The Buchans Base Metal Project is located in central Newfoundland and covers the former producing Buchans Mine and includes the Company’s undeveloped Lundberg deposit. The Buchans base metal project comprises four advanced base metal properties in the Buchans area of central Newfoundland that contain numerous exploration prospects.
Namely, these are:
- the 100% owned Buchans property, which contains the Lundberg deposit;
- the 100% owned Tulks North property, which contains the Daniels Pond deposit;
- the 100% owned Bobbys Pond property, which contains the Bobbys Pond deposit; and,
- a 49% joint venture interest in the Tulks Hill property, which contains the Tulks Hill deposit.
The information relating to the Lundberg deposit in the following sections has been largely extracted from the report entitled, “NI 43‐101 Technical Report and Mineral Resource Estimate On The Lundberg Deposit, Buchans Area, Newfoundland And Labrador, Canada” dated February 28th, 2019 that was prepared by Matthew Harrington, P. Geo., Michael Cullen, P.Geo., Shaun O’Connor, P. Geo., Timothy McKeen, P. Eng., and Douglas Roy, P. Eng. as Independent Qualified Persons as well as Paul Moore, P. Geo., and David Butler, P. Geo. as Qualified Persons, as defined by NI 43-101, as filed on SEDAR on April 15, 2019.
The Lundberg Report is intended to be read as a whole document, and sections should not be read or relied upon out of context. The technical information in the Lundberg Report is subject to the assumptions and qualifications contained in the Lundberg Report. For readers to understand the technical information on Lundberg in this document, they should read the Lundberg Report (2019) filed under the Company’s profile on www.sedar.com in its entirety, including all qualifications, assumptions and exclusions that relate to the technical information set out in this document.
The Lundberg copper-zinc-lead-silver-(gold-barite) deposit is at the core of Buchans base metal project in the Buchans camp.
Buchans is located approximately 530 km by highway west of the provincial capital city of St. John’s and is accessible via paved Route 370 from its junction with the Trans-Canada Highway at the town of Badger, approximately 70 km north of Buchans. The nearest major airports are Gander International Airport and Deer Lake Regional Airport, which are located 128 km east and 181 km west of the town of Badger, respectively.
Access to the Lundberg deposit area for exploration purposes is by a network of paved and gravel roads extending from the community of Buchans in central Newfoundland, providing year-round access to the property. The Lundberg Deposit is situated at the southwest periphery of the community of Buchans.
In 2008, a National Instrument 43-101 (“NI 43-101”) compliant resource estimate was prepared for the Lundberg and Engine House zones by Mercator. The Lundberg Zone was reported to contain Inferred resources totaling 15,690,000 tonnes grading 1.96% Zn, 0.83% Pb, 0.38% Cu, 6.57 g/t Ag, 0.08 g/t Au and 2.36% BaSO4, and the Engine House Zone was separately reported to contain Inferred resources totaling 890,000 tonnes grading 2.37% Zn, 0.95% Pb, 0.96% Cu, 11.29 g/t Ag, 0.15 g/t Au and 4.40% BaSO4 (Webster and Barr, 2008).
In August 2011, the Lundberg Project was reviewed by Tetra-Tech Wardrop Engineering Inc. (Tetra Tech WEI) in connection with the completion of a NI 43-101 compliant Preliminary Economic Assessment (“PEA”) of the Lundberg and Engine House zones, entitled “Preliminary Economic Assessment on the Lundberg and Engine House Deposits, Newfoundland, Canada”, dated August 11, 2011 and prepared for Buchans Minerals by Tetra Tech WEI (“2011 PEA”).
The 2011 PEA identified the combined Lundberg and Engine House deposits (using estimates of Inferred mineral resources as of November 3, 2008) as having potential to support stand-alone 5,000 tonne per day open pit mining and milling operations over a 10-year life of mine. The 2011 PEA suggests sufficient developable area exists in the immediate area to accommodate development of a mine and mineral processing facility, including tailings and associated disposal areas. Buchans has secured land access agreements with surface right holders for the purpose of mineral exploration.
In March 2013, Mercator prepared an updated mineral resource estimate for the combined Lundberg and Engine House zones, including results for this new drilling and upgraded the majority of the previously estimated Inferred resource of 21.82 million tonnes, as well as increased the overall tonnage as Indicated resources of 23.44 million tonnes and an additional Inferred resource to 4.31 million tonnes.
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 2019 Mineral Resource Estimate, containing more than 1.25 billion pounds Zinc Equivalent, with 98.7% of the Mineral Resources in the Indicated category, demonstrates a significantly more robust project which provides compelling rationale to undertake a new updated Preliminary Economic Assessment, or a Preliminary Feasibility Study, to assess Lundberg as a stand-alone open-pit mineral resource development with a low strip ratio, optimally situated on a brownfields site with excellent infrastructure.
Lundberg Deposit In-Pit Mineral Resource Estimate – Effective February 28, 2019
|NSR Cut-off (USD/t)||Category||Tonnes||Zn %||Pb %||Cu %||Ag g/t||Au g/t||Zn Eq. %||NSR (USD/t)||Strip Ratio|
- Mineral Resource tonnages have been rounded to the nearest 10,000. Totals may vary due to rounding.
- Price assumptions used were US $1.20/lb Zn, $1.00/lb Pb, $3.00/lb Cu, $1,250/oz Au, and $17/oz Ag.
- Metallurgical recoveries to concentrates are based on the Central Milling Facility Assessment (Thibault & Associates Ltd., 2017). Metal recoveries are 83.0% Cu, 13.3% Au, and 7.84% Ag in the copper concentrate, 84.3% Pb, 10.5% Au, and 50.3% Ag in the lead concentrate, and 87.2% Zn, 8.28% Au, and 14.8% Ag in the zinc concentrate.
- Net Smelter Return (NSR) USD/t values were determined by calculating the value of each Mineral Resource model block using an NSR calculator prepared by Stantec Consulting. The NSR calculator uses the stated metal pricing, metallurgical recoveries to concentrates, concentrate payable factors and current shipping and smelting terms for similar concentrates.
- Zinc Equivalent metal grade (Zn Eq. %) was calculated as follows using metal pricing, metallurgical recoveries to concentrates, and concentrate payable factors as applied in the NSR calculator: Zn Eq % = Zn % + ((Cu % x 22.046 x 0.8020 x 3) + (Pb % x 22.046 x 0.8010 x 1) + (Au g/t / 31.10348 x 0.2198 x 1250) + (Ag g/t / 31.10348 x 0.6514 x 17))/(1.20 x 22.046 x 0.7412).
- The Mineral Resource pit shell was developed and optimized by MineTech International Limited. Optimization parameters include: mining at US $3 per tonne, processing at US $15 per tonne, and G&A at US $2 per tonne (total US $20).
- A cut-off value of $20 USD/t NSR within the optimized pit shell was used to estimate Mineral Resources.
- Mineral Resources were interpolated using Inverse Distance Squared methods applied to 1.5 metre downhole assay composites.
- Results of an interpolated Inverse Distance Squared bulk density model (g/cm3) were applied.
- Mineral Resources are considered to reflect reasonable prospects for economic extraction in the foreseeable future using conventional open pit mining methods.
- Mineral Resources do not have demonstrated economic viability.
- This estimate of Mineral Resources may be materially affected by environmental, permitting, legal title, taxation, socio-political, marketing, or other relevant issues.
In summary, the Lundberg deposit 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 an NSR cut-off at US$20 per tonne. These resources are contained within an optimized model pit shell measuring 860 metres by 650 metres and extends to a maximum depth of 240 metres. The In-Pit constrained resource has a strip ratio of 2.9 of which approximately 98.7% of the resources are assigned to the Indicated category resources.
While the 2019 Mineral Resource Estimate excludes significant volumes of mineralization within the Lundberg deposit from classification as Mineral Resources, it should be noted that much of the excluded volume lies beneath the bottom of the current pit shell and has potential to be included in future optimized pit shells subject to changes in metal prices or other parameters defined for future optimization and mineral resource estimation.
The new 2019 Mineral Resource Estimate updated the Lundberg deposit to a more robust, pit-constrained resource, that is exemplified by its large inventory of Indicated category resources 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 intervening years, the 2019 Mineral Resource Estimate reflects a 97.8% conversion of 2011 PEA Ultimate Pit Design Inferred Mineral Resources to Indicated Mineral Resources at comparable grades and a slightly lower strip ratio.
Mineral Processing and Metallurgical Testing
In 2010, BMC retained SGS Lakefield Research Limited (“SGS”) of Lakefield, ON to carry out mineral processing and metallurgical testing on three representative samples of mineralized material from the Lundberg and Engine House zones. Results of this work were used by Coley at al. (2011) in the PEA prepared by Wardrop.
The mineralization tested by SGS consisted of stockwork style Cu, Pb and Zn sulphides in association with non-sulphide phases such as quartz, chlorite and lesser amounts of barite. The only copper bearing sulphide mineral identified was chalcopyrite, the only lead mineral present was galena, and the zinc mineralization occurred exclusively as sphalerite. Iron was distributed in primary sulphides including chalcopyrite, sphalerite, galena and pyrite. There was no arsenopyrite present as quantified by the associated study of mineralogy.
Metallurgical process development studies focused on flotation recovery of copper and lead followed by zinc. After completion of testing, the most appropriate flow sheet for processing of future mineralization, typified by the sample material, was assembled. Initial grinding of mill feed to 80% passing 52 μm was established for flotation circuit feed materials.
2016 Testwork and Metallurgical Studies
During 2016, Buchans, through its wholly owned subsidiary Buchans Minerals Corporation, in a collaboration agreement with Canadian Zinc Corporation (TSX:CZN) successfully completed a research programme to evaluate the metallurgical characteristics of their respective volcanogenic massive sulphide (“VMS”) Zn-Pb-Cu-Ag-Au base metal deposits in central Newfoundland.
The metallurgical research study demonstrated that the ore from Buchans Lundberg, Daniels Pond and Bobbys Pond deposits can be successfully processed in a central mill using a sequential flotation flowsheet, and that selective zinc, lead and copper concentrates at marketable grades can be produced from these deposits.
The programme focused its evaluation on five VMS deposits, three held by Buchans (Lundberg, Bobbys Pond and Daniels Pond) and two held by Canadian Zinc (Lemarchant and Boomerang-Domino). The Lundberg deposit is the largest, most advanced property in terms of resource definition, mine planning (with the potential to have an open pit mine), metallurgical testing and economic studies completed to date. All the other mineral deposits (Bobbys Pond, Daniels Pond, Lemarchant and Boomerang-Domino) are smaller, higher grade deposits, amenable to underground mining, that may not individually support a mine and processing operation. The principal goal of the research program was to assess the technical and economic viability of developing a number of these mineral deposits utilizing a common central processing facility.
The metallurgical portion of the program was successful in confirming that selective zinc, lead and copper concentrates at marketable grades can be produced using a common flotation flowsheet for all five deposits. The positive results from the metallurgical test program strongly support the development of the sequential flotation technology for processing of the central Newfoundland deposits using a centralized processing facility.
The positive results of the research project provide valuable direction to guide future exploration on Buchans central Newfoundland volcanogenic massive sulphide (“VMS”) Zn-Pb-Cu-Ag-Au base metal deposits and the conceptual economic modelling provided key information on which to focus future economic studies and development plans for advancing the development of the Lundberg and satellite deposits using a central milling facility.
It is significant from a metallurgical standpoint, that these five different deposits can be processed on a common flotation flowsheet representing a key step forward in evaluating the viability of centralized milling as a development opportunity for these projects. The initial economic simulations utilizing this new metallurgical data provides valuable information and direction upon which to guide our future exploration and development plans for our Newfoundland deposits.
Qualified Person and Sampling Procedure
Paul Moore, M.Sc., P.Geo., (NL), Buchans Minerals Vice President of Exploration, a Qualified Person within the meaning of National Instrument 43-101 of the Canadian Securities Administrators, has reviewed the contents of this release for accuracy.
The information relating to the Lundberg deposit in the aforementioned sections has been largely extracted from the report entitled, “NI 43‐101 Technical Report and Mineral Resource Estimate On The Lundberg Deposit, Buchans Area, Newfoundland And Labrador, Canada” dated February 28th, 2019 that was prepared by Matthew Harrington, P. Geo., Michael Cullen, P.Geo., Shaun O’Connor, P. Geo., Timothy McKeen, P. Eng., and Douglas Roy, P. Eng. as Independent Qualified Persons as well as Paul Moore, P. Geo., and David Butler, P. Geo. as Qualified Persons, as defined by NI 43-101, as filed on SEDAR on April 15, 2019.