ASX Announcement | 5 October 2023 Variscan Mines Limited (ASX:VAR) NEW THICK LOWER LENS OF HIGH-GRADE ZINC DEFINED AT SAN JOSE MINE - UPTO 25% ZINC INTERSECTED Highlights • • • • High grade zinc assay results from current underground drilling campaign have defined a new lower lens of high grade zinc mineralization below La Catedral stope in the San Jose Mine Selected drilling results: o NDDT007B 21.85m @ 8.50% Zn, 0.38% Pb  including 18.05m @ 10.22% Zn, 0.46% Pb o NDDT007 23.35m @ 7.09% Zn, 1.72% Pb  including 11.0m @ 11.58% Zn, 3.35% Pb o NDDT014 14.55m @ 5.81% Zn, 0.90% Pb o NDDT012 10.30m @ 5.09% Zn, 0.19% Pb o NDDT010 3.80m @ 24.58% Zn, 3.13% Pb o NDDT008 9.30m @ 5.18% Zn, 0.13% Pb La Catedral area hosted extensive mining of high grade ore zones above this newly defined lower lens Drilling continuing to end of 2023 calendar year Variscan Mines Limited (ASX:VAR) (“Variscan” or “the Company”) is pleased to report an outstanding set of assay results from the Phase 3 underground diamond drilling program at the San Jose Mine, near Novales, located in Cantabria, northern Spain. La Catedral lower lens in Central Zone of the San Jose Mine defined The current drilling program is focused on testing prospective zones that have been identified from the development of our 3D model and also expanding zones of mineralization. These drill results achieve both objectives by defining a new lower lens beneath the La Catedral in the Central Zone and expanding the mineralization footprint with continuity as the new lens links up with the La Caseta trend. The La Catedral lower lens is immediately accessible from main gallery level of the mine. Figure 1. Cross-section of newly defined La Catedral Lower Lens, Central Zone, San Jose Mine (Refer also ASX announcements 3rd Feb 2020, 3rd March 2020, 16th March 2020, 1st April 2020, and 15th June 2021) Figure 2. 3D model illustrating newly defined La Catedral Lower Lens, Central Zone, San Jose Mine 2 Figure 3. Plan view of drill-hole data illustrating newly defined La Catedral Lower Lens, Central Zone, San Jose Mine Figure 4. Diamond Drill Core from NDDT014 illustrating massive sphalerite hosted in dolostone Note: Hole depth shown is from 8m to 24m 3 Key Findings • • • • Drilling has continued to expand and infill zones of high-grade zinc mineralization within the Central Zone of the San Jose Mine Consecutive sets of positive drilling results highlight the significant potential for the discovery of additional lower lenses within the San Jose Mine; depth remains prospective New La Catedral lower lens further confirms the multi-layered deposit as multiple vertically stacked, laterally extensive, high grade mineralized lenses separated by intervals of dolostone Positive drilling results will be included in the forthcoming Mineral Resource Estimate that may potentially be exploited by a future resumption of underground operations Way Forward As recently stated, Variscan has been very busy on site moving towards the delivery of major project objectives (refer ASX announcement 28 September 2023). These work-streams especially, Mineral Resource Estimation and metallurgical test-work continue apace alongside the underground drilling which is confirmed to continue until the end of the 2023 calendar year. A clear pathway to development for the San Jose Mine and wider Novales-Udias project is set out in Figure 5 below. Figure 5. Anticipated schedule of near-term activities 4 Variscan’s Managing Director & CEO, Stewart Dickson said, "We are pleased to report this latest set of very strong assay results which continue to demonstrate the presence of thick, high grade zinc-rich lenses. Further, our drilling continues to prove the potential for more high-grade discoveries beyond the historical mine workings. Our fresh yet methodical approach is yielding excellent results. Using our own portable rig and staff, we are able to conduct this program efficiently, cost effectively and with a high degree of flexibility. This drilling campaign will continue until the year end, as a minimum. In-fill and step-out drilling will seek to test new prospective zones and expand identified zones of mineralization. Our drilling continues to support our overarching objective to assess the re-start potential of the San Jose Mine”. ENDS This ASX announcement has been approved by the Board and authorised for issue by Mr Stewart Dickson, Managing Director and CEO, Variscan Mines Limited For further information, please contact: Variscan Mines Limited (ASX:VAR) Stewart Dickson Managing Director & CEO E: stewart.dickson@variscan.com.au T: +44 (0) 7799 694195 Media & Investor Enquiries The Capital Network Julia Maguire E: julia@thecapitalnetwork.com.au P: +61 2 8999 3699 About Variscan Mines Limited (ASX:VAR) Variscan Mines Limited (ASX:VAR) is a growth oriented, natural resources company focused on the acquisition, exploration and development of high-quality strategic mineral projects. The Company has compiled a portfolio of highimpact base-metal interests in Spain, Chile and Australia. Its primary focus is the development of its advanced zinc projects in Spain. The Company’s name is derived from the Variscan orogeny, which was a geologic mountain building event caused by Late Paleozoic continental collision between Euramerica (Laurussia) and Gondwana to form the supercontinent of Pangea. To learn more, please visit: www.variscan.com.au For more information Follow us on LinkedIn Follow us on Twitter Visit our investor website: www.variscan.com.au 5 Competent Person Statement The information in this document that relates to technical information about the Novales-Udias project is based on, and fairly represents information and supporting documentation compiled and reviewed by Dr. Mike Mlynarczyk, Principal of the Redstone Exploration Services, a geological consultancy acting as an external consultant for Variscan Mines. Dr. Mlynarczyk is a Professional Geologist (PGeo) of the Institute of Geologists of Ireland, and European Geologist (EurGeol) of the European Federation of Geologists, as well as Fellow of the Society of Economic Geologists (SEG). With over 10 years of full-time exploration experience in MVT-style zinc-lead systems in several of the world’s leading MVT provinces, Dr. Mlynarczyk has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (‘JORC Code’). Dr. Mlynarczyk consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears. Where Company refers to exploration results and historical data previously advised to the ASX it confirms that it is not aware of any new information or data that materially affects the information included in previous announcements and all material assumptions and technical parameters disclosed in those announcements continue to apply and have not materially changed. Forward Looking Statements Forward-looking statements are only predictions and are not guaranteed. They are subject to known and unknown risks, uncertainties and assumptions, some of which are outside the control of the Company. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward-looking statements or other forecast. The occurrence of events in the future are subject to risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to differ from those referred to in this announcement. Given these uncertainties, recipients are cautioned not to place reliance on forward looking statements. Any forward-looking statements in this announcement speak only at the date of issue of this announcement. Subject to any continuing obligations under applicable law and the ASX Listing Rules, the Company, its directors, officers, employees and agents do not give any assurance or guarantee that the occurrence of the events referred to in this announcement will occur as contemplated. 6 JORC Table 1, Sections 1 and 2 Criteria JORC Code explanation Commentary Sampling techniques • Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. • Include reference to measures taken to ensure sample representativity and the appropriate calibration of any measurement tools or systems used. • Aspects of the determination of mineralisation that are Material to the Public Report. • In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information. • Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, facesampling bit or other type, whether core is oriented and if so, by what method, etc). • • • Unlike the previous drilling underground campaigns of Variscan Mines, the core recovery for this batch of underground drillholes has been quite variable, with a few holes in the 70-80% range, owing to the presence of large open fractures and vugs, as inferred from repeating some of these holes. Drill core recovery information has been formally recorded for all drillholes at this time, as it forms part of the detailed core logging. The lowest recovery recorded for an entire drillhole from this batch is 63.7% mean recovery; however, this is anomalous compared to the other Drilling techniques Drill sample recovery • • Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and • • • • • Drilling being reported has been sampled with industry best practice methods (for the sake of representativeness - as full core, because of its comparatively small diameter of 38 mm), and the samples were sent to the accredited ALS Seville laboratory for analysis. The samples are considered representative and include waste intervals on the periphery of mineralised intersections. It is assumed that the equipment used was calibrated correctly as per the internal SOP’s at ALS. The new drillholes reported are located in the central part of the San Jose Mine. All holes consist of underground diamond drillholes and were sampled as full core from 15cm to 1.70m sample length (average 1.00m) with at least a single 1m sample either side to cover the periphery of the mineralised intersection. The analytical method used by ALS is Zn-OG62h for Zinc and Pb-OG62h for Lead, as well as Zn-AA07 for non-sulphide (‘oxide’) zinc. These are considered appropriate for the deposit type. Details of any historical drilling referenced in this document can be found in prior ASX press releases by Variscan Mines, in particular from the following dates: 3rd Feb 2020, 3rd March 2020, 16th March 2020, 1st April 2020, and 15th June 2021 on the website www.variscanmines.com.au The new drillholes referred to in this press release are underground diamond drillholes (core) completed using a Hilti portable drill, at a core diameter of 38mm. These new holes have not employed oriented core methods. Details of any historical drilling referenced in this document can be found in prior ASX press releases by Variscan Mines, in particular from the following dates: 3rd Feb 2020, 3rd March 2020, 16th March 2020, 1st April 2020, and 15th June 2021 on the website www.variscanmines.com.au 7 Criteria JORC Code explanation Commentary grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. holes with logged recovery and the aforementioned hole was further repeated. • No methods other than drillhole repetition have been used to maximise sample recovery; as its occasionally low values are not caused by core loss, but are related to presence of natural voids. • The relationship between sample recovery and grade has not been assessed thus far. • Details of any historical drilling referenced in this document can be found in prior ASX press releases by Variscan Mines, in particular from the following dates: 3rd Feb 2020, 3rd March 2020, 16th March 2020, 1st April 2020, and 15th June 2021 on the website www.variscanmines.com.au Logging • Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. • Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. • The total length and percentage of the relevant intersections logged. Sub-sampling techniques and sample preparation • If core, whether cut or sawn and whether quarter, half or all core taken. • If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry. • For all sample types, the nature, quality and appropriateness of the sample preparation technique. • Quality control procedures adopted for all sub-sampling stages to maximise representativity of samples. • Measures taken to ensure that the sampling is representative of the insitu material collected, including for instance results for field duplicate/second-half sampling. • Whether sample sizes are appropriate to the grain size of the material being sampled. • Detailed geological and geotechnical logging has been carried out for all reported drillholes. Currently there is sufficient geotechnical and geological logging data to support a Mineral Resource estimate, which is presently being completed. • Total percentage of holes that have been logged for lithology, veins, alteration, and mineralisation is 100% and the total percentage of new drillholes that has detailed recovery and geotechnical logging is 100% at this stage (based on all logs available). All of the drill core from the reported batch was photographed before sampling, which was especially important, as unlike the previous underground drilling campaigns of Variscan Mines, full core was assayed this time. • Details of any historical drilling referenced in this document can be found in prior ASX press releases by Variscan Mines, in particular from the following dates: 3rd Feb 2020, 3rd March 2020, 16th March 2020, 1st April 2020, and 15th June 2021 on the website www.variscanmines.com.au • New drillholes have been sampled using reasonable industry procedures for logging (of mineralisation), sampling, and QAQC for this project. • The samples were selected by geologists for these new drillholes based on logging of mineralised intervals, core was sampled as full core. Samples were preferred at 1m lengths, although they were permitted flexibility from 15cm to 1.70m sample lengths where geological boundaries existed. A minimum of three samples were taken for any mineralised intersection, the first sample encompassing the mineralised zone and the other two samples selected either side to ensure waste intervals were sampled to define the boundaries of mineralisation. Additionally, when a separate geological zone of rubble or broken core began, a new sample was taken and when solid core resumed the next samples were selected. In zones of poor recovery <80% the default sample intervals were the drillers depth markers. The nature and quality of sampling techniques are considered appropriate for this deposit and drilling type. • All half core samples were sent directly to ALS Seville laboratory for preparation and subsequent analysis, according to industry standards with crushing, pulverizing and splitting prior to sample analysis. • Sample sizes taken for the drilling reported (i.e., full core) are considered suitable for the deposit type and style of 8 Criteria JORC Code explanation Commentary mineralisation at this stage of exploration. Quality of assay data and laboratory tests • The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. • For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. • Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established. Verification of sampling and assaying • The verification of significant intersections by either independent or alternative company personnel. • The use of twinned holes. • Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. • Discuss any adjustment to assay data. Location of data points • Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. • Specification of the grid system used. • Quality and adequacy of topographic control. • For the new drilling reported the sampling is considered total as no drillcore remains. The laboratory is accredited (ALS Seville) and the techniques for Zn/Pb (Zn-OG62h, Pb-OG62h, and ZnAA07) are considered suitable for the elements in question. • No handheld or downhole geophysics data were collected during this campaign. • QAQC Procedures adopted for this batch of drilling results included a total of fifteen QAQC samples inserted into the sample stream (total 80 of drillhole samples, not including QAQC). These included two high-grade CRMs (OREAS 134B) inserted into the mineralised zone, three medium grade CRMs (OREAS 133A) and five low grade CRM (OREAS 130) inserted in between waste rock or barren samples, as well as two blanks. Also, internal duplicates were requested to ALS for three mineralised samples and these sample ID’s were indicated to the laboratory. In total, for the 80 new samples reported within this press release the QAQC samples comprised 16% of the sample population submitted for analysis. This frequency and variety of QAQC samples inserted into the sample stream is considered adequate; with industry best practice typically requiring 15-20% of the sample population to be QAQC samples in the sample stream. The QAQC sample results were interpreted and showed good repeatability. • Analytical processes are being supervised by senior ALS staff experienced in mineral assaying. • The new diamond drillholes are mostly located below the historic stopes of the central part of the San Jose underground mine. Some of the holes are located near existing historical drillholes, however, they cannot be considered twinned holes at this stage. • Primary data for this underground drilling campaign is currently stored in excel and all assay certifications and final assay results provided by ALS Seville have been reviewed. • Assay data are reported in two ways within this press release, the first are raw assay values unchanged or altered, and the second are calculated significant intercepts or aggregated consecutive sample intervals using sample length weighted mean grades for Zn and Pb, assuming an ore grade of zero for the intervals with missing drill core (natural voids). • The underground drillhole collars from the Variscan Mines drilling campaigns were initially surveyed using the Nortop Ingenieros S.L.U Total Station determined points and using an 'all-in-one’ laser disto device (incorporating digital compass, clinometer and distance meter) placed on a 4kg tripod to avoid movements and a topographic rod (with bubble level) to mark the position of the Nortop points. Checks were made with a Brunton compass to verify that there were no measurements errors. Several checks were made with Nortop points bases obtaining the same results. These are considered relatively accurate. • Subsequently, both the Variscan Mines and all of the historical underground drill collars were systematically resurveyed by physical in-situ inspection and using the data cloud of the 3D laser survey of the San Jose mine drifts and stopes realized by Variscan Mines in the years 2020-2022. All of the collar locations were 9 Criteria JORC Code explanation Commentary • • • Data spacing and distribution Orientation of data in relation to geological structure then cross-checked with detailed historical mine plans. In addition, for every drill collar surveyed, the drill trace azimuth and inclination were measured in situ using a Brunton compass and checked across the historical drill records. All the maps and 3D models referenced in this report have been made with ETRS89. Surface topography was provided by CNIG (IGN) as topographic contours at 25k scale, the contours were used to generate a digital terrain model in 3D after transformation to the local mine grid to conform to the majority of drillhole data in Leapfrog Geo and Datamine StudioRM. It is considered satisfactory for these purposes. The San Jose mine 3D underground laser survey was conducted by 3DMSI using a robotic total station to take the in-situ preexisting historical survey pin locations to use as reference points. A “Z+F Imager 5050C laser scanner”, as well as a “Leica Geosystems TS16 01 total station” for controlling positional accuracy and a “Leica geosystems BLK-2-GO” for detailed mapping of the tunnels and drives were used to capture data inside stopes and drives at San Jose, and these data were registered as a point cloud. The BLK-2-GO was controlled with targets positioned with the TS16 on the corners of the drives. The reported drillholes have been drilled in a fence or fan pattern from drilling pads underground. These holes have been drilled in various orientations (the majority downward) and their spacing varies to some extent (see table in Appendix 1). At this stage there is sufficient distribution of drillholes to support geological and grade continuity for the main San Jose mine area. However, the smaller peripheral zones require further exploration to improve geological confidence in interpretation. Assay data for the new drillholes are reported in two ways within this press release, the first are raw assay values unchanged or altered and the second are calculated significant intersections or aggregated consecutive sample intervals using sample length weighted mean grades for Zn and Pb. Please note, there are occasional sample intervals where drill core could not be obtained due to the presence of natural cavities, these intervals were manually set to 0% Zn and 0% Pb prior to calculating mean grades for intersections. • Data spacing for reporting of Exploration Results. • Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. • Whether sample compositing has been applied. • • Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. • If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. • Mineralisation at the project occurs as stratabound, sub-horizontal and lenticular, following sub-vertical trends, and with lateral and vertical extensions with a significant control by steeply-dipping feeder fault zones. Mineralisation in this setting presents as ‘bags’ (pods) with sub-horizontal lenticular form. Due to the irregular and/or variable nature of the mineralisation, an estimate of potential bias through orientation of sampling has not been made. • While the location of mineralisation centres on the Novales trend follows a broad NNE strike, the orientation of distinct orebodies on this trend is understood to be variable both in terms of strike and dip. Underground drilling is often radial in nature, and no comment can be made on the orientation of drilling in respect of mineralisation orientation. • New drillholes have been oriented at a variety of orientations • 10 Criteria JORC Code explanation Sample security • The measures taken to ensure sample security. Audits or reviews • The results of any audits or reviews of sampling techniques and data. Commentary both drilling above and below (positive and negative dips) from the main gallery level at present, similar to those drilled historically to intersect mineralised lenses and corridors above and below the main gallery level. These orientations are considered appropriate for the geometry of this mostly lenticular MVT mineralisation at San Jose. • Samples are securely stored at the locked on-site core shed and were handed directly to a courier for transport to ALS Seville. Samples were logged and collected on site under supervision of the responsible Variscan geologist. • No detailed 3rd party audits have taken place regarding the sampling techniques for new drillholes. Section 2 Reporting of Exploration Results Criteria JORC Code explanation Commentary Mineral tenement and land tenure status • • The exploitation permit for the San Jose historic mine area near Novales is owned by Variscan Mines. • The author is not aware, at the time of writing this, of any issues with tenure or permission to operate in this region. Exploration done by other parties Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. • The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. • Acknowledgment and appraisal of exploration by other parties. Geology • Deposit type, geological setting and style of mineralisation. Drill hole Information • A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole • The historical data referenced in this report refer to exploration undertaken by historic mining companies operating the Project from the 1950’s to the mid 1980’s. The previous workers include Hispanibal and Asturiana de Zinc (previously a subsidiary of Xstrata / Glencore). • The historic data referenced in this report and undertaken by the historic workers is held at the School of Mines and Energy Engineering at Torrelavega, a faculty of the University of Cantabria. • The mineralisation at the project is considered a Mississippi Valley Type Lead-Zinc type deposit with associated structuraland stratigraphy-controlled carbonate dissolution and replacement Lead-Zinc type mineralisation. • Mineralisation at the project occurs as stratiform, sub-horizontal and lenticular, following sub-vertical trends, and with lateral and vertical extensions, with a significant control by steeplydipping feeder faults. Mineralisation in this setting presents as ‘bags’ (pods) with sub-horizontal lenticular form. • In total, 17 underground drillholes have been completed to date in this latest underground drilling campaign of Variscan Mines started in Q2 2021. This press release presents new assay data for 7 drillholes from this campaign, see table in Appendix 2 for raw assay data from the laboratory. The remaining holes lacked visible mineralisation and were not assayed. 11 Criteria JORC Code explanation Commentary collar elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar dip and azimuth of the hole down hole length and interception depth hole length. If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated Where aggregate intercepts incorporate short lengths of highgrade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearly stated. • All 17 collar co-ordinates, hole depths, and orientations for the holes reported in this announcement have been provided in the table in Appendix 1. Relationship between mineralisation widths and intercept lengths • These relationships are particularly important in the reporting of Exploration Results. • If the geometry of the mineralisation with respect to the drill hole angle is known, its nature shoul