TORONTO (miningweekly.com) – The construction of project developer VMS Ventures’ Reed copper project joint venture (JV), in Manitoba, is progressing apace, with ramp construction having advanced by about 200 m laterally and 32 m vertically, COO Neil Richardson told Mining Weekly Online on Thursday.

He said operator and JV partner HudBay Minerals had encountered some ground issues while driving the decline through soft layers of rock, but expected to resolve the problem as construction drove past the next 20 m to 30 m. The ramp was expected to progress at a rate of 4 m/d for the remainder of the project.

The construction site had now been winterised with a curtain over the decline entrance now erected in an effort to keep snow from entering the construction site.  Construction of an escape rise was also progressing, as the first 15 vertical metres were complete.

Construction of the shop and warehouse would also be completed in the next two weeks. During January, a 1.6 MW generator was commissioned.

“The critical challenge this year is to ensure that the Reed project is completed smoothly. It will be a significant turning point for the company when the first ore is produced,” he said.

The Vancouver-based company discovered the Reed copper project, near Snow Lake, in 2007, and in 2010 entered into a JV with HudBay to develop the deposit and two claims to the south, with HudBay holding a 70% interest and VMS a 30% interest in the JV.

Richardson said the project was within the planned budget and on schedule for production to start at the end of the year, with production expected to ramp up to about 1 300 t/d by the first quarter of 2014.

Hudbay and VMS had invested $19.7-million in the project as at November 30, 2012, and had entered into $17.8-million in commitments for the project this year. Capital expenditures at Reed were expected to total about $44-million this year.

VMS also owned a large land package in the Snow Lake/Flin Flon greenstone belt in Manitoba, and planned a $1.2-million drilling programme during this year’s drilling season.

It had recently awarded a drilling contract to British Columbia-based Westcore Drilling for the winter drill programme.

This programme would target VMS' fully owned exploration properties throughout the Flin Flon/Snow Lake greenstone belt, where the company expected to test between 16 and 20 targets over the next three months.

Drilling would start on the Reed East project, situated about 8 km north-east of the Reed project. The programme would initially focus on targets below the Paleozoic cover before moving north to the Sails Lake and Sails East projects.

Further, the company plans to undertake diamond drilling during the quarter on its Black Creek and Terra Incognita projects, in the north of Ontario, with prospecting and trenching activities to follow during the second quarter.

Meanwhile, VMS owns about 21-million shares or 25% of North American Nickel, which is mainly focused on exploring the Maniitsoq nickel project, the site of the world’s largest asteroid-impact structure, in the south-west coast of Greenland.

The project consists of two contiguous mineral exploration licences for the exclusive exploration rights to a 4 983 km² area, covering a number of high-grade nickel/copper sulphide occurrences associated with norite and other mafic/ultramafic intrusions.

A district-wide drill programme is planned for Maniitsoq this year. Richardson pointed out there exists significant upside for more discoveries to be made.

The company’s TSX-V-listed shares have lost about 35% of their value in the past year and on Thursday traded 6.38% lower at 22 Canadian cents apiece.