Buchans Resources Reports First Quarter 2023 Results
May 26, 2023
Toronto, Ontario

Buchans Resources Limited (the “Company” or “Buchans”), a Canadian mineral exploration and development company, reports its financial results and results of operations for the three-month period ended March 31, 2023.

This news release should be read in conjunction with the Company’s audited financial statements and the associated management’s discussion and analysis (MD&A) for the three-month period ended March 31, 2023 which are available on the Company’s website at www.BuchansResources.com or under the Company’s profile at www.sedar.com.

COMPANY OVERVIEW

Buchans’ flagship project consists of the historic, high-grade Buchans VMS base metal mining camp in central Newfoundland, Canada. Recognized internationally as one of the world’s richest and highest grade VMS-camps, the Company remains committed to advancing this project through exploration for new high-grade orebodies as well as advancing the project’s large lower grade Lundberg stockwork base metal sulphide deposit as a possible open pit resource development.

Buchans is also exploring several gold properties in central Newfoundland, including three properties being explored as joint ventures, with two operated and funded by joint venture partners. The Company also maintains a portfolio of other base metal and gold projects throughout Newfoundland and Labrador, including Ni-Cu-Co sulphide projects near Vale’s Voisey’s Bay nickel-copper-cobalt mine in Labrador.

The Company’s projects are in keeping with its strategy of exploring districts and opportunities with demonstrated potential for exceptional mines and the Company advances its projects both on its own and in joint venture with partners who fund ongoing exploration.

In addition to its project portfolio, Buchans holds equity interests in royalties through its 22.0% shareholding in Royalties Inc (CSE: “RI”) (formerly Xtierra Inc. TSXV: “XAG”), and in base metal exploration in Ireland through its 14.4% shareholding in Minco Exploration plc.

Buchans Base Metals Project

The Company’s 100% owned Buchans base metal project covers more than 81.5 square kilometres (8,150 hectares) including all of the camp’s past producing orebodies and key undeveloped prospects. Historic mining by ASARCO within the current property produced more than 16.2 million tonnes of ore with a combined average grade of 14.51% Zn, 7.65% Pb, 1.33% Cu, 126 g/t Ag, and 1.37g/t Au derived from five separate deposits before mine closure in 1984. The Company believes the projects holds significant potential for discovery of additional high-grade orebodies through application of modern exploration technologies and geological concepts.

With the objective of identifying high-grade mineralization, Buchans has undertaken multiple initial, target-specific exploration programs throughout the property, including a variety of geophysical surveys and exploratory drilling programs.  The Company has also devoted great effort to assessing the camp’s mineralized prospects and trends through systematic relogging of archived historic drill cores from previously mined orebodies and undeveloped prospects.

To date, the Company has relogged more than 190,000 metres of drill core from 935 holes as a means of identifying and delineating favourable areas for further exploration for new buried high-grade orebodies. Based on recent exploration activities, including reviews of historic geophysical and geological data, coupled with re-interpretation and generation of a 3D digital geological model for the project, Buchans has identified multiple target areas warranting further testing by diamond drilling.

Lundberg Deposit Open Pit Project

Located within the Buchans Project, the Lundberg deposit is the largest and most advanced base metal deposit in the Buchans district and has been the subject of multiple technical evaluations undertaken by the Company to advance the deposit towards open pit mine development. These evaluations have included several campaigns of resource delineation drilling, metallurgical test work and other technical assessments.

Lundberg’s current In-pit resource estimate contains more than 1.25 billion pounds Zinc Equivalent of which 97.8% of the resource occurs in the higher confidence Indicated category. The Lundberg resource comprises Indicated In-pit resources totaling 16,790,000 tonnes grading 1.53% Zn, 0.64% Pb, 0.42% Cu, 5.69 g/t Ag and 0.07 g/t Au (3.38% Zn Eq), as well as Inferred In-pit resources of 380,000 tonnes grading 2.03% Zn, 1.01% Pb, 0.36% Cu, 22.35 g/t Ag and 0.31 g/t Au (4.46% ZnEq) [Technical Report entitled: “NI 43-101 Technical Report and Mineral Resource Estimate
on the Lundberg Deposit, Buchans Area, Newfoundland and Labrador, Canada
”, dated April 15, 2019, filed on
SEDAR].

Encouraged by the positive outlook for metal prices, and particularly copper which makes up a significant component of the Lundberg resource, Buchans remains optimistic that Lundberg represents an important resource asset and intends to continue to advance the assessment of Lundberg as a potential open pit mine development.

Lundberg Deposit Exploration – Two-Level Target

The Company has identified several targets where exploration near Lundberg may further enhance development of this deposit by adding significant metal inventory.  Among these targets is the Two-Level (Lucky Strike) mine area, located immediately north of the Lundberg deposit.  At this locality, the Company believes potential exists to discover additional high-grade resources down plunge of previous exploration drilling that might supplement open pit mine development at Lundberg as either additional in-pit or underground resources.

The Two-Level target is on-strike of mineralization intersected by drilling last undertaken by the Company in 2018, immediately northwest of Lundberg and beyond the reach of underground workings of the former Lucky Strike mine.  Buchans believes the Two Level area remains underexplored for additional fault-displaced orebodies, where previous drilling tended to be drilled either too shallow or at too wide a spacing to adequately test this concept.

Drilling completed by the Company in this area in 2018 returned intercepts of 1.8 m of high-grade mineralization assaying 9.48% combined base metals (Zn+Pb+Cu) as 5.57% Zn, 3.15% Pb, 0.76% Cu, 90.5 g/t Ag & 0.37 g/t Au, including 1.0 m assaying 14.83% combined base metals as 8.70% Zn, 4.87% Pb, 1.26% Cu, 133.2 g/t Ag & 0.47 g/t Au (Buchans news release dated November 19, 2018).

Buchans continues to assess plans to undertake further exploration and pre-development activities to advance its Lundberg deposit as a potential open pit mining and milling operation.  The timing and scope of future programs at Lundberg and the Two-Level area are currently being considered as the Company evaluates possible funding opportunities.

Gold Exploration in Newfoundland & Labrador

Buchans controls several gold projects in central Newfoundland and northern Labrador.

Among these projects are three gold exploration joint ventures located within the central Newfoundland gold belt, an emerging district that continues to yield both advanced staged discoveries such as Marathon Gold’s (MOZ.TSX) Valentine Lake gold project, and impressive, early-stage discoveries being explored by New Found Gold (NFG.TSX.V) at its Queensway Gold Project.  As a result of these discoveries, the central Newfoundland gold belt is currently the focus of significant exploration activity and investment.

In 2021, Buchans entered into joint venture (“JV”) agreements on three of its central Newfoundland gold projects whereupon exploration of these properties is primarily funded by Buchans’ JV partners earning or maintaining interests on the Company’s properties.  These JVs include the 5,425 ha Tulks South JV with Quadro Resources Ltd. (QRO.TSX.V, “Quadro”); the 9,100 ha Lake Douglas-South Tally JV with C2C Gold Corp. (CTOC.CSX; “C2C”) and the 8,295 ha Long Range JV with Benton Resources Inc. (BEX.TSX.V; “Benton”).

In 2022, both C2C and Quadro undertook additional follow-up prospecting and other explorations activities.  These activities included prospecting on the Tulks South joint venture property, and additional prospecting, geochemical, geophysical surveys and trenching undertaken by C2C on the South Tally-Lake Douglas joint venture property.

On the Long Range JV the most recent work was undertaken by Benton, which expended approximately $77,000 on the project in 2021 and early 2022. Results of this work include anomalous gold assays returned from several areas, in particular, resampling of sub-crop from the historic Little Barachois Brook gold prospect that returned values of 49.46 and 74.44 g/t Au respectively (Buchans news release dated November 25, 2022). Benton has recommended additional soil and stream sediment geochemical surveys be undertaken in the vicinity of this prospect.

Exploits Properties

Buchans retains 100% interest in several other gold projects in the central Newfoundland gold belt and other prospective terrains in northern Labrador.  Among these, are three gold properties totalling 8.25 km2 near Gander known as the Exploits Properties located within and adjacent to New Found Gold Corp.’s (TSXV-NFG) Queensway project.

Buchans completed prospecting programs on two of its three Exploits properties in 2021 and is planning additional prospecting activities on all three of its Exploits properties in 2023.

Tasiuyak Gold Property, Labrador

Buchans holds a 100% interest in its Tasiuyak gold property in Labrador, located 10 km south of Vale’s Voisey’s Bay nickel-copper-cobalt mine, and covering the VBE-2 gold prospect discovered by previous explorers during the Voisey’s Bay exploration rush in the mid-1990s.

Exploration undertaken on this project by Buchans in 2018  returned sawn bedrock channel sample assays from the VBE-2 prospect averaging 8.51 g/t Au & 0.93 g/t Ag over 4.8 m, including 31.91 g/t Au over 0.85 m.  Prospecting undertaken along strike of the prospect traced the host horizon over a 3-kilometre strike where additional sampling returned assays of up to 0.69 g/t Au over 0.50 m, two kilometres south of the VBE-2 prospect.

Buchans has plans to advance further exploration on this project that the Company believes may be analogous to the former Homestake gold mine in South Dakota that is reported to have produced more than 40 million ounces of gold by mining between 1876 and 2001.

Exploring for Nickel-Copper-Cobalt in Labrador

Buchans holds (100%) several properties in Labrador considered prospective for Voisey’s Bay-style nickel-copper-cobalt deposits, including 82 claims (20.5 km2) covering prospective troctolitic gabbros of the Pants Lake Intrusive Suite at South Voisey’s Bay, and 5 claims (1.25 km2) covering mineralized troctolite at Voisey’s Bay itself.

South Voisey’s Bay

The South Voisey’s Bay property is located 80 km south of Vale’s Voisey’s Bay mine and covers mineralized troctolitic gabbros comparable in age and composition to rocks hosting the Voisey’s Bay deposits.

Previous explorers identified several prospects within Buchans’ property, including drilled intercepts (core length) of 1.1 m of 11.9% Ni, 9.6% Cu, and 0.43% Co, 0.65 m of 1.93% Ni, 1.07% Cu and 0.26% Co, and 15.7 m averaging 1.13% Ni, 0.78% Cu and 0.20% Co drilled in the late 1990s.

Originally acquired by staking an initial 9 km2 property in 2016, Buchans has continued to expand its property position in this area, including staking additional property in June 2022.  Buchans  completed reviews of past work on the property including modelling and compilation of available geophysical data by a leading consultant geophysicist in 2019.  This compilation has highlighted several anomalies warranting further follow-up as potential targets for buried Voisey’s Bay-style magmatic sulphide deposits.

Voisey’s Bay (Luk)

Buchans holds five claims (1.25 km2) located 8 km southwest of Vale’s (NYSE-VALE) Voisey’s Bay nickel-copper-cobalt mine in northern Labrador.  Known as the Luk Property, this property covers prospective troctolitic rocks that hosts the Voisey’s Bay mine on Vale’s adjacent mine property.

Buchans’ property is surrounded by Vale’s mine property, where Vale is nearing completion of a US$1.7 billion mine expansion to develop two additional underground mines adjacent to the currently operating Voisey’s Bay Ovoid open pit mine.  Buchans continues to maintain this property and plans to review available historic data prior to determining a strategy to advance this prospective nickel-copper-cobalt property.

Qualified Person:

Paul Moore, M.Sc., P.Geo., (NL), Vice President Exploration of Buchans Resources Limited and a Qualified Person as defined by National Instrument 43-101, has approved the scientific and technical disclosure in this News Release.

FINANCIAL RESULTS

Buchans recorded no revenue in the quarters ended March 31, 2023 or March 31, 2022.

For the three months ended March 31, 2023, the Company recorded a net loss of $72,334, compared to a loss of $134,814 for the quarter ended March 31, 2022. At March 31, 2023, Buchans held $292,956 in cash and cash equivalents and had a working capital deficit of $5,318, compared to a working capital surplus of $225,590 at December 31, 2022.

At March 31, 2023, the Company held 43,000,003 shares of Royalties Inc. (“Royalties”), (formerly Xtierra) which represents an approximate 21.4% shareholding. On September 30, 2022, Xtierra changed its name to Royalties Inc. and delisted from the TSX Venture Exchange. Royalties was listed on the Canadian Stock Exchange (CSE) on April 17, 2023. The market value of the company’s shares in Royalties Inc., as at May 25, 2023, based on the last market price of Royalties Inc. shares on the CSE, was $3.2 million.

 

Click here to download a copy of this News Release (PDF).

 

About Buchans Resources

Buchans Resources holds interests in zinc, lead, silver properties located in Newfoundland; gold properties in Newfoundland and in Labrador; nickel, copper, cobalt properties in Labrador, and indirectly through its shareholding in Royalties Inc. (CSE-RI), in base metal and silver projects in Mexico and, through its shareholding in Minco Exploration PLC, in base metal exploration licences in Ireland.

 

Enquiries

John F. Kearney:  Chairman & Chief Executive                                                                                            +1 416 362 6686

Paul Moore:  V.P. Exploration                                                                                                                         +1 709 738 7384

Steve Dawson:  V.P. Corporate                                                                                                                        +1 647 998 9495

Peter McParland: Director – Ireland                                                                                                      +353 (0) 46 907 3709

 

Please follow us on X (@BuchansResLtd) and on LinkedIn. Additional information available at www.BuchansResources.com

 

FORWARD-LOOKING STATEMENTS

This news release 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.