Buchans Resources Reports Second Quarter 2023 Results
August 25, 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 second quarter ended June 30, 2023.

This news release should be read in conjunction with the Company’s interim financial statements and the associated management’s discussion and analysis (MD&A) for the six-month period ended June 30, 2023 which are available on the Company’s website at www.BuchansResources.com or under the Company’s profile at www.sedarplus.ca.

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.

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 1.37 g/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.

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 Corp. (NFG.TSX.V) at its Queensway Gold Project.

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 Queensway project. As a result of these discoveries, the central Newfoundland gold belt is currently the focus of significant exploration activity and investment.

Buchans also maintains a portfolio of other base metal and gold projects throughout Newfoundland and Labrador, including Ni-Cu-Co sulphide projects near Vale’s (VALE.NYSE) 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 Ireland through its 14.4% shareholding in Minco Exploration PLC, and held 43,000,003 shares of Royalties Inc. (“Royalties”) at a fair market value of $2,795,000 at June 30, 2023.

Buchans Base Metals Project

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].

Buchans believes Lundberg represents an important resource asset and intends to continue to advance 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).

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 June 30, 2023 or June 30, 2022.

For the three months and six months ended June 30, 2023, the Company recorded income of $2,711,454 and $2,632,310, respectively.  These results include a reversal of impairment in the amount of $2,330,663 and a gain in fair value of marketable securities of $464,338.

During the period ended June 30, 2023, the Company’s shareholding in Royalties Inc. (formerly Xtierra Inc.) decreased from 21.4% to 19.9%. As a result, the investment is no longer considered to be an associate but rather shares in marketable securities.  A reversal of earlier impairments in Xtierrra in the amount of $2,330,663 was recorded in the statement of income/(loss) and comprehensive income/(loss). In addition, a fair value gain of $464,337 was recorded.

For the three months and six months ended June 30, 2022, the Company recorded a loss of $167,586 and $302,399, respectively.

At June 30, 2023, Buchans held $108,674 (December 31, 2022- $562,396) in cash and cash equivalents and $2,800,500 in marketable securities, and had a working capital surplus of $2,632,274.

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.