Buchans Third Quarter 2018 Report
November 26th, 2018
Toronto, November 26, 2018 – Buchans Resources Limited (“Buchans” or the “Company”) is pleased to report interim results and exploration update for the quarter and nine months ended September 30, 2018.
This news release should be read in conjunction with the Company’s unaudited financial statements and the associated management’s discussion and analysis (MD&A) for the third quarter and nine months ended September 30, 2018 which are available on the Company’s website at www.buchansresources.com or under the Company’s profile on SEDAR (www.sedar.com).
● Large drilling program continues at Buchans with 7,700 metres drilled to date in 32 holes
● High-Grade massive sulphides and extensive stockwork mineralization intersected at Lundberg
● Airborne Geophysical Surveys over Newfoundland properties
● Dalradian shares acquired by Orion Mine Finance
CENTRAL NEWFOUNDLAND ZINC LEAD PROJECTS
Buchans holds an extensive mineral land package in the Buchans district of central Newfoundland with interests in four undeveloped deposits including the large, lower grade, Lundberg stockwork sulphide deposit, as well three smaller, higher grade, massive sulphide VMS “satellite” deposits, each with excellent exploration potential.
In summer 2018 Buchans initiated an 8,000 m drilling program using three drills to test targets within its Buchans and Tulks North properties in central Newfoundland, and to date has drilled approximately 7,700 metres in 32 holes. This is the largest drilling program undertaken at Buchans in the past six years.
Favourable results have been returned from holes drilled to expand and upgrade the Lundberg stockwork sulphide deposit. Among these results are several wide mineralized intercepts that are expected to contribute to the Lundberg resource. In addition, several holes intersected high-grade massive sulphide mineralization associated with the previously mined Lucky Strike orebody lying immediately above the Lundberg resource.
Drilling results have also been reported from two of four exploration target areas at Buchans where the Company is exploring for additional higher-grade VMS resources located within a radius of 3 km from the former Lucky Strike mine. Meanwhile additional results are still pending for three of the Buchans target areas, as well as results for recently completed drilling at the Company’s Daniels and Bobbys massive sulphide deposits, located on the nearby Tulks North property.
Results from the 2018 drilling on the Lundberg deposit include several intercepts of stockwork mineralization that may further expand and upgrade the resource. Highlights include intercepts of: 28.0 m of 2.64% combined base metals (i.e., Cu+Pb+Zn%; “CBM”) as 0.34% Cu, 0.83% Pb, 1.47% Zn, 3.0 g/t Ag & 0.05 g/t Au in hole H-18-3501; and 152.0 m averaging 2.48% CBM, as 0.27% Cu, 0.71% Pb, 1.50% Zn, 4.20 g/t Ag & 0.05 g/t Au in hole H-18-3505 (results released July 31, 2018), as well as 34.7 m averaging 4.54% CBM as 0.62% Cu, 1.08% Pb, 2.84% Zn, 7.31 g/t Ag and 0.127 g/t Au in hole H-18-3516b, and 35.7 m averaging 2.57% CBM as 0.53% Cu, 0.71% Pb, 1.34% Zn, 11.54 g/t Ag and 0.065 g/t Au in hole H-18-3518 (results released October 17, 2018).
In addition, drilling at Lundberg also encountered remnants of high-grade massive sulphide mineralization above the Lundberg deposit associated with the former Lucky Strike orebody. Highlights for this mineralization include intersections of 1.0 m assaying 21.99% CBM as 0.59% Cu, 7.90% Pb, 13.50% Zn, 109.9 g/t Ag & 1.93 g/t Au, as well as 1.8 m of 32.22% CBM as 4.29% Cu, 11.62% Pb, 16.30% Zn, 85.4 g/t Ag & 1.39 g/t Au in hole H-18-3500 (results released July 31, 2018).
More recent results also include intersections of 23.8 m averaging 9.11% CBM as 0.35% Cu, 3.01% Pb, 5.75% Zn, 94.04 g/t Ag and 0.999 g/t Au, including 8.0 m averaging 20.38% CBM as 0.69% Cu, 6.81% Pb, 12.88% Zn, 159.94 g/t Ag and 1.254 g/t Au in hole H-18-3515; as well as 4.80 m averaging 15.48% CBM as 0.50% Cu, 5.01% Pb, 9.98% Zn, 149.06 g/t Ag and 0.686 g/t Au in hole H-18-3516b (results released October 17, 2018).
In October 2018 Buchans contracted SkyTEM to fly state-of-the-art helicopter borne transient electromagnetic (TEM) and magnetic airborne geophysical surveys over its Buchans and Tulks North properties. The helicopter TEM survey was flown using SkyTEM’s innovative SkyTEM312 system, a platform well-suited for both near-surface and deep-target imaging.
The objective of the 2018 airborne geophysical survey is to further enhance understanding of several key exploration target areas. The geophysical survey program covered 970-line kilometres and provided coverage over several of the Company’s key exploration prospects and deposits, as well as historic mine sites. Results are currently under review by the Contractor and delivery of final processed results is expected in the coming weeks.
In addition, Borehole Electromagnetic Geophysical Surveys (“BHEM” surveys) are in progress at the Buchans and Tulks North properties in many of the holes drilled in 2018. These surveys are being undertaken in select areas where the Company believes potential exists to discover additional higher-grade resources at depth.
TASIUYAK GOLD PROPERTY, LABRADOR
In July 2018, Buchans undertook a limited prospecting and sampling program on its Tasiuyak gold property in Labrador. This 100% Buchans-owned property, located 10 kilometres south of Vale’s Voisey Bay nickel-copper-cobalt mine, includes mineral rights to 11.5 km2 covering a historic gold prospect discovered by previous explorers, while exploring for nickel during the Voisey’s Bay exploration rush in the mid-1990s.
The prospect, known as the VBE2 gold prospect, consists of a 90 m long bedrock exposure of sulphide-rich iron formation and has returned historic sampling results that include chip samples assaying up to 18.9 grams per tonne gold over 1 metre, as well as drilled intercepts over a 275 metre strike that include intercepts of 5.5 g/t Au over 2.1 m, 4.2 g/t Au over 3.0 m, and 4.1 g/t over 2.1 m.
Assays have been received from the summer prospecting program and are currently under review. Meanwhile, the Company continues to believe the property represents an excellent exploration opportunity for discovery of new gold deposits in a frontier area.
DALRADIAN RESOURCES INC
At June 30, 2018, Buchans held 2.37 million shares of Dalradian Resources Inc, which is developing the Curraghinalt gold deposit in Ireland. On June 21, 2018, Dalradian announced that it had entered into an arrangement agreement with Orion Mine Finance whereby Orion agreed to acquire all the outstanding shares of Dalradian by way of a statutory plan of arrangement for cash consideration of C$1.47 for each Dalradian Share. The Arrangement was approved by Dalradian shareholders at a special meeting held on August 31, 2018 and closed in the third quarter of 2018. Pursuant to the Arrangement, Buchans’ remaining 2,372,666 shares of Dalradian were acquired by Orion for proceeds of $3,487,819 and a gain on disposal of $344,037 was recorded.
RESULTS OF OPERATIONS
For the three-month period ended September 30, 2018, the Company recorded a loss of $101,276, compared to a loss of $1,461,645 for the same period ended September 30, 2017. The loss for the three-month period ended September 30, 2018 included a gain in marketable securities of $156,180. The loss for the three-month period ended September 30, 2017 included a loss in market value of marketable securities of $1,189,136.
For the nine-month period ended September 30, 2018, the Company recorded a loss of $321,990, compared to a loss of $1,975,282 for the same period ended September 30, 2017. The loss for the nine-month period ended September 30, 2018 included a gain in market value of marketable securities of $344,037.
Administrative expenses, excluding foreign exchange, for the nine-month period ended September 30, 2018 amounted to $699,008 compared to $617,160 for the same period ended September 30, 2017.
During the nine-month period ended September 30, 2018, Buchans invested $1,728,799 (2017- $775,481) on exploration of its mineral properties, of which the largest amounts were expended on the Buchans zinc lead project in central Newfoundland.
At September 30, 2018, Buchans held $4,494,750 (December 31, 2017- $3,426,194 in cash and $3,143,782 in cash equivalents) and had a working capital surplus of $4,142,416, compared to a working capital surplus of $6,318,009 at December 31, 2017.
LISTING OF BUCHANS SHARES
Unfortunately, throughout 2018 to date market conditions in Canada for junior exploration companies have not been conducive to an initial public offering of the shares of a new listed company and, based on advice from the Company’s brokers and financial advisors, it has been determined to postpone the planned listing of the Company’s shares pending more favourable market conditions.
In the meantime, Buchans continues as a Reporting Issuer in good standing in the Provinces of British Columbia, Alberta, Nova Scotia and Newfoundland and Labrador, and in compliance with all of the requirements of the Securities Acts and Securities Regulations in Canada. All public filings of the Company may be inspected under the Company’s profile on SEDAR at www.sedar.com. Shareholders who wish to transfer their shares to another party may do so by submitting appropriate transfer documentation in the usual manner to Computershare Investor Services in Vancouver or Toronto.
ABOUT BUCHANS RESOURCES
Buchans Resources Limited was incorporated on May 8, 2015 under the laws of the Province of Ontario, Canada. The Company was a wholly-owned subsidiary of Minco plc until August 30, 2017, at which time all the shares in the Company were transferred to Minco shareholders.
Buchans has interests in zinc, lead, silver properties located in Canada, Ireland and the United Kingdom, gold properties in Newfoundland and Labrador, manganese in New Brunswick and, indirectly through its 22% shareholding in Xtierra Inc. (TSXV: “XAG”), in base metal and silver projects in Mexico.
John F. Kearney: Chairman & Chief Executive +1 416 362 6686
Paul Moore: Vice President Exploration + 1 709 738-7384
Peter McParland: Director – Ireland +353 (0) 46 907 3709
Additional information about the Company is available on the Company’s website at www.BuchansResources.com.
This document contains certain forward-looking statements relating to, but not limited to, the Company’s expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “estimate”, “may” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects and timing of commencement of operations, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, delays in the development of projects changes in exchange rates, fluctuations in commodity prices, inflation and other factors. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Shareholders and prospective investors should be aware that these statements are subject to known and unknown risks uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Shareholders are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
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