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Virgin Metals research and analysis

Contributed by eResearch

By Bob Weir

Virgin Metals is a junior exploration and development company focused on copper, molybdenum, tungsten, and silver projects in Mexico and the USA. Mexico’s State of Sonora is home to the Company’s Los Verdes, Potreritos, El Cobre, Alamos and Cuatro Hermanos projects, while the Topper project is located in Nevada, USA.

The Company recently released the results of a Preliminary Economic Assessment (PEA) of its 100%-owned Los Verdes project. The PEA includes a financial analysis of the impact of the Company’s recent acquisition of the Potreritos property, which is close to Los Verdes and of the same mineralogy. According to the news release, Potreritos has added “tens of millions of dollars” to the value of the project.

The PEA shows significant economic improvement and clarity compared with the Pre-Feasibility Study (PFS) that the Company received in 2008. The PEA stated that there were opportunities for additional cost savings and significant project growth. (The Company expects that the PFS will be updated in Q3/2012.)

We have updated Virgin Metals’ valuation based on the new Los Verdes resource estimate used in the PEA, and have reached a revised target price of $0.80 per share.

This does not take into account the potential resource of the Potreritos property, which is an added bonus.