Buchans Year End 2018 Results

Buchans Year End 2018 Results

On April 30, 2019, Posted by , With Comments Off on Buchans Year End 2018 Results
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Toronto, April 30, 2019 Buchans Resources Limited (the “Company” or “Buchans”), a Canadian base metal mineral exploration and development company, reports its financial results and results of operations for the year ended December 31, 2018.

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, 2018 which are available on the Company’s website at www.BuchansResources.com  or under the Company’s profile at www.sedar.com.


Buchans has interests in zinc-lead-silver properties located in Canada, Ireland and the United Kingdom; gold properties in Newfoundland and Labrador; nickel-copper-cobalt properties in Labrador; a battery metal manganese project in New Brunswick; and, indirectly through its 22% shareholding in Xtierra Inc. (TSXV: “XAG”), in base metal and silver projects in Mexico.

Newfoundland – Base Metals

Buchans holds an extensive mineral land package in the Buchans district of central Newfoundland with interests in four undeveloped base metal deposits, including the large, lower grade, Lundberg stockwork sulphide deposit, as well as three smaller, higher grade, volcanogenic massive sulphide (“VMS”) “satellite” deposits, each with excellent exploration potential.

Lundberg Deposit – New Mineral Resource Estimate

On March 1, 2019 Buchans announced a new updated pit-constrained Mineral Resource Estimate for the Lundberg base metal deposit, located at the former Lucky Strike mine site, and a NI 43 -101 Technical Report was filed on April 15, 2019.

The new Mineral Resource Estimate, effective February 28, 2019, 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) [Zinc Equiva lent] 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), reported at a cut-off grade of US$20/t NSR within an optimized pit shell, and is considered to reflect reasonable prospects for economic extraction in the foreseeable future using conventional open-pit mining methods.

The 2019 Mineral Resource Estimate upgraded the Lundberg deposit to a more robust, pit-constrained resource, that is exemplified by its large inventory of Indicated category resources (98.7%) and represents a significant improvement over previous resource estimates. Through completion of a large amount of additional infill core drilling, extensive relogging of archived drill core, database upgrading and detailed deposit model studies in the in tervening years, the 2019 Mineral Resource Estimate reflects a 97.8% conversion of 2011 Preliminary Economic Assessment (PEA) Ultimate Pit Design Inferred Mineral Resources to Indicated Mineral Resources, at comparable grades and a slightly lower strip ratio.

The new Lundberg resource estimate demonstrates a significantly more robust project and, coupled with enhanced parameters determined by the Company’s continued assessments, including updated costs, metallurgical and metal pricing parameters, and significantly improved prevailing currency exchange rates (compared to rates used by the 2011 PEA), could result in significantly improved outcomes in future economic analyses and provides compelling rationale to undertake a new updated Preliminary Economic Assessment, or a Preliminary Feasibility Study, to assess the Lundberg project as a stand-alone open-pit mineral resource development with a low strip ratio, optimally situated on a brownfields site with excellent infrastructure.

8,000 metres of drilling in 38 holes – VMS exploration potential

 Buchans is confident that its Newfoundland mineral properties hold potential for discovery of new VMS deposits comparable to historically mined orebodies in the Buchans camp, where Asarco mined more than 16. 2 million tonnes from five separate deposits, with a combined average grade of 14.51% Zn, 7.65% Pb, 1.33% Cu, 126 g/t Ag, and 1.37g/t Au, before mine closure in 1984.

In 2018, a total of 8,000 metres of drilling was completed in 38 holes exploring the Buchans and Tulks North base metal properties in central Newfoundland. Drilling in 2018 in four target areas within a radius of 3.5 kilometres of Lundberg/Lucky Strike returned favourable results warranting further exploration for additional higher -grade resources that could potentially complement Lundberg’s development or be developed as stand-alone mining projects.

At Tulks North, located 20 km south of Lundberg, drilling returned encouraging results highlighted by the intersection of semi-massive to massive sulphide mineralized intercepts down plunge of the Bobbys and Daniels deposits, both of which have mineral resource estimates supported by NI 43-101 technical reports, that indicate the zones remain open at depth.

Exploring for gold in Newfoundland and Labrador and nickel-copper-cobalt in Labrador

 Exploration programs were also undertaken on several of the Company’s other base metal and gold properties in Newfoundland and Labrador in 2018, including the Lake Douglas gold property in Newfoundland, the Tasiuyak gold property in Labrador, and the South Voisey’s Bay nickel-copper-cobalt property in Labrador.

Zinc exploration in Ireland – Joint Ventures with Boliden

 In Ireland, Buchans is continuing exploration for zinc, both in joint venture with Boliden Tara Mines near Navan and on its own licences at Moate. Buchans also entered into a new exploration agreement with Boliden Tara Mines on six Licences in Galway.

Buchans is participating at 20% in a joint venture with Boliden Tara Mines at 80% on Licence 1440R, which lies immediately adjacent to Boliden’s large 130 million tonnes Tara zinc-lead mine at Navan. Buchans is also participating in a joint venture with Boliden Tara on Licence 3373, contiguous to the west with Licence 1440R, where Buchans can earn up to a 75% interest.

During 2018, Boliden Tara drilled one-hole of 1,225m on Licence 1440R, two kilometres to the north of the existing small Tatestown-Scallanstown deposit, and also completed an updated internal resource estimate for the Tatestown- Scallanstown deposit. On Licence 3373 Buchans completed two drill holes for a total of 636 metres. A follow-up drill hole is planned for spring 2019 to test one of four identified target areas.

Battery Grade Manganese in New Brunswick

 In New Brunswick, Canadian Manganese Corporation, a wholly owned subsidiary of Buchans Resources, holds the Woodstock manganese property containing the Plymouth manganese-iron deposit that hosts a NI 43-101 Inferred Resource and on which a positive preliminary economic assessment (“PEA”) technical report was completed in 2014.

Metallurgical development programs for Woodstock have focused  on  the production of high-grade electrolytic manganese metal and the intermediate production of purified manganese sulphate solution as an interim step, enabling the add-on production of manganese chemicals, manganese catalyst, battery grade manganese dioxide and high-purity manganese metal for electronics. Electrowinning tests consistently produced electrolytic manganese metal with a metallic manganese content of greater than 99.99% and a total manganese content ranging from 99.70% to 99.76% Mn.

Advancements in electric vehicle manufacturing are transforming the entire global automobile industry driving increased battery demand and NMC (nickel-manganese-cobalt) batteries are becoming the rechargeable battery of choice for next-generation automotive and industrial uses. Manganese is a key component in the formulations of the cathode material used in high-performance lithium-ion batteries and in utility bulk energy storage facilities, which are expected to create strong demand for high-purity manganese products.


Buchans recorded no revenue in the years ended December 31, 2018 or December 31, 2017.

For the year ended December 31, 2018, the Company recorded a loss of $42,303, compared to a loss of $5,010,599 for the year ended December 31, 2017.

The loss for the year ended December 31, 2018 included income of $464,377 , representing the fair value of Xtierra warrants received, a charge in the amount of $57,465 in the estimated fair value of investments and a gain on disposal of marketable securities of $344,037.

The loss for the year ended December 31, 2017 included a loss in market value of marketable securities in the amount of $1,287,727 and an impairment provision against exploration assets in the amount of $2,842,933.

Administrative expenses, excluding foreign exchange, for the year ended December 31, 2018 amounted to $877,426 compared to $699,096 for the year ended December 31, 2017.

During the year ended December 31, 2018, Buchans invested $2,927,034 (2017 – $1,013,209) on exploration of its mineral properties, of which the largest amounts were expended on the zinc lead projects in central Newfoundland.

At December 31, 2018, Buchans held $2,895,188 in cash and cash equivalents and had a working capital surplus of $2,760,648, compared to a working capital surplus of $6,318,009 at December 31, 2017.

At December 31, 2018, Buchans held mineral properties with a combined book value of $17,891,595. The balance sheet values for these assets may not represent that which could be obtained if the assets were to be offered for sale.


Unfortunately, throughout 2018 and to date market conditions in Canada for junior exploration companies have not been conducive to an initial public offering of the shares of a new listed company and, based on advice from the Company’s brokers and financial advisors, it has been determined to postpone the planned listing of the Company’s shares pending more favourable market conditions. Nevertheless, it is still intended to list the shares of Buchans at an appropriate time, subject to market conditions.

In the meantime, Buchans continues in good standing as a Reporting Issuer in the Provinces of  British Columbia, Alberta, Nova Scotia and Newfoundland and Labrador, and in compliance with the requirements of the Securities Acts and Securities Regulations in Canada. All public filings of the Company may be inspected under the Company’s profile on SEDAR at www.sedar.com.

Shareholders who wish to transfer their shares to another party may do so by submitting  appropriate transfer documentation in the usual manner to Computershare Investor Services in Vancouver or Toronto.


Buchans Resources Limited is incorporated under the laws of the Province of Ontario, Canada and is a “reporting issuer” in the Provinces of Alberta, British Columbia, Nova Scotia and Newfoundland and Labrador.

Buchans Resources has 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.

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.


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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