Dear VMS Followers:

Thought you would be interested in following what Scotia Capital wrote in their newsletter following the drill results in yesterdays press release.



- Reed Lake Read-Through for HudBay: VMS Ventures (VMS-CN, not covered) announced good drill results at the Reed Lake property in Manitoba (HBM has 70% interest). The results included an intersection of 6.69% copper over 71 metres. VMS' share price increased by approx, 65% to $0.49 per share. Assuming the majority of the value of VMS is in the Reed Lake JV, the current market cap. of VMS implies a value for the project of approximately $150 million, with HBM's share worth approximately $80 million or $0.50 per share (taking into account VMS has a carried interest in the project). Larry does not carry a specific value for Reed Lake in our numbers for HBM, but recall he applies a multiple to NAV of 1.4x in part to reflect upside in exploration properties. Assuming VMS Ventures share price accurately reflects the value of the Reed Lake property each $0.25 per share move in VMS Ventures share price should equate to a $0.15 cent change in the value for each HBM share. He would characterize the positive results at Reed Lake as positive for HBM, but not overly significant in the context of the overall company. If one is takes a very positive view of the Reed Lake deposit, there is much more leverage in VMS than in HBM.

http://www.vmsventures.com/Newsroom/Press-Releases/Press-Release-Details/2010/VMS-Reports-669-Copper-Over-7169-Metres-and-374-Copper-Over-2177-Metres-from-In-Fill-Diamond-Drillholes-Three-and-Four-at-the/default.aspx