Buchans VMS Project

In January 2021, Buchans entered into a Collaboration Agreement with Boliden Mineral AB under which Boliden evaluated the Company’s Buchans VMS property in Newfoundland for possible future investment and participation.

The evaluation period was originally scheduled to end at the end of 2021 but was extended by subsequent amendments to August 31, 2022 as Boliden requested additional time to complete its due diligence and negotiate the terms of option and joint venture agreements. Under the Collaboration Boliden invested approximately $1.1 million in the Buchans project and undertook considerable technical reviews.

Agreement was reached on the terms of the option and earn-in agreement, namely the cumulative optional expenditure of $8.6 million by Boliden over four years to earn a 51% interest in the Buchans camp property, but excluding the area of the Lundberg Deposit. The option and earn-in agreement also included an option for Boliden to increase its interest to 75% by incurring further expenditures of $10 million over an additional three years, for a cumulative expenditure of $18.6 million.

Buchans and Boliden were, however, unable to reach agreement on terms for the subsequent joint venture agreement that would be formed when Boliden would have earned its interest. These unresolved terms were specifically related to the future financing of any mine that might be developed on the property, the terms of any off-take rights, and residual interests to be retained by a non-participating and diluting party.

Buchans reluctantly concluded that, although the agreed expenditure terms were attractive and reflected the Company’s investment to date and the potential of the property, the proposed terms of the potential future joint venture would not be in the best long term interests of Buchans and its shareholders and further negotiations were terminated by Boliden.

Accordingly, the Collaboration Agreement has terminated in accordance with its terms and the exclusivity granted to Boliden has ended. Boliden retains no interest in the property and all technical information developed by Boliden is to be delivered to Buchans. Boliden has been granted a right of first refusal for a period of six months ending March 1, 2023 if Buchans receives a bona fide offer from a proposed buyer to purchase the project or any part thereof.

Lundberg

In March 2019 Buchans reported an updated pit-constrained Mineral Resource Estimate for its lower-grade bulk tonnage, Lundberg base metal deposit located at the former Lucky Strike mine site. Lundberg consist of  stockwork mineralization  situated below the previous mined Lucky Strike deposit which  totaled 5.6 M tonnes averaging 18.4% Zn, 8.6% Pb, 1.6% Cu, 112 g/t Ag & 1.7 g/t Au.

The 2019 Mineral Resource 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) that contains more than 1.25 billion pounds  Zinc Equivalent, with 97.8% of the Mineral Resources in the Indicated category.  The Resource Estimate was estimated within an optimized pit shell at a cut-off grade of US$20/t NSR and is considered to reflect reasonable prospects for economic extraction in the foreseeable future using conventional open-pit mining methods. The resource applied metal price assumptions of US $1.20/lb Zn, $1.00/lb Pb, $3.00/lb Cu, $1,250/oz Au, and $17/oz Ag. Buchan’s Mine exploration

The Company is confident that its Buchans property holds potential for discovery of new VMS deposits comparable to historically mined orebodies within the current property. Buchans  also recognizes that further enhancements for mineral development of Lundberg could be achieved through exploration by the discovery of additional mineral resources immediately adjacent to the Lundberg deposit. Buchans’ exploration activities throughout 2022 have been largely comprised of relogging of archived drill core drilled by past operators as well as compilation of historic work. Together these data are being compiled into a new digital, 3-dimensional model upon which the Company intends to drive future exploration programs

The Company is currently assessing multiple target areas for the discovery of new buried high-grade ore deposits.  This work is being supported by the Company’s ongoing relogging program that has to date relogged more than 150,000 metres of archived drill core from more than 850 historic drill holes.  This work is being supplemented by ongoing reprocessing and integration of available historic data, including geophysical and geochemical data that are being incorporated into a new digital 3D geological model.  The Company, believes applying this modern technological approach in near mine exploration will yield significant opportunities for new discoveries in this historic mining camp, renowned as one of the world’s highest grade VMS camps.

Other Central Newfoundland VMS Projects

Buchans owns mineral rights to several projects, that host 3 other deposits with NI-43-101 resource estimates at Bobbys Pond, Daniels Pond and Tulks Hill, and our neighbors, NorZinc control 3 other deposits including Lemarchant, Long lake and Boomerang.

Together these favorably situated “satellite” deposits could potentially contribute production as feed for a mine and mill development at Buchans and represent a significant base metal inventory with further exploration potential.

Read more about the Bobbys Pond Base Metal Project here.

Read more about the Daniels Pond Base Metal Project here.

Read more about the Tulks Hill Base Metal Project here.