Vancouver — The first drill results from the Reed Lake copper-zinc discovery made waves in the market in recent weeks. Now VMS Ventures (VMS-V, VMSTF-O) has raised $19.5 million to fund continued exploration on its volcanogenic massive sulphide (VMS) project to prove the discovery is more than a flash in the pan.
The company issued 13 million subscription receipts, 8 million of which are exchangeable for units and 5 million of which are exchangeable for shares, for gross proceeds of $19.5 million. The funds are to be held in escrow until the company receives shareholder approval to increase its authorized share capital to an unlimited number of common shares. A shareholder meeting is scheduled for Dec. 11.
The subscription receipts exchangeable for units were sold at $1.50 apiece; each unit consists of one share and one warrant. The receipts exchangeable for shares were also sold for $1.50 each.
Provided the company gets shareholder approval, the private placement will leave VMS Ventures cashed up to explore its copper-zinc VMS discovery at Reed Lake near Snow Lake, in Manitoba. In mid-September, the company announced that six holes from within an 800-metre-long southwest-trending versatile time-domain electromagnetic (VTEM) anomaly showed VMS mineralization or indicators.
By late October, the full results from three holes had been released. Hole 2 intersected 43 metres grading 4.38% copper, 1.56% zinc, 0.85 gram gold per tonne and 13.09 grams silver starting from 198 metres depth, including 10.5 metres grading 11.19% copper, 1.39% zinc, 1.62 grams gold and 29.26 grams silver. Down-hole from the pyrite-sphalerite cap that produced those results, the drill intersected a structurally disturbed zone containing sulphide and quartz veins that returned 3.5 metres grading 0.95% copper, 0.09% zinc, 0.33 gram gold and 13.35 grams silver.
Hole 3, collared 100 metres north of hole 2 and drilled to a depth of 265 metres, intersected the pyrite-sphalerite cap at 177 metres depth, but cut a much shorter mineralized interval. The interval returned 2.7 metres grading 1.95% copper, 4.98% zinc, and 11.09 grams silver. The company’s geologists believe the mineralization encountered in hole 3 is a faulted slice of the cap of the deposit — the presence of a shear above and quartz veins below the solid sulphide zone suggest the mineralization has been displaced.
VMS Ventures is permitting an additional 13 holes for follow-up drilling in a second drill program that was slated to begin by mid-month. The company will then apply for permits to drill a larger program aimed at targets that are inaccessible prior to freeze-up.
Reed Lake consists of a property optioned from W. Bruce Dunlop, another under option from Hudson Bay Exploration and Development, a subsidiary of HudBay Minerals (HBM-T, HBMFF-O), and several claims staked by VMS Ventures.
Reed Lake VMS mineralization is contained in moderately to intensely altered felsic volcanic rocks, typical of other VMS deposits along the Flin Flon-Snow Lake belt. VMS Ventures has been picking up property in the Snow Lake area for the last few years and now holds 12 distinct land packages in the Proterozoic belt.
VMS Ventures saw 2.7 million shares traded on the news to close largely unchanged at $1.34. The company has a 52-week trading range of 10-$1.76 and has 86.5 million shares issued.
Be the first to comment on "VMS raises $19.5M for Reed Lake"