Mr. John Roozendaal reports

VMS VENTURES UPDATES PROGRESS AT THE REED COPPER PROJECT NEAR SNOW LAKE, MANITOBA: CONSTRUCTION ON SCHEDULE

VMS Ventures Inc. has released an update on developments at the Reed copper project near Snow Lake, Man. Reed is a high-grade copper deposit scheduled to begin production in the fourth quarter of 2013. VMS Ventures owns 30 per cent and is carried to production. HudBay Minerals owns 70 per cent and is the operator.

VMS Ventures chief operating officer, Neil Richardson, stated: "Important progress was made over the last quarter of 2012 with the completion of necessary infrastructure for underground development. We are particularly pleased that the Reed project has completed much of the difficult near-surface phase of underground work, including the completion of approximately 72 metres of lateral development in 2012."

The Reed project is within the planned budget. As of the end of 2012, the team worked 294 days without a lost-time accident, including the critical activity on the project to ensure the decline is well supported near its entrance by installing bolts, screen, arches, spilings and shotcrete.

Hudbay and VMS Ventures have invested $19.7-million in the project to Nov. 30, 2012, and have entered into an additional $17.8-million in commitments for the project. Capital expenditures at Reed are expected to total approximately $44-million in 2013.

The Environmental Act licence application for Reed has been submitted to the provincial government. Mining at the Reed copper project is anticipated to ramp up to full production of approximately 1,300 tonnes per day by the first quarter of 2014.

Project highlights in the fourth quarter of 2012

The ramp had advanced 72 metres, and the shop and warehouse were 75 per cent complete with the steel siding in progress. The mine rescue trailer was set up, and training is continuing. The winterization is continuing, and site preparation is now complete for the development of the escape and ventilation raises. The ramp is expected to progress at a rate of four metres of advance per day for the remainder of the project.

We seek Safe Harbor.