Dear VMS Followers,

In last week's Gold Report, Rick Mills, of Ahead of the Herd, did an extensive interview where he discussed attributes of successful exploration companies and picked some of the companies he follows. VMS is one of those.

The excerpt on VMS is just below and the link to Rick’s site with the entire article is after the excerpt.

I think Rick hit on some very important elements of the VMS story. I invite you to take a moment and see if you agree.

Best regards,

Rick Mark
CEO
VMS Ventures Inc.

VMS owns ~45% of North American Nickel

Excerpt from The Gold Report, January 18, 2012.

TGR: Excellent. Heading further north, do you have any Canadian projects to talk about?

RM: VMS Ventures Inc. (VMS:TSX.V) is a solid junior, among the smartest explorers around using all the modern techniques, and it's a survivor. VMS Ventures has been through the tough times, back in 2000 and again a few years ago in 2008. This company knows how risky it is for a junior to run out of money, and it isn't going to do it. It has $10M in the treasury to start 2012—enough to keep exploring and going on its own until cash flow starts. Let's talk about that cash flow.

VMS Ventures has a JV with HudBay Minerals Inc. (HBM:TSX; HBM:NYSE) on its Reed Lake copper deposit that will take the company to production next year. It will get 30% from this operating mine—that's many, many millions of dollars a year. When you look at the kind of cash flow that this carried-to-production scenario at Reed Lake will give the company, you have to expect an upward revaluation in the share price. Another factor that helps derisk VMS Ventures is HudBay's Trout Lake Mine is coming offline, its plant in Flin Flon is underutilized, so it needs the feed from production at Reed Lake.

In addition to the JV, HudBay has optioned some of VMS Venture's properties. One discovery, Reed North, has enormous potential to be an absolute monster of a deposit.

Something like 98% of VMS's properties are 100% owned. The company did several drill programs last year and will be following up on three discoveries made on three different 100%-owned properties. VMS also owns 45% of North American Nickel Inc. (NAN:TSX.V), which has a possible district-size nickel play in Greenland. With all it has going—its considerable treasury, the cash flow, the exploration upside, the management—VMS Ventures is a poster child for how juniors should manage capital. As we agreed, the most dangerous thing for a junior is to run out of money. This company absolutely doesn't have that problem. And, as a matter of fact, the closer it moves to production, it's just going to get better and better.

Fully cashed up with $10M in the bank and financing costs for its 30% of the mine covered, VMS Ventures also focuses on some of the safest areas for investment. It has no geopolitical risk.

TGR: Because VMS is a copper play, you must anticipate somewhat stable demand for copper, too.

RM: We're never going to see $0.85/pound (lb) copper again. With copper at $3–4/lb, Reed Lake should be wildly profitable. Put $71M into building a ramp down to the deposit and who knows how much more copper it will find? It's not only that this deposit has 5% copper equivalent over a couple of million tons, but these deposits come in pods. So far, VMS has not drilled off to the side or underneath because it simply doesn't make economic sense. But once it has the decline into the deposit, it will build side rooms, set up drills and start fan-drilling and see what it gets, right?

TGR: Right. And the idea of diversifying a little bit into base metals makes sense for the typical investor. Any more juniors that you'd like to talk about?

To read the entire article, please CLICK HERE