Buchans Resources Highlights 2019 Exploration In Newfoundland
Toronto, December 23, 2019 – Buchans Resources Limited (“Buchans” or the “Company”), a Canadian resource company focused on mineral exploration and development, highlights 2019 activities and progress on its base metal projects within the historic, world-renowned, Buchans mining district of central Newfoundland.
- New Resource Estimate on Lundberg Deposit
- Scoping Study on Lundberg deposit
- 10,000 metres of core relogged at Buchans in 2019
- Acquisition of MacLean Mine property
- Additional claims staked in Buchans Camp and adjacent VMS belts
- Interest in Tulks Hill Deposit increased to 100%
During 2019, the Company focused its efforts on advancing its Lundberg base metal deposit through completion of a new resource estimate and internal scoping study evaluating development options as a stand-alone open pit mine and processing complex. In addition, the Company continued exploration activities on identification and evaluation of additional target areas at Buchans through its ongoing relogging program and acquisition and staking of additional claims.
With the addition of claims acquired in 2019, the Company’s Buchans project now covers more than 72 km2, including mineral rights covering all previously mined orebodies, undeveloped deposits, and key exploration prospects within the historic Buchans mining camp.
In the Tulks belt, located approximately 20 km south of Buchans, the Company undertook follow-up field investigations of drilling results generated in 2018 within its Tulks North property that hosts the Daniels and Bobby massive sulphide deposits. The Company also acquired several additional large property positions covering extensions to the same volcanic belt hosting the Daniels and Bobbys deposits, as well as a neighboring volcanic belt that hosts the former Duck Pond mine, located 20 km east of the Tulks North property, and increased its interest in the Tulks Hill deposit to 100%.
CENTRAL NEWFOUNDLAND ZINC LEAD PROJECTS
Buchans core holdings within the Buchans mining district of central Newfoundland include mineral rights covering approximately 252 km2 (25,200 hectares) considered prospective for volcanic massive sulphide (“VMS”) Zn-Pb-Cu-Ag-Au base metal deposits. This extensive land package includes four undeveloped deposits including the large, lower grade, Lundberg stockwork deposit located beneath the former Lucky Strike massive sulphide orebody at Buchans, as well as three smaller “satellite deposits”, composed of higher-grade, volcanogenic massive sulphide mineralization. The latter include the Company’s Daniels, Bobbys and Tulks Hill deposits, each with qualified current resource estimates and excellent exploration potential. The Daniels, Bobbys and Tulks Hill deposits are located within the Company’s Tulks North and Tulks Hill properties, located less than 45 km south of Lundberg.
Buchans’ exploration strategy in Newfoundland is to continue to build on its existing resource base with the aim of developing either a stand-alone open pit mine centred on the larger lower grade Lundberg stockwork deposit, or a number of smaller higher grade VMS deposits that could be developed simultaneously and processed in a central milling facility, similar to the past-producing mines at Buchans or Duck Pond.
Work completed in 2019 will serve as a foundation for additional work in 2020 as the Company intends to assign high priority on exploration for new high-grade deposits within its Buchans project, while continuing to evaluate options for development of the Lundberg deposit. This work is expected to include exploration for additional higher grade resources immediately adjacent to Lundberg that could complement development of this large, advanced, resource asset. The Company also plans to undertake exploration programs within its Tulks North property to further assess several target areas that returned encouraging results in 2018 and 2019.
2019 Lundberg Resource Estimate
In March 2019, the Company announced a new mineral resource estimate for its Lundberg deposit located adjacent to the town of Buchans, and surrounding the former Lucky Strike mine site where ASARCO operated a near-surface underground and glory hole mining operation until mine closure in 1984. The Lundberg deposit is mainly comprised of stockwork mineralization adjacent and below the former Lucky Strike orebody, but includes some massive sulphide mineralization remaining unmined by the former operations.
The 2019 Mineral Resource Estimate was prepared by Mercator Geological Services Limited (Mercator) using a pit shell developed and optimized by MineTech International Limited, projected metal recoveries based on a previous Central Milling Facility Assessment by Thibault & Associates Inc., and a Net Smelter Return calculator prepared by Stantec Consulting Ltd. The estimate includes In-pit Indicated Mineral Resources of 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) and In-pit Inferred Mineral 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% Zn Eq).
Lundberg is now estimated to host In-pit Indicated mineral resources containing 1.25 billion pounds Zinc Equivalent as well as In-pit Inferred mineral resources containing 0.037 billion pounds Zinc Equivalent using a net smelter return (“NSR”) cut-off at US$20 per tonne. These resources are contained within an optimized model pit shell measuring 860 m by 650 m and extends to a maximum depth of 240 m. The In-Pit resource has a strip ratio of 2.9 and approximately 97.8% of the resources are assigned to the Indicated category (See Buchans News Release dated April 15, 2019 for further details).
A Technical Report entitled: “NI 43-101 Technical Report and Mineral Resource Estimate on the Lundberg Deposit, Buchans Area, Newfoundland and Labrador, Canada”, and dated April 15, 2019, was filed on SEDAR.
Lundberg Deposit Optimization Study
In November 2019, Buchans announced receipt of a conceptual (order of magnitude) study by Stantec Consulting Ltd. for an open-pit, zinc, lead and copper development at Lundberg. The study evaluated various development, mining and processing scenarios, as well as reviewed tailings disposal and shipping port options.
The study serves as a high-level options assessment for internal use by Buchans and will assist with planning for future work on the Lundberg deposit as the Company progresses towards completion of an updated assessment of the Lundberg deposit’s economic potential in the form of a new Preliminary Economic Assessment as the next phase of the project evaluation (see Buchans News Release dated November 12, 2019 for further details).
2019 Exploration Activities
Throughout 2019, the Company continued its relogging program, reviewing archived drill cores throughout its Buchans project as a means of identifying and evaluating additional exploration target areas for the discovery of new high-grade Buchans ore deposits. Since initiating this program in 2014, the Company has relogged more than 134,000 metres of archived core from 681 holes at Buchans, including than 10,800 m of core in 29 holes relogged in 2019.
This work has identified multiple target areas warranting further exploration, including the Middle Branch prospect, a focus of the relogging program in 2019. Located on the northeast corner of the Company’s Buchans property, the Middle Branch prospect was discovered by drilling in 1960 by ASARCO which intersected 1.8 m (core length) assaying 0.4% Cu, 3.1% Pb, 4.8% Zn, 48 g/t Ag & 0.7 g/t Au at approximately 550 m depth. Though deep, this area is considered highly prospective and underexplored. In October 2019, the Company staked an additional 20 claims north of the Middle Branch prospect to cover potential extensions of this mineralized trend, where there is believed to be excellent potential for discovery of new larger deposits of high-grade Buchans-style mineralization.
Also in 2019, Buchans undertook work to incorporate its extensive relogging data into an expanded digital database that the Company intends to use to create a new, digital, 3-dimensional geological model extending out from previously mined orebodies to key undeveloped prospects and exploration targets identified by the relogging program. The database is currently being developed in cooperation Mercator Geological Services of Dartmouth, Nova Scotia, who previously constructed a deposit-scale model for the Lundberg deposit. Buchans believes creation of a digital 3-dimensional geologic model will greatly enhance the Company’s ability to successfully target and explore for new, buried, high-grade deposits and the model’s construction will be a priority for 2020.
Acquisition of MacLean Mine property and staking Wiley Claims
In November 2019, the Company announced further expansion of its land position at Buchans through the purchase of the McLean Mine property covering the former MacLean mine, a significant past producer of Zn-Pb-Cu-Ag-Au; and through staking of its new Wiley property covering favourable Buchans stratigraphy 4 km southwest of the Company’s Lundberg deposit and historic mining sites.
The 1.5 km2 MacLean Mine property covers the past producing MacLean mine where ASARCO mined approximately 3.6 million tonnes of ore grading 1.1% Cu, 7.5% Pb, 13.5% Zn, 118 g/t Ag & 0.9 g/t Au prior to mine closure in 1984. This former orebody, located approximately 600 m northwest of the Lundberg deposit, represents the deepest orebody mined at Buchans, having been mined at depths ranging between 700 and 1,000 m below surface (see Buchans News Release dated November 15, 2019 for further details).
More significantly, the newly acquired MacLean Mine property also covers the inferred strike extension of favourable geology extending westward from exploration drilling completed by the Company on adjoining claims in 2018. In this drilling, hole H-18-3524 intersected 1.0 m assaying 14.83% CBM as 8.70% Zn, 4.87% Pb, 1.26% Cu, 133.2 g/t Ag and 0.47 g/t Au. (See Buchans News Release dated December 20, 2018 for details).
The 10.5 km2 Wileys property has seen comparatively little previous exploration by past operators compared to areas surrounding the past producing mines and known prospects. Previous work highlighting the potential of these claims includes discovery of base metal-rich boulders on the property by previous explorers in 2013. Historic sampling of these boulders returned assays of 10.6%Zn, 1.84%Cu, 2.27%Pb, 26.4 g/t Ag as well as 9.90%Zn, 1.31% Cu, 2.50 Pb, 19.2 g/t Ag respectively (see Buchans News Release dated November 15, 2019 for further details).
With the addition of claims acquired in 2019, the Company’s Buchans project now covers more than 72 km2, including mineral rights covering all previously mined orebodies, undeveloped deposits, and key exploration prospects within the Buchans mining camp. ASARCO’s past mining operations established Buchans as a world-renowned base metal mining camp where its operations produced more than 16.2 million tonnes of high-grade ore from five separate deposits with a cumulative average grade of 14.51% Zn, 7.65% Pb, 1.33% Cu, 126 g/t Ag, and 1.37g/t Au. ASARCO’s mining operations ran continuously at Buchans from 1928 until mine closure in 1984.
Other Central Newfoundland VMS Projects in Tulks Belt
Elsewhere in central Newfoundland, the Company undertook follow-up field work to investigate results generated by the Company’s 2018 exploration programs within its 100% owned Tulks North property. In 2018, the Company completed diamond drilling and borehole geophysical surveys at its Daniels and Bobbys massive sulphide deposits to test for extensions to mineralization below these deposits. This drilling returned encouraging results, including several mineralized intercepts that include Hole BP-18-041B, that intersected 0.85 m averaging 17.02% combined base metals (“CBM”) as 0.50% Cu, 0.02% Pb, 16.50% Zn, 28.4 g/t Ag and 0.306 g/t Au at its Bobbys massive sulphide deposit (See Buchans News Release dated December 20, 2018 for details). The 2018 programs also included property-wide airborne geophysical surveys designed to identify and further evaluate existing prospects and additional targets identified as conductive anomalies located throughout the property.
Exploration within the Tulks North property in 2019 included review and interpretation of geophysical data acquired in 2018, including conductive anomalies identified by the property-wide SkyTEM airborne geophysical surveys, as well as Crone borehole geophysical surveys undertaken at the Company’s Daniels and Bobbys deposits. Reviews of these surveys undertaken by geophysical consultants in 2019 recommended follow-up work in several target areas, including additional deep drilling at both the Daniels and Bobbys deposits where several conductors appear not to have been tested by previous drilling. In addition, review of the 2018 SkyTEM data further characterized conductive responses associated with the Daniels and Bobbys deposits and identified additional conductive targets requiring further investigation.
Based on these consultant recommendations, the Company undertook geochemical surveys and prospecting in 2019 of select areas to further assess conductive anomalies identified by the 2018 geophysical surveys. Results of this work include anomalous geochemical results returned from several conductive anomalies, and the Company plans to undertake further investigation of these anomalies in 2020.
Acquisition of Tulks Hill Deposit – 494 Claims Staked
In 2019, Buchans increased its interests in the Tulks Hill property, located approximately 25 km southwest of its Daniels deposit, to 100%. This property consist of mineral claims covering 3.6 km2, including the Tulks Hill VMS deposit. Until recently, this deposit was held within a smaller mining lease under a joint venture between Prominex Resources (Operator; 51%) and Buchans (49%). The mining lease was allowed to lapse in 2019, and upon its cancellation the mineral rights accrued to Buchans’ surrounding mineral claims. As a result, Buchans now owns a 100% interest in the Tulks Hill deposit, subject to underlying net smelter royalties ranging between 0.75% and 2%.
The Tulks Hill deposit is currently estimated to host Indicated resources (T-3 lens) totalling 431,000 tonnes averaging 0.89% Cu, 3.97% Zn, 1.61% Pb, 35.09 g/t Ag and 1.17 g/t Au [Technical Report on the Tulks Hill Cu-Zn Project, Newfoundland & Labrador, Canada, by Hrayr Agnerian, M.Sc.(Applied), P.Geo., Scott Wilson Roscoe Postle Associates Inc. July 22, 2008].
Also, earlier in 2019, the Company acquired by competitive staking several new properties totalling 494 claims (123.5 km2) in the Tulks belt and the adjacent Tally Pond belt. These properties, known as the Tulks South and South Tally properties, cover favourable geology along strike of Canadian Zinc’s Lemarchant and Boomerang deposits, and occur within the same geological terrane that hosts the former Duck Pond mine where Teck Resources mined approximately 5 million tonnes averaging 4.4% Zn, 2.7% Cu, 53 g/t Ag, and 0.6 g/t Au between 2007 and 2015.
Acknowledgment of Newfoundland Government Support
Buchans anticipates it will receive financial support for its 2019 exploration program within the Tulks property from the Junior Exploration Assistance Program sponsored by the Department of Natural Resources, Government of Newfoundland and Labrador, and gratefully acknowledges this support of the Company’s exploration efforts.
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 news release.
ABOUT BUCHANS RESOURCES
Buchans Resources currently holds interests in zinc, lead, silver properties located in Canada, Ireland and the United Kingdom; gold properties in Newfoundland and in Labrador; nickel, copper, cobalt properties in Labrador and a manganese project in New Brunswick; and, indirectly through its 22% shareholding in Xtierra Inc. (TSXV: “XAG”), in base metal and silver projects in Mexico.
On December 10, 2019 Buchans shareholders approved a group restructuring under a “Plan of Arrangement” whereby the shares of two wholly owned subsidiaries will be distributed to Buchans shareholders and both will become stand-alone, public companies (see Buchans News Releases November 4 and December 10, 2019 for further details).
Under the Plan of Arrangement, the mineral exploration business and projects now owned and operated by Buchans will be held by three separate public companies, namely:
- Buchans Resources which will retain the base and precious metals projects in the Province of Newfoundland and Labrador and the Company’s investment in base metal and silver projects in Mexico through its approximately 22% shareholding in Xtierra Inc;
- Canadian Manganese which will hold the Woodstock Manganese Project in the Province of New Brunswick; and
- Minco Exploration which will hold the mineral exploration projects in Ireland.
The Arrangement is expected to become effective on December 31, 2019.
John F. Kearney: Chairman & Chief Executive +1 416 362 6686
Danesh Varma: Chief Financial Officer + 44 (0)77409 32766
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 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.
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