Ahead of the Herd - A Second Discovery at Reed Lake


By Richard (Rick) Mills
Ahead of the herd

As a general rule, the most successful man in life is the man who has the best information

Here’s the title of VMS Ventures latest news release:


The release does a good job of getting the facts out to shareholders regarding a new discovery but sometimes news releases (NR) don’t tell the whole story. And this story is quite interesting as it points towards a discovery with the potential of being much larger than Reed Lake.

The original Reed Lake discovery was made during the first drill program VMS undertook on its property and most of the follow up drilling was focused on confirming and expanding the discovery. Reed Lake is open at depth and already has an indicated resource of 2.55 mil tonnes grading approximately 5% copper equivalent.

Now HudBay Minerals has matched VMS's Reed Lake success with a discovery hole consisting of high grade copper mineralization - their first drill program outside of the Reed Lake deposit on an adjacent optioned property.

HudBay is earning into the claims surrounding the Reed Lake VMS/HudBay JV through 4 separate option agreements, this is on top of their Joint Venture and financing of the Reed deposit. The terms of the Option agreement parallel the JV and enables HudBay to earn up to 70% ownership - but they also have to make cash payments of approx $2.4 million over a three year period and carry development costs for the first $50 million of expenditures.

I’ve said “This story is quite interesting as it points towards a discovery with the potential of being another Flin Flon.”  So what makes this discovery so interesting? Well it’s the geology, the geophysical anomaly and the results from a few historical drill holes located in the area.

HudBay’s new Super Zone discovery hole was probed using down hole technology.  You send a receiver down the borehole, then pull it up while a very large wire loop at surface emits a strong electrical current into the ground. As the probe/receiver  is pulled up the hole anything conductive in the ground, within 100 meters, lights up.

Down hole probe technology basically creates a 100m window into the subsurface, effectively leaving much less room for deposits to hide in.

HudBay’s borehole survey detected two separate conductive features and company geophysicists calculated where they were located. Their geologists sited and drilled a test hole on the coordinates supplied by the geophysicists. Results were impressive - two separate zones, one running seven meters of 7.5% copper about 100m from surface vertically, and a second much larger 44.5 meter lower grade zone grading just under 1% copper but with the accompanying signatures of zinc, silver and copper - suggesting this is part of a potentially large VMS mineralization system.

The geophysical survey of the property shows that HudBay’s discovery hole was drilled at the NE end of a magnetic/conductive geophysical anomaly that’s over one km long and heads straight towards an old VMS zone discovered in the early 1970's by Freeport McMoran.

Freeport’s discovery was too small to be of economic interest (at the time) but it is located between the Reed Lake deposit and this new discovery by HudBay.

Now of course the whole horizon is suddenly of great interest and there’s over a kilometer of it to be tested. HudBay is completing deep penetrating geophysical surveys over the area now and they are expected to be back drilling soon.

The other great revelation in this discovery is that unlike the Reed Lake deposit, which is hosted entirely in basaltic rocks, the new HudBay discovery is located at the point in the volcanic rock pile where the system switches from basalt rocks to a volcanic rock called rhyolite.

These two different volcanic eruptions have very different chemistries from one another. This in important as the largest VMS deposits - Flin Flon: 66 mil tonnes of 2.5 copper- 4.5 zinc plus 2 g/t gold and 15 g/t silver - are hosted in such a setting. Of course not all deposits at this horizon are that large, and there’s a long way to go to prove if this discovery is a mine or not but combined with the evidence gathered to date, the possibility is real and investors should definitely have VMS on their radar screen.

Is VMS Ventures on your radar screen?

If not maybe it should be.

Richard (Rick) Mills
[email protected]

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Richard is host of and invests in the junior resource sector. His articles have been published on over 300 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, Resource Investor, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, FNArena, MetalsNews and Financial Sense.


Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified.

Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

Richard Mills does not own shares of any companies mentioned in this report

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