Buchans Reports Third Quarter Results
Toronto, November 27, 2017 – Buchans Resources Limited (“Buchans” or the “Company”) is pleased to announce its interim financial results and update on activities for the quarter and nine-month periods ended 30 September 2017.
This news release should be read in conjunction with the Company’s unaudited condensed interim consolidated financial statements and the associated management’s discussion and analysis (MD&A) for the third quarter ended 30 September 2017 which are available on the Company’s website at www.buchansresources.com, (under the “Investor” section, ‘Corporate Reports’), or under the Company’s profile on SEDAR (www.sedar.com).
Buchans Resources Limited was incorporated on May 8, 2015 under the laws of the Province of Ontario, Canada. Buchans has interests in exploration and evaluation properties located in Canada, Ireland and the United Kingdom, and indirectly in base metal and silver projects in Mexico.
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.
On June 1, 2017, Minco and the Company reached agreement with Dalradian Resources Inc on the terms of the acquisition by Dalradian of Minco’s 2% net smelter return royalty on the Curraghinalt gold deposit in Ireland (the “Royalty Disposal”), in return for the issue of a total of 15,490,666 new Dalradian Shares valued at $20,000,000. The Royalty Disposal was structured as an offer by Dalradian for the acquisition of the entire issued share capital of Minco (the “Offer”). The Offer was implemented by means of a scheme of arrangement, under Section 450 of the Companies Act 2014 of Ireland (“Scheme”). As part of the Scheme, Minco undertook a demerger of the Company, its wholly owned subsidiary, by way of a transfer in specie of the shares of the Company to Minco Shareholders (the “Demerger”).
Following the Demerger Minco shareholders were issued 11,618,000 new Dalradian Shares which represented 75% of the total shares issued by Dalradian in connection with the Royalty Disposal. The balance of 3,872,666 new Dalradian Shares, being 25% of the total, were issued directly to the Company, which is now wholly owned by former Minco Shareholders. On August 30, 2017, the value of the 3,872,666 Dalradian shares was $6,378,509.
Pursuant to the terms of the agreements, upon completion, the Company assumed all liabilities owed by Minco including transaction costs and expenses, which amounted to a total of $1,334,876, and a capital contribution in the amount of $5,043,633 was recorded in shareholders equity.
Buchans recorded no revenue in the nine-month periods ended September 30, 2017 or September 30, 2016.
For the nine-month period ended September 30, 2017, the Company recorded a loss of $1,975,282 compared to a loss of $862,609 for the same period ended September 30, 2016. The loss for the nine-month period ended September 30, 2017 included a loss in market value of marketable securities of $1,189,136 and foreign exchange loss of $204,019 compared to a foreign exchange loss of $170,767 for the same period ended September 30, 2016.
For the three-month period ended September 30, 2017, the Company recorded a loss of $1,461,645 compared to a loss of $342,531 for the same period ended September 30, 2016. The loss for the three-month period ended September 30, 2017 included a loss in market value of marketable securities of $1,189,136 and foreign exchange loss of $85,438 compared to a foreign exchange loss of $71,710 for the same period ended September 30, 2016.
During the period ended September 30, 2017, Buchans invested $775,481 (2016- $755,218) 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, 2017, Buchans held $1,247,657 (December 31, 2016- $3,002,645) in cash and cash equivalents and marketable securities of $5,189,373 and had a working capital surplus of $4,705,000, compared to a working capital surplus of $2,796,000 at December 31, 2016. At September 30, 2017, Buchans held mineral properties with a book value of $17,557,648.
BUCHANS BASE METAL EXPLORATION
Buchans continues to focus its exploration efforts near the former Lucky Strike mine within its Buchans property in central Newfoundland to explore for high-grade resources that may positively impact open pit and underground development of the Company’s Lundberg deposit.
During the first three quarters of 2017, the program of relogging of historic archived drill cores to assess potential for discovery of additional high-grade resources at Buchans continued. Relogging in 2017 to date included 86 holes (18,359 m) from the main mineralized corridor extending between the Lucky Strike and Oriental high-grade massive sulphide deposits, as well as the Old Buchans North prospect.
Old Buchans North was discovered in 1950 and explored sporadically by Asarco until the mid-1960’s. Asarco’s drilling was severely compromised by poor core recoveries as the zone is located between two major fault structures. Historic intercepts include 2.74 m assaying 23.7% Zn, 9.0% Pb, 2.6% Cu, 147.4 g/t Ag & 3.4 g/t Au. Drilling by Buchans Minerals in 2009 and 2010 benefited from improved core recoveries using larger diameter core drilling, and demonstrated the zone to be larger and more continuous than previously interpreted.
The 2017 relogging results indicate that the Old Buchans North prospect remains open down dip to the northwest at a depth of 450 metres. Several target areas have been identified and are undergoing further investigation by relogging and will be targeted by follow-up diamond drilling in 2018.
A helicopter airborne geophysical survey of the Buchans property using the SkyTEM helicopter TDEM system was completed in June in co-operation with Adventus Zinc Corporation which holds adjoining properties. The survey data has been have forwarded to consultant geophysicist for further review and target identification.
In addition to relogging at Buchans, limited relogging was completed to re-assess the Company’s Daniels Pond and Bobbys Pond deposits located less than 20 km south of Buchans, on the opposite side of Red Indian Lake. Relogging at these sites was in part undertaken to identify areas where further exploration may discover additional resources beneath the Daniels Pond and Bobbys Pond deposits and further enhance development of these deposit as satellite mines contributing to a central processing facility. This work included relogging 20 holes totalling 3,233 metres of archived drill core.
At Daniels Pond, depth potential is highlighted by the Massive Pyrite zone, a lobe of essentially barren pyrite with locally elevated base metals that suggest the lobe may represent a zoned, distal pyritic margin of a higher grade massive sulphide zone at depth. At Bobbys Pond, depth potential for additional massive sulphides is highlighted by two main plunge trends within the deposit that remain poorly explored below the known resource.
After the end of the period Buchans staked nine additional claims southwest along strike of the Daniels Pond deposit to cover the possible on strike extension of the Daniels Pond deposit horizon 3 km along strike from the deposit.
LAKE DOUGLAS GOLD, NEWFOUNDLAND
In October of 2016, Buchans competitively staked 2,075 hectares in central Newfoundland, known as the Lake Douglas project, 40 km southwest of the Buchans project and 20 km southwest of the Company’s Daniels Pond and Bobbys Pond deposits.
The Lake Douglas Property includes prospective rocks extending between recently discovered prospects controlled by Antler Gold Inc. (ANTL:TSXV) who optioned the project from Altius Minerals Corporation (ALS.TSX) after Altius announced discovery of several showings within the 21,500 ha, Wilding Lake gold project. Buchans’ Lake Douglas property covers favourable stratigraphy within the core of Antler’s project located between the Alder and Jigger gold discoveries.
Since acquiring the Lake Douglas property, Buchans has conducted initial reconnaissance work on its claims and completed a compilation of previous work from historic assessment files. The initial reconnaissance and compilation confirm the presence of favourable Rogerson Lake rocks on the property that remain essentially unexplored as they were not considered prospective for VMS deposits by previous holders. Buchans prospecting results include one anomalous gold value in quartz float located east of the Rogerson Lake Conglomerate assaying 913 ppb Au (0.9 g/t Au).
Buchans’ property covers a 3.5 km segment of the prospective trend located northeast, along strike of Marathon Gold Corporation’s (MOZ.TSX) Valentine Lake project.
Marathon has reported that the Valentine Lake Gold Camp currently hosts four near-surface, mainly pit-shell constrained, deposits with measured and indicated resources totalling 1,388,200 oz. of gold at 1.91 g/t and inferred resources totalling 766,500 oz. of gold at 2.24 g/t, in each case including both open pit and underground potential. The four deposits outlined to date occur over a 20-kilometer system of gold bearing veins, with much of the 24,000-hectare property having had little detailed exploration activity to date.
ABOUT BUCHANS RESOURCES
Buchans Resources Limited has interests in exploration and evaluation properties located in Canada, Ireland and the United Kingdom, and indirectly in base metal and silver projects in Mexico.
Buchans also holds an approximate 26% shareholding in Xtierra Inc., (TSXV:“XAG”), which holds mineral properties in Mexico and approximately 3.4 million shares in Dalradian Resources Inc. (TSX:“DNA”) which is developing the Curraghinalt gold deposit in Ireland.
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
# # # # #