Virgin Metals Announces Receipt of a Positive Pre-Feasibility Study on the Los Verdes Molybdenum-Copper Project, Sonora, Mexico

    Symbol: VGM
    Shares Outstanding: 84,881,246

    TORONTO, July 28 /CNW Telbec/ - Virgin Metals Inc. ("Virgin Metals" or
the "Company") announces that it has received from its consultants, headed by
Mine and Quarry Engineering Services ("MQES"), the results of the
pre-feasibility study (PFS) of a mining and processing operation to exploit
its 100% owned Los Verdes molybdenum - copper project. A NI 43-101 technical
report will be filed within 45 days.
    The study is based on a 1 million tonne per year open pit operation to
recover molybdenum and copper concentrates from non-oxide ore. The study
results for a base case, which uses constant prices of US$ 25/lb for
molybdenum and US$ 2.50/lb for copper, may be summarized as follows:

    Mineable Reserve tonnage of non oxide ore:  7,050,000 tonnes
    Average Mineable Reserve grades:            0.137% Mo, 0.657% Cu
    Waste:ore ratio, including stockpiling
     oxide material:                            2.12
    Molybdenum recovery:                        71%
    Copper recovery:                            92%
    Molybdenum produced, life of mine:          15 million lbs
    Copper produced, life of mine:              89 million lbs
    Capital Cost:                               US$ 138.8 million
    Targeted Development Period:                3 years from issue of the PFS
    Design and Construction Period:             2 years
    Average Mine Site Cash Operating Cost:      US$ 22.71/tonne ore
    Average total cost (including downstream
     processing)                                US$ 15.53 /lb molybdenum
    Average total cost after copper credits     US$ 0.67/lb molybdenum
    Undiscounted Pre Tax Cash Flow:             US$ 220.5 million
    Pre Tax Net Present Value at
     8% discount rate:                          US$ 96.9 million
    Internal Rate of Return (before tax):       23%
    Pay back period:                            3.3 years

    The PFS includes details of a planned work program aimed at collecting
the data and samples that are necessary in order to finalize the basis for
project final feasibility study and production decision. The program includes:
infill drilling for resource definition and detailed mine planning; locked
cycle flotation testwork on multiple ore types for geometallurgical mapping
and final process plant design; hydrological and geotechnical studies to
validate water and waste management plans; implementation of environmental and
social management action plans and advance of other activities including but
not limited to permitting and surface rights acquisition.
    Virgin Metals CEO Chris Davie commented: "We are pleased to have been
able to demonstrate in considerable detail the technical and economic
viability of the Los Verdes project. We are also encouraged by the potential
identified in the study to improve project economics to include tungsten
recovery and increase molybdenum recovery. In anticipation of receipt of the
PFS, we have resumed discussions with selected financial institutions in order
for them to commence assessing the project. We look forward to working to
determine the best way to finance this project in the medium and long term. In
parallel to this activity the Company will be taking action to further
strengthen the project development team and commence discussions with
candidate consultants and advisors to assist it to implement the final studies
and prepare for development."

    About Virgin Metals:

    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 the subject of a pre-feasibility study
and is expected to evolve rapidly towards production while the other, Cuatro
Hermanos, is presently the focus of an intense exploration effort.


    This press release includes certain "forward-looking information" within
the meaning of applicable securities laws, including, but not limited to the
following: statements as to estimated reserves and resources of the Los Verdes
project; assumptions regarding development of a mine at Los Verdes; the timing
of mining and processing operations at Los Verdes and any project financing at
Los Verdes. This 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 securities commissions in Canada, the Toronto
Stock Exchange and other regulatory authorities. Important factors that could
cause actual results to differ materially from this forward-looking
information include: the results of independent Canada NI 43-101 reports; the
outcome of assays and additional exploration sampling and drilling efforts;
increases in anticipated cash costs, operating costs, mining costs, capital
expenditures and other costs; decreases in anticipated plant molybdenum and
copper recoveries and molybdenum and copper prices; delays or problems in
construction, permitting and start-up; variations in ore grade, mining, or
processing problems or issues. 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

For further information:

For further information: Valerie Kimball, Investor Relations,, (303) 703 1210; Renmark Financial Communications
Inc.: Barbara Komorowski:; Mr. Neil
Murray-Lyon:, (514) 939-3989, Fax: (514)

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