Buchans Reports Results for Year Ended December 31, 2017
Toronto, April 30, 2018 – Buchans Resources Limited (“Buchans” or the “Company”) reports its year-end results for December 31, 2017.
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 year ended December 31, 2017 which are available on the Company’s website at www.buchansresources.com, under the “Investor” section, under ‘Corporate Reports’ or under the Company’s profile on SEDAR (www.sedar.com).
Buchans Resources Limited (the “Company” or “Buchans”) 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, in base metal and silver projects in Mexico. Substantially all of the Company’s efforts are devoted to financing and developing these properties. At December 31, 2017 Buchans also held 2.37 million shares of Dalradian Resources Inc, which is developing the Curraghinalt gold deposit in Ireland.
At December 31, 2017, Buchans held $3,426,194 in cash and cash equivalents and marketable securities of $3,143,782 and had a working capital surplus of $6,318,009.
ZINC-LEAD EXPLORATION IN NEWFOUNDLAND
Buchans holds an extensive mineral land package in the Buchans district of central Newfoundland with four undeveloped deposits including the large, lower grade, Lundberg deposit, as well three smaller, higher-grade, massive sulphide VMS “satellite” deposits, each with excellent exploration potential.
Buchans exploration strategy in Newfoundland is to continue to build on its existing resource base with the aim of developing either a stand-alone mine, centered on the Lundberg open pit, or a number of smaller deposits that could be developed simultaneously and processed in a central milling facility, similar to the past-producing mines at Buchans or Duck Pond.
In 2017, a program of relogging of historic archived drill cores was undertaken to assess potential for discovery of additional high-grade and near-surface lower grade resources at Buchans. In 2017, the Company relogged 111 holes (~24,000 m) from the two-kilometre long mineralized corridor extending between the former Lucky Strike and Oriental high-grade massive sulphide mines, including the undeveloped Old Buchans North prospect. Several target areas of underexplored favourable stratigraphy, occurring down dip of previously mined orebodies at depths of less than 350 metres and undeveloped prospects have now been identified in this area.
The planned 2018 exploration program in Newfoundland includes 5,000 metres of drilling in approximately twenty holes and will be the largest drilling program undertaken at Buchans in the past five years.
Further studies will be undertaken in 2018 to assess the potential development of Lundberg as an open pit mine. The Lundberg resource will be updated and remodelled to upgrade and expand resources beneath and east of the current resource. Optimization studies are also planned to examine mining lower tonnages at higher grades to evaluate the potential to yield higher IRRs at lower capital costs.
It is expected that these internal optimization and scoping studies to be carried out in 2018 will provide a path forward for completion of a Preliminary Feasibility Study (PEA) on Lundberg.
LEAD-ZINC EXPLORATION IN IRELAND
In Ireland, Buchans is continuing exploration for zinc, both on its own licences at Moate and in joint venture with Boliden Tara Mines Limited on Prospecting Licence 1440R, which lies immediately adjacent to Boliden’s large 130 million tonne Tara zinc lead mine at Navan.
Buchans has also recently entered into a new joint venture agreement with Boliden Tara Mines on Licence 3373, contiguous to the west with Licence 1440R. Under terms of this agreement Buchans can earn a 75% joint venture interest through expenditure of €250,000, in staged programmes, by August 31st, 2024.
FINANCIAL RESULTS FOR 2017
Buchans recorded no revenue in the years ended December 31, 2017 or December 31, 2016.
For the year ended December 31, 2017, the Company recorded a loss of $5,010,599 compared to a loss of $1,050,744 for the year ended December 31, 2016. The loss for the year ended December 31, 2017 included an impairment of exploration expenditures in the amount of $2,842,933, a loss on disposal of marketable securities of $523,605 and a loss in market value of marketable securities of $764,122. Administrative expenses, excluding foreign exchange, for the year ended December 31, 2017 amounted to $699,096 compared to $813,223 for the year ended December 31, 2016.
A provision in the amount of $2,842,933 was recorded against the carrying value of mineral exploration assets in the Pennines, UK, in accordance with the Company’s accounting policies, as no drilling had been carried out since 2015 and due to delayed renegotiation of underlying contracts and agreements.
During the year ended December 31, 2017, Buchans invested $1,013,209 (2016- $1,043,927) on exploration of its mineral properties, of which the largest amounts were expended on the Buchans zinc lead project in central Newfoundland.
In December 2017, the Company raised $2,004,000 through the issue of 6.6 million flow-through shares at $0.30 per share in a non-brokered, arms-length, private placement financing. The proceeds of the private placement will be used to incur eligible Canadian Exploration Expenses to explore the Company’s mineral properties in Canada during 2018, including the Lundberg, Daniels Pond and Bobbys Pond properties in central Newfoundland.
At December 31, 2017, Buchans held $3,426,194 (December 31, 2016- $3,002,645) in cash and cash equivalents and marketable securities of $3,143,782 and had a working capital surplus of $6,318,009, compared to a working capital surplus of $2,795,781 at December 31, 2016.
At December 31, 2017, Buchans held 2.4 million shares of Dalradian Resources Inc, which is developing the Curraghinalt gold deposit in Ireland, valued at $3.1 million.
At December 31, 2017, Buchans held mineral properties with a combined book value of $14,964,561. The balance sheet values for these assets may not represent that which could be obtained if the assets were to be offered for sale.
ABOUT BUCHANS RESOURCES
Buchans Resources Limited (the “Company” or “Buchans”) 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 exploration and evaluation properties located in Canada, Ireland and the United Kingdom, and indirectly on base metal and silver projects in Mexico. Substantially all the Company’s efforts are devoted to financing and developing these properties.
Buchans also holds an approximate 22% shareholding in Xtierra Inc., (TSXV: “XAG”), which holds mineral properties in Mexico. The affairs of Xtierra Inc have been restructured with Buchans now Xtierra’s largest shareholder and holding the contingent option of acquiring the Bilbao base metal property in Mexico in settlement of outstanding debt.
John F. Kearney: Chairman & Chief Executive +1 416 362 6686
Danesh Varma: Chief Financial Officer +44 (0) 207 653 9881
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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