Buchans Intersects High-Grade Massive Sulphides and Extensive Stockwork Mineralization in drilling at Lundberg Deposit in central Newfoundland

Buchans Intersects High-Grade Massive Sulphides and Extensive Stockwork Mineralization in drilling at Lundberg Deposit in central Newfoundland

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Toronto, July 31, 2018 – Buchans Resources Limited (“Buchans” or the “Company”) is pleased to announce interim results from its ongoing 5,000 metre drilling programs at its base metal exploration projects in central Newfoundland.

HIGHLIGHTS

  • Initial drilling results from the Lundberg deposit area confirms resource and suggests potential to expand the resource at depth and near surface to the northeast – additional holes in this area planned.
  • Drilling on the western limit of Lundberg encountered high-grade massive sulphides as remnants of the former Lucky Strike orebody left by previous underground mining, including 1.8 m of 4.29% Cu, 11.62% Pb, 16.30% Zn, 85.4 g/t Ag & 1.39 g/t Au (32.22% combined base metals).
  • Drilling continues at Buchans with more than 1,200 metres drilled to date in 14 holes. Targets to date include Lundberg, east of the former Oriental mine, and at the undeveloped Sandfill prospect.

LUNDBERG DRILLING RESULTS

The following table provides a summary of available drilling results received to date.  All results are from the Lundberg deposit area and a map showing hole locations relative to the Lundberg resource is available at www.BuchansResources.com.

Hole From m To m Width m Cu % Pb % Zn % Ag g/t Au g/t *CBM% Comments
H-18-3500 43.60 44.60 1.00 0.59 7.90 13.50 109.90 1.93 21.99  massive sulphides
  44.60 46.50 1.90             mine workings – void
  46.50 48.30 1.80 4.29 11.62 16.30 85.37 1.39 32.22  massive sulphides
  58.10 59.10 1.00 1.23 0.24 0.23 47.50 0.94 1.70  stockwork sulphides
H-18-3501 22.10 23.00 0.90 0.26 0.37 1.86 4.10 0.07 2.49  stockwork sulphides
  52.00 80.00 28.00 0.34 0.83 1.47 3.00 0.05 2.63  stockwork sulphides
incl. 52.00 69.00 17.00 0.46 1.18 1.91 3.72 0.06 3.56
incl. 54.00 60.00 6.00 0.82 2.10 2.94 3.90 0.06 5.86
H-18-3502 22.00 43.00 21.00 0.06 0.04 0.08 0.77 0.02 0.17 stockwork sulphides
H-18-3503 23.00 50.00 27.00 0.09 0.12 0.27 0.75 0.03 0.48 stockwork sulphides
  39.00 40.00 1.00 0.77 1.75 2.34 3.80 0.11 4.86 stockwork sulphides
H-18-3504 17.30 36.00 18.70 0.05 0.16 0.49 0.95 0.04 0.70 stockwork sulphides
H-18-3505 68.00 220.00 152.00 0.27 0.71 1.50 4.20 0.05 2.49 stockwork sulphides
incl. 93.00 111.00 18.00 0.35 1.24 2.45 4.43 0.04 4.04
incl. 139.00 151.00 12.00 0.26 1.01 2.30 4.95 0.05 3.57
incl. 168.00 174.00 6.00 0.24 1.23 2.78 3.45 0.03 4.24
incl. 185.00 192.00 7.00 0.62 1.14 1.64 6.39 0.06 3.41

* CBM%-combined copper (Cu%) + lead (Pb%)+zinc (Zn%).

Key findings are as follows:

  • Drilling on the west margin of the Lundberg deposit (H-18-3500) returned potentially significant results intersecting two zones of high-grade massive sulphides adjacent to historic underground workings.

Intercepts include 1.0 m assaying 0.59% Cu, 7.90% Pb, 13.50% Zn, 109.9 g/t Ag & 1.93 g/t Au (i.e., 21.99% combined base metals) as well as 1.8 m assaying 4.29% Cu, 11.62% Pb, 16.30% Zn, 85.4 g/t Ag & 1.39 g/t Au (i.e., 32.22% combined base metals).

The occurrence of remnants of high-grade Lucky Strike ore that may be exploited by a Lundberg open pit is potentially significant.  The Company intends to further review historic mine documents to determine if there may be other remnants including pillars etc. that could enhance Lundberg’s development.

Weak Lundberg stockwork style mineralization was encountered below the Lucky Strike mineralization and is not expected to add to the Lundberg resource in this area.

  • Hole H-18-3501, drilled on the northeast margin of the deposit, cut 28.0 m 0.34% Cu, 0.83% Pb, 1.47% Zn, 3.0 g/t Ag & 0.05 g/t Au starting at a depth of 52 m.  Based on this intercept, additional holes are planned in this area to test for near surface extensions to the deposit during the current drill program.
  • Hole H-18-3505, drilled immediately north of the former Lucky Strike glory hole to upgrade Inferred resources to the Indicated category, intersected a large width of strong stock work mineralization.  The hole cut 152.0 m averaging 0.27% Cu, 0.71% Pb, 1.50% Zn, 4.20 g/t Ag & 0.05 g/t Au (i.e., 2.63% combined base metals) including several sections of higher grade material averaging ~4% combined base metals.

This hole was originally proposed to drill to 200 m depth but finished at 248 m as the strong stockwork mineralization extended to 220 m, extending mineralization below the previous resource.  Based on this intercept, additional holes are planned in this area to test for extensions to the deposit at depth during the current drill program.

CENTRAL NEWFOUNDLAND ZINC LEAD PROJECTS

In central Newfoundland Buchans is currently undertaking a 2,200-metre drilling program to further delineate and upgrade the Company’s Lundberg deposit, as well as explore several other target areas located less than three kilometres from Lundberg (Buchans news release dated May 25, 2018).  The other target areas include the Two-Level, West Orebodies, Oriental East and Sandfill target areas where the Company is exploring for additional resources that could be exploited with Lundberg as possible additional open pits and/or underground development sites.

Results from the Lundberg drilling will be compiled with previous drilling results obtained in 2014 and 2015 that extended mineralization beyond the limits of the currently defined resource estimate compiled in 2013.

Buchans has engaged Mercator Geological Services of Dartmouth, Nova Scotia to prepare a new resource estimate expected to be available in Q3 of 2018.  In addition, Buchans has engaged AGP Mining Consultants Inc. of Toronto, to conduct an internal scoping study to evaluate and assess possible mining and processing scenarios for development of Lundberg as an open pit mine, including further application of Dense Media Separation (“DMS”) technology.  It is expected that the updated resource estimate and scoping study will provide a path forward for completion of a Preliminary Feasibility Study (PEA) on Lundberg as an open-pit, zinc, lead and copper mine.

To date, Buchans has completed 14 holes (total 1,200 m), including drilling at the Oriental East area, immediately east of the high-grade, former Oriental mine where the Company is exploring for moderate-grade, near surface extensions to the Oriental deposit.

Drilling is currently in progress at the undeveloped Sandfill prospect located approximately 1 kilometre north of the former Oriental Mine.  Samples from several additional complete holes have been submitted for assay and results will be announced when available.

Buchans has applied for grant funding from the Government of Newfoundland and Labrador’s 2018 Junior Company Exploration Assistance (“JEA”) program, from which the Company may receive grants of up to $150,000 to support the current program.  Buchans wishes to acknowledge the Government of Newfoundland and Labrador and the JEA program for grants obtained in past years, as well as any grants it may receive in 2018.

DRILLING AT DANIELS NOW IN PROGRESS

A second rig has been mobilized to the Company’s Tulks North property, 20 kilometres south of Buchans, where drilling is being undertaken to explore for additional resources below the Company’s Daniels deposit.

Three holes are planned for Daniels, while two additional holes are planned to explore the Company’s nearby Bobbys deposit, located 8 km northeast of the Daniels deposit.

QUALIFIED PERSON

Paul Moore, M.Sc., P.Geo., (NL), Vice President of Exploration of Buchans, a Qualified Person within the meaning of National Instrument 43-101, has reviewed the technical contents of this release for accuracy. 

SAMPLING PROCEDURE

Drill cores were logged and sampled by Buchans’ geological and technical staff with cores descriptively logged on site, aligned, marked for sampling and split longitudinally using a diamond saw.  Samples consist of halved NQ-size core (47.6 mm diameter core) with the remaining half of the core preserved for future reference.  As part of the Company’s QAQC protocols, samples were bagged, tagged, sealed and delivered directly to Eastern Analytical Limited’s laboratory in Springdale, Newfoundland, by Company personnel.  Samples are nominally one metre in length, except where specific geologic parameters required a different interval be sampled.  Sample preparation was completed by Eastern Analytical with each sample crushed to approximately -10 mesh and split using a riffle splitter to approximately 300 g.  Each sample split was pulverized using a ring mill to approximately 98% -150 mesh.  In addition to regular samples, blank samples (one per 20 samples), field duplicates(quartered core; one per 40 samples) and certified standards (one per 20 samples) were also submitted for sample preparation and assay.

All assays were completed by Eastern Analytical of Springdale Newfoundland by the inductively coupled plasma method (ICP-34) for base metals (Cu, Pb, Zn) and to Ore Grade Assay Cu, Pb and Zn if upper detection limits by ICP were exceeded for either element (upper detection limits; Cu 10,000 ppm, Pb 2,200 ppm, Zn 2,200 ppm).  ICP analyses were completed using a 0.500 g sample digested in nitric and hydrochloric acid and analyzed by ICPOES (Inductively Coupled Plasma Optical Emission Spectroscopy).  Base metal Ore Grade Assays (Cu, Pb, Zn) were completed using a 0.200 g sample digested in nitric and hydrochloric acid and analyzed by the atomic absorption spectroscopy (AA) method.  Silver assays were completed using a 1,000 mg sample digested in hydrochloric and nitric acid and analyzed by AA.  Gold assays were completed by standard ½ assay ton fire assay using the AA method.

 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 (“Minco”) 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 Canada and, indirectly through its 22% shareholding in Xtierra Inc. (TSXV: “XAG”), in base metal and silver projects in Mexico.

Enquiries:       info@buchanslimited.com

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.

FORWARD-LOOKING STATEMENTS

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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