VMS Ventures Inc. (CVE:VMS) (PINK:VMSTF) exhibited a strong price action recently after the company’s partner announced to have decided on a joint project funding.
VMS stock price gapped and ended Monday’s session with nearly 10% gain despite the gradual decline in price throughout the session. The price is holding above its 50 day moving average exhibiting large volatility and significantly increased trading during the pre-market hours.
The share price initially gapped up on December 19 when the company’s partners approved significant property development plans. HudBay Minerals Inc. stated they are now ready to begin construction on Reed Copper project as their board of directors approved the necessary capital expenditures.
VMS holds a 30% ownership of this project under a joint venture with options to acquire up to 70% ownership. The first production is expected in late 2013 and it will cost $71 million to get there.
The decision was made in accordance with results of a preliminary economic assessment. When the construction ends companies expect to see a daily production of 1.3 thousand tons and grades are expected to reach 3.78% for copper, 0.45 g/t for gold and 5.77 g/t for silver.
VMS concurently announced that data from electromagnetic pulse based exploration shows strong anomalies surrounding the Reed Copper deposit. They have been reviewed by the joint venture management and drilling is now scheduled to begin in January 2012.
