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VMS Ventures (CVE:VMS) made a good deal at the right time and now it is looking for more opportunities, says CEO Rick Mark.
In July 2010 Hudbay Minerals (TSE:HBM) signed an agreement with VMS Ventures to build a mine at Reed Lake, a high-grade copper deposit located in the Flin Flon Greenstone Belt. VMS retains a 30% interest in the project. Hudbay owns the remaining 70% and will be running the mine. Production is expected to begin as soon as the fourth quarter of this year. The underground mine has an expected life of five years.
“We were fortunate to get a deal with Hudbay Minerals who are the producer in our area, northern Manitoba,” says Mark who spoke to MINING.com at the PDAC convention in Toronto last month.
“They’ve been there 80 years. They are the known strong man in the area.”
Mark describes the mood in the market as brutal.
“It’s bleak. Not a lot of money has gone to mining in 2012, and I don’t see it brightening up quickly.”
Mark says he is looking for a deal involving base metals and in a poltically-secure jurisdiction. The project should be advanced.
“A sweet spot might be what can $5 million do. If we believe that $5 million is going to make that into an opportunity to do $50 million because there is a mine, we are going to look at that.”
The company has drilling underway in another Manitoba project. Winter drilling in the province is ideal because the ground is frozen.
Mark admits that releasing drill results into this market may not matter, unless the results are spectacular, but it’s a good time to control costs.
“You are certainly in a competitive bidding situation. [We] are tendering a drilling contract and there will be lots of people coming to us who will be sharpening their pencils.
The Reed Lake mine is located 120 kilometres east of Flin Flon, Manitoba.
