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Post by axegirl1on Mar 04, 2010 7:11pm

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Post# 16845313

Rick Mark email-Reed Lake-Quickly and Profitably

Dear VMS Followers,

I am very pleased to send along this morning’s press release announcing our Letter of Intent (LOI) with HudBay Minerals to develop our Reed Lake deposit and the surrounding areas. The full release is below.

While it has been a long wait for many of us, and there are still details to be defined, we now have a solid platform on which to build a much bigger, stronger company. I thought you should first see the quotes from Warren Holmes of Hudbay and from me, both lifted from the two pre-market news releases today.

First, from Warren Holmes, Executive Vice Chairman and interim CEO, HudBay Minerals:

"We are pleased to enter into this letter of intent with VMS," said W. Warren Holmes, HudBay's Executive Vice Chairman and Interim Chief Executive Officer. "We look forward to working with VMS to advance the Reed Lake property towards feasibility and to advance the exploration of several promising targets on the option properties. Bringing the Reed Lake deposit into production will provide feed for our Flin Flon concentrator and create numerous jobs in the area."

And, from me:

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.”

In my view, we are about to become a new and different Company. When this completes and HudBay begins its work on developing the mine, VMS will be in front of a whole new set of institutional investors in Canada and around the world. VMS will then be valued first as a 30% Joint Venture partner of what we believe will be a significant, profitable mine with lots of room to grow in size. Four key claims will make up the Joint Venture.

Our Super Zone properties are also part of our LOI with HudBay. We believe it makes good sense to build our partnership with HudBay to include the area we consider to be very prospective and has the potential to utilize the infrastructure advantages a Reed Lake Mining operation might provide to future discoveries.

This is an important milestone in our history and we look forward to concluding the definitive agreement, which we expect to do by May 31 this year.

Finally, we continue to provide “blue sky” for our shareholders with numerous “ready to drill” prospective properties in the Snow Lake belt. More on that soon.

I look forward to your feedback.

Best regards,

Rick Mark
CEO, VMS Ventures Inc.

VMS VENTURES ENTERS INTO LETTER OF INTENT WITH HUDBAY MINERALS TO DEVELOP ITS REED LAKE DISCOVERY AND REED LAKE PROPERTIES

Vancouver, B.C., March 4, 2010. VMS Ventures Inc. (TSX-V: 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-richReed 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. CLICK HERE TO READ MORE