Most past operators concentrated on drilling but a subsidiary of Phelps Dodge that investigated the property in the late nineties focused on intensive mapping of geology, mineralization and alteration. The resulting work is invaluable, but it is ironic that that company abandoned the property before drilling a hole due to low copper prices. The alteration mapping indicates a ring like feature of phyllic alteration with more widely dispersed argillic alteration and silicification; potassic alteration is not noted at the surface, indicating that the current surface is, perhaps, high in the system. These are classic alteration zones that are typically found in copper porphyry systems.
Exploration Objectives:
The Company's immediate objectives at Cuatro Hermanos are defined in four phases:
Phase 1: Quantify total mineralization over a small but typical part of the property; this will give a first indication of tonnage and average grade potential without specifically seeking higher grade intervals. The area chosen for this is the area north of hole OXY 4 to a point north of hole CHM 4 and roughly between holes CHSM 14 and OXY 2. (see attached compilation map). This will encompass part of the Main Zone, most of the Sulphate Zone and its northerly extension and will provide data over an area of approximately 1.1 km by 400m. A total of 15 to 18 reverse circulation holes are expected to be drilled, to give a spacing of 150 m to 200m.
In the northern part of this area, hole CHM 4, drilled by BHP in 1997, intersected 38.6 m of 0.2% Cu and 0.106% Mo starting at a depth of 179 m. The Company's surface reconnaissance has revealed molybdenite in outcrop in the arroyo to the north of and at much lower elevation than the collar of CHM 4. The program will therefore include at least one hole collared in that arroyo and angled to intersect the same general area as that intersected by CHM4.
Phase 2: Investigate the depth potential of the system. It is possible to conclude that the current surface represents a point high in a very large porphyry system. It is possible that higher grade mineralization exists at depth. The Company is currently planning a deep drilling program, the parameters of which will depend to a certain extent on the capability of available equipment, but it is hoped that depths of 600 to 800 meters can be achieved.
Phase 3: Investigate the apparently shallow but high grade molybdenite occurrence at the western end of the ridge. As reported in the Technical Report, surface values up to 3.3% Mo over 4.0 m have been reported in an area corresponding with a geochemical molybdenum in soils anomaly. Deeper holes in this area reported little molybdenum so it is expected to be of limited vertical extent.
Phase 4: Investigate the various surficial conglomerate bodies on the property with a view to determining whether small scale production from such bodies is feasible.
Current Activities:
The first 4 holes of Phase 1 have now been completed. Ground conditions are difficult and progress slow due to highly silicified rock and broken ground. A depth of 300m has been targeted for each hole but most have stopped somewhat short of this due to ground problems. It may be some weeks before the results of a meaningful group of holes can be reported.
Conclusions:
Virgin Metals CEO Chris Davie said that: "It is clear that Cuatro Hermanos is a major, possibly world class, porphyry system. As we review the historical data, it is clear that the total metal inventory in the system is enormous. The key will be finding either grades or economies of scale that will permit the full potential of this system to be realized."
Virgin Metals is a junior exploration and development company; its projects include two copper/molybdenum porphyry properties in Sonora, northern Mexico. One of these, Los Verdes, is expected to evolve rapidly towards production while the other, Cuatro Hermanos, is the focus of expanded exploration effort.
Gary Lohman, Consulting Geologist to the Company, is the qualified person as defined by National Instrument 43-101 and has reviewed the content of this press release.
FORWARD-LOOKING STATEMENTS
This press release includes certain "forward-looking information" within the meaning of the Securities Act (Ontario), including, but not limited to, statements as to timing and extent of exploration programs and the availability of exploration results. As such, forward-looking information addresses future events and conditions and so involves inherent risks and uncertainties, as disclosed under the heading "Risk Factors" and elsewhere in Virgin Metals documents filed from time to time with the Ontario Securities Commission and other regulatory authorities. Actual results could differ significantly from those currently projected as a result of, among those factors, adverse weather, regulatory changes, delays in receiving permits, accidents and delays in completing exploration activities not all of which are in the control of Virgin Metals. The forward-looking information contained herein is Virgin Metal's reasonable estimate today of future
events and conditions, but no assurance can be given that such events or conditions will occur.
For further information, please contact:
Valerie Kimball, Investor Relations
Email: vkimball@virginmetals.com
Phone: (303) 703 1210
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