VMS Ventures Enters Into Letter of Intent With Hudbay Minerals to Develop Its Reed Lake Discovery and Reed Lake Properties
March 04 2010 - 6:30AM
Marketwired
VMS Ventures Inc. (TSX VENTURE: VMS) (the "Company") is pleased to
announce that it has entered into a non-binding Letter of Intent
with a subsidiary of HudBay Minerals Inc. (TSX: HBM) ("HudBay")
respecting VMS' Reed Lake Discovery Zone, the copper-rich Reed Lake
property claims optioned from HudBay, the two southern claims
adjoining the Reed Lake property and certain exploration properties
adjacent to the Reed Lake property, that are 100% held by VMS.
These Reed Lake properties are all located in Manitoba's Snow Lake
- Flin Flon Greenstone belt.
The Letter of Intent contemplates that the parties will enter
into a definitive Joint Venture Agreement respecting the two Reed
Lake property claims and the two claims immediately south of the
Reed Lake property. HudBay will have a 70% interest in the Joint
Venture and VMS will have a 30% interest. Upon execution of the
definitive Joint Venture Agreement, HudBay will make certain cash
payments to VMS in satisfaction of its obligation to earn back in
to the property and as consideration for VMS transferring the
southern claims to the Joint Venture. In turn, VMS agrees to
abandon all disputes respecting the location of the boundary
between the Reed Lake property and the southern claims.
Under the Joint Venture, HudBay will act as operator with
primary authority and discretion as to the exploration and
potential development of the Reed Lake property and will have
exclusive rights to purchase and market the ore produced from the
new Joint Venture. HudBay will provide full financing for VMS's
proportionate share of the costs to develop the property, which
will be repayable solely from VMS' share of cash flow generated by
the project.
The Letter of Intent also provides that, concurrently with the
entering into of the Joint Venture Agreement, VMS and HudBay will
enter into an Option Agreement that grants HudBay the option to
earn a 70% interest in four adjacent properties held by VMS,
including the Tower Zone and Super Zone properties. Upon making
certain cash payments and meeting work commitments over two to
three years with respect to each property, HudBay will earn a 70%
interest in the applicable property resulting in a new Joint
Venture between VMS and HudBay on substantially the same terms as
the Reed Lake Joint Venture. Any failure to make the required cash
payments and work commitments with respect to a particular property
will result in such property reverting to 100% ownership by VMS,
but will not affect HudBay's option over the other properties.
Rick Mark, CEO and Chair of VMS Ventures states: "We are very
pleased to enter into this Letter of Intent with HudBay Minerals.
We believe HudBay is our best partner to develop the Reed Lake
deposit quickly and profitably. We look forward to assisting HudBay
in resuming drilling at the Reed Lake deposit and aggressively
exploring and developing the Joint Venture claims. We welcome their
commitment to explore for more deposits in the Super Zone and the
other properties surrounding the Reed Lake Joint Venture
claims."
The establishment of the joint venture and option arrangements
is contingent on the parties reaching mutually satisfactory
definitive agreements and on receiving all necessary corporate and
third party approvals. HudBay and VMS anticipate that definitive
agreements will be completed by May 31, 2010.
About VMS Ventures Inc.
VMS Ventures Inc. is focused primarily on acquiring, exploring
and developing copper-zinc properties in the Flin Flon-Snow Lake
VMS Belt. The Company also holds the largest land package
considered prospective for nickel-copper mineralization at Lynn
Lake, which is to date Canada's third largest nickel producing
camp. The Company's project portfolio consists of the Snow Lake VMS
project, the Nickel Belt project and the South Bay
nickel-copper-cobalt PGE property.
About HudBay Minerals Inc.
HudBay Minerals Inc. (TSX: HBM) is a Canadian integrated mining
company with assets in North and Central America principally
focused on the discovery, production and marketing of base metals.
The company's objective is to maximize shareholder value through
efficient operations, organic growth and accretive acquisitions,
while maintaining its financial strength. A member of the
S&P/TSX Composite Index and the S&P/TSX Global Mining
Index, HudBay is committed to high standards of corporate
governance and sustainability.
All VMS Ventures Inc. properties are located in the mining
friendly province of Manitoba, Canada.
VMS Ventures Inc. currently has a profile on Corebox.net which
is updated as soon as assay results are released. The link to visit
our Corebox profile is:
http://www.corebox.net/properties/reed_lake/.
Investors are invited to visit the VMS Ventures IR Hub at
http://www.agoracom.com/IR/VMSVentures where they can post
questions and receive answers or review questions and answers
already posted by other investors. Alternatively, investors are
able to e-mail all questions and correspondence to VMS@agoracom.com
where they can also request to be added to the investor e-mail list
to receive all future press releases and updates in real time.
This news release contains "forward-looking information" within
the meaning of applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to, terms
of joint venture and option arrangements and the ability to
complete and execute definitive agreements. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects", or "does
not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", or "does not anticipate", or
"believes" or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "would",
"might", or "will be taken", "occur", or "be achieved".
Forward-looking information is based on the opinions and estimates
of management at the date the information is made, and is based on
a number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking information. Many of these assumptions are based on
factors and events that are not within the control of VMS and there
is no assurance they will prove to be correct. Investors are
cautioned against attributing undue certainty to forward looking
statements.
ON BEHALF OF THE BOARD OF DIRECTORS
John Roozendaal B.Sc., President & Director
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: VMS Ventures Inc. Keith Patey Director of
Communications (604) 986-2020 or Toll Free: 1-866-816-0118
www.vmsventures.com Coal Harbor Communications Dale Paruk (604)
662-4505 or Toll Free: 1-877-345-3399
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