Announcement PDF ASX Announcement | 08 April 2024 Variscan Mines Limited (ASX:VAR) AWARD OF NEW LICENCES SUBSTANTIALLY INCREASES SIZE OF NOVALES-UDIAS PROJECT Highlights • • • • • • • • 70% increase to the land package of the newly enlarged Novales-Udias Project 5 new licences awarded, with an area of 36.66 km2, are immediately adjacent to the existing San Jose and Buenahora tenements New areas extend the Novales Trend to NE to approximately 12 km in strike length De-risked exploration opportunity over very prospective areas to increase scale of the Novales-Udias Project Historical drill intercepts over the licence areas include: o DDH S-21: 6.0m @ 9.62% Zn o DDH S-163: 7.3m @ 6.50% Zn o DDH S-162: 3.2m @ 9.57% Zn o DDH S-162: 3.3m @ 6.33% Zn o DDH S-162: 2.0m @ 6.73% Zn o DDH S-100: 1.0m @ 6.28% Zn Estela licence hosts the main shaft of the Udias Mine (Pozo Madroño) and some major underground developments & infills a previous gap in the San Jose licence Collation of additional archive information underway with further historical drilling results expected to be reported Future workplan includes drilling with applications already submitted Variscan Mines Limited (ASX:VAR) (“Variscan” or “the Company”) is pleased to report the conditional award of 5 new exploration licences comprising 36.66 km2 in aggregate, from the Consejería de Innovación, Industria, Turismo y Comercio - del Gobierno de Cantabria (the Government of Cantabria) in northern Spain. Variscan’s Managing Director & CEO, Stewart Dickson said, ”The award of 5 new licence areas is an excellent step forward in the growth of the Novales-Udias project offering the realistic potential to increase scale and tonnage in this proven, high grade zinc district. The licence areas infill and expand our project tenement area by some 70%. The new licences are contiguous and highly prospective. After working to secure these licences over a number of years it is personally satisfying to achieve this objective. Further, it demonstrates the strength of our relationships with the regional government as well as reflecting the high regard of our local team with authorities and communities. We have already submitted drilling permit applications and are looking forward to reporting on the progress of exploring these new licence areas” New Licences Awarded The 5 new licences, together termed as the ‘Caborredondo’ licences, (see Figure 1 and Table 1) are for a three year period and can be extended for an additional three years by the Ministry of Industry subject to compliance by filing a report of results of the exploration program. Formal ratification of the licences will be made following the review of certain supplementary information to be supplied by Variscan, including annual work plans, to the satisfaction of the Government of Cantabria. The award of the licences does not carry a minimum financial spending commitment. Figure 1. Map of enlarged licence areas including the Caborredondo licences Table 1. Licence areas awarded comprising the Caborredondo Licences Licence Area Size (km2) Esperanza 34.44 Estela 0.56 Elena 0.28 Candela 1.11 Valeria 0.28 Total 36.66 2 Geology and Mineralization The principal geological feature is a wide synclinal structure that characterizes the western end of the BasqueCantabrian Basin, named the Santillana syncline, striking NE-SW. The Caborredondo Licences cover a significant part of the Santillana syncline, where multiple zinc ore deposits occur. The former producing world-class Reocín Mine is located on the southeast flank of the syncline, whereas the newly gained ground occupies a symmetrical position on the northwest flank of the syncline, where dolomitic alteration and zinc mineralization are well developed in the same Gargasian (Upper Aptian) carbonate beds as found at the nearby Reocín Mine. The Reocín deposit is one of the largest known stratabound, carbonate-hosted, zinc-lead deposits in Europe. The total metal endowment of the deposit, including past production and remaining reserves, is c. 87 Mt of ore grading 11 percent Zn and 1 percent Pb. (Velasco, 2003). 1 Figure 2. Map of enlarged licence areas and underlying geology 1 Velasco, F., Herrero, J.M., Yusta, I., Alonso, J.A., Seebold, I. and Leach, D., (2003) ‘Geology and Geochemistry of the Reocin Zinc-Lead Deposit, Basque-Cantabrian Basin, Northern Spain’ Econ. Geol. v.98, pp. 1371-1396. 3 Figure 3. Geological cross-section of the Santillana syncline Mineralization in the district consists mainly of sulphides of sphalerite (ZnS), and galena (PbS) with minor amounts of pyrite and / or marcasite. The sphalerite (generally termed as ‘zinc blende’) is clearly dominant in proportion to the rest of sulphides. The blende is the main ore for zinc and occurs in various forms ranging from massive, to crystals of small size, to botryoidal texture and filling fractures, although the most frequent texture is banded. In terms of exploration, intensely dolomitized carbonate rocks affected by faulting/fracturing are the preferred locations for hosting zinc mineralization and the formation of zinc mineralization. Replacement of host dolomite, open-space filling of fractures, and cementation of breccias derived from dissolution collapse are the principal types of ore occurrence. New Licence areas extend the Novales-Udias Trend towards NE Figure 4. Map of enlarged licence areas and extension of Novales Trend to the North-East 4 The large licence area (34.4km2) to the east (auspiciously named ‘Esperanza’, i.e., ‘hope’ in Spanish) has extended the Novales-Udias Trend of zinc mineralization to approximately 12km in length. The Novales-Udias Trend is characterised by the former producing, sizeable San Jose and Udias Mines, as well as numerous historical small-scale mines and workings. The Esperanza licence hosts over a dozen historical small-scale mines and workings and has multiple positive exploration data, whereas the small licence in the centre of the already held San Jose mining licence (named ‘Estela’) hosts the main shaft of the Udias mine (Pozo Madroño) and some major underground developments of the historical Udias Mine. De-risked exploration opportunity to scale-up the Novales-Udias Project The new licence areas have been explored to a limited extent by Asturiana de Zinc in the 1980's. The data uncovered to date indicates there is an opportunity to grow the scale of the tonnage of the Novales-Udias Project. Historical drilling The Variscan exploration team have identified the location of 53 drillholes over the Esperanza licence area (see Figure 5). Early work has confirmed historical drill intercepts over the licence areas that include: • • • • • • DDH S-21: 6.0m @ 9.62% Zn DDH S-163: 7.3m @ 6.50% Zn DDH S-162: 3.2m @ 9.57% Zn DDH S-162: 3.3m @ 6.33% Zn DDH S-162: 2.0m @ 6.73% Zn DDH S-100: 1.0m @ 6.28% Zn A large amount of regional historical archives, including drillhole data, is currently under review and will be reported as soon as practicable. It is very clear that the Esperanza licence area hosts the eastern part of the high-zinc-grade Novales Trend, which is open to the north-east, and also that the favourable dolomitic strata on the western limb of the Santillana syncline and dipping east are prime exploration ground for large-scale ‘Reocin-type’ zinc systems, with all the tell-tale exploration vectoring signs being very encouraging for drilling this area. 5 Figure 5. Map of enlarged licence areas and historical drilling over the Esperanza Licence Geochemistry Limited geochemical sampling was conducted by Asturiana de Zinc in the 1980s and shows high grade zinc results extending northeast from the area of the San Jose Mine and highlighting the extensive length and width of the Novales Trend as it outcrops on surface (see Figure 6). The more significant zinc anomalies typically range 4,000 – 9,000 ppm Zn (maximum 33,600 ppm Zn) and 380 – 2280 ppm Pb, making for compelling drill targets. 6 Figure 6. Geochemistry shows continuity from San Jose eastwards into the new Esperanza Licence. Former mine workings The new licence areas also host numerous historical near-surface and underground workings for zinc, such as the historical small-scale mines of Margarita, Emilia, Soberbia, Pedroso, Cualquiercosa, and a number of unnamed ones. An area of notable significance is the Estela licence, which hosts the main shaft of the Udias Mine (Pozo Madroño) and some major underground developments in the central part of the historical Udias Mine. The award of this licence infills a previous gap in the San Jose mining licence. 7 Figure 7. Pozo Madroño shaft, situated in the Estela Licence, as viewed today. First class regional infrastructure The enlarged Novales-Udias Project is located in the Cantabria Region, Northern Spain. The Cantabria region is characterized by first world infrastructure including an industrial port and international airport in Santander (less than ~40km from project). There is excellent rail and road network across the region (see Figure 8). Glencore has its "San Juan de la Nieva" zinc smelter in the adjacent region, Asturias, about 170 km by highway to the west. 8 Figure 8. Map of project areas and regional infrastructure Next Steps and Way Forward Variscan continues to deliver on its stated drilling plan and is pleased to confirm that its upscaled underground drilling program will continue well in 2024. Together with a planned surface drilling campaign later in 2024, the objective of delivering a MRE upgrade later this year remains extant. 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 9 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 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. The information in this document that relates to previous exploration results was prepared pre-2012 JORC code. It is the opinion of Variscan that the exploration data is reliable. Although some of the data is incomplete, nothing has come to the attention of Variscan that causes it to question the accuracy or reliability of the historic exploration. 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. 10 Project Summary The Novales-Udias Project is located in the Basque-Cantabrian Basin, some 30km southwest from the regional capital, Santander. The project is centred around the former producing San Jose underground mine with a large surrounding area of exploration opportunities which include a number of satellite underground and surface workings and areas of zinc anomalism identified from recent and historic geochemical surveys. Variscan has delineated a significant 9km mineralised trend and a sub-parallel 3km trend from contemporary and historical data across both the Buenahora exploration and Novales mining permits. The San Jose Mine is nearby (~9km) to the world class Reocin Mine which is the largest known strata-bound carbonate-hosted Zn-Pb deposit in Spain 2 and one of the world’s richest MVT deposits 3. Further it is within trucking distance (~80km) from the San Juan de Nieva zinc smelter operated by Asturiana de Zinc (100% owned by Glencore). Significantly, the Novales-Udias Project includes a number of granted mining tenements 4. Novales-Udias Project Highlights • Near term zinc production opportunity (subject to positive exploratory work) • Large tenement holding of 68.3 km2 (including a number of granted mining tenements) • Regional exploration potential for another discovery analogous to Reocin (total past production and remaining resource 62Mt @ 8.7% Zn and 1.0% Pb 56) • Novales Mine is within trucking distance (~ 80km) from the zinc smelter in Asturias • Classic MVT carbonate hosted Zn-Pb deposits • Historic production of high-grade zinc; average grade reported as ~7% Zn7 • Simple mineralogy of sphalerite – galena – calamine • Mineralisation is strata-bound, epigenetic, lenticular and sub-horizontal • Reported historic production of super high grade ‘bolsas’ (mineralised pods and lenses) commonly 1020% Zn and in some instances +30% Zn 8 • Assay results of recent targeted grab samples taken from within the underground Novales Mine recorded 31.83% Zn and 62.3% Pb 9 • Access and infrastructure all in place • Local community and government support due to historic mining activity • Maiden MRE of 1.08 Mt at 9% Zn established in Q4/2023 10 2 Velasco, F., Herrero, J.M., Yusta, I., Alonso, J.A., Seebold, I. and Leach, D., (2003) ‘Geology and Geochemistry of the Reocin Zinc-Lead Deposit, Basque-Cantabrian Basin, Northern Spain’ Econ. Geol. v.98, pp. 1371-1396. 3 Leach, D.L., Sangster, D.F., Kelley, K.D., Large, R.R., Garven, G., Allen, C.R., Gutzner, J., Walters, S., (2005) ‘Sedimenthosted lead-zinc deposits: a global perspective’. Econ. Geol. 100th Anniversary Special Paper 561 607 4 Refer to ASX announcement of 29 July 2019 5 Velasco, F., Herrero, J.M., Yusta, I., Alonso, J.A., Seebold, I. and Leach, D., 2003 - Geology and Geochemistry of the Reocin Zinc-Lead Deposit, Basque-Cantabrian Basin, Northern Spain: in Econ. Geol. v.98, pp. 1371-1396. 6 Cautionary Statement: references in this announcement to the publicly quoted resource tonnes and grade of the Project are historical and foreign in nature and not reported in accordance with the JORC Code 2012, or the categories of mineralisation as defined in the JORC Code 2012. A competent person has not completed sufficient work to classify the resource estimate as mineral resources or ore reserves in accordance with the JORC Code 2012. It is uncertain that following evaluation and/or further exploration work that the foreign/historic resource estimates of mineralisation will be able to be reported as mineral resources or ore reserves in accordance with the JORC Code 2012. 7 These figures have been taken from historical production data from the School of Mines in Torrelavega historical archives. 8 Reports of the super high-grade mineralisation are supported with historical production data from the School of Mines in Torrelavega historical archives. (Refer ASX release 29 July 2019) 9 Refer to ASX Announcement of 19 December 2020 10 Refer to ASX Announcement of 27 November 2023 11 APPENDIX 1 JORC Table 1, Sections 1 and 2 Criteria JORC Code explanation Commentary Sampling techniques • • • • • Nature and quality of sampling (e.g., 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 News release. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g., ‘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 (e.g., submarine nodules) may warrant disclosure of detailed information. • • • • Drilling techniques • Drill type (e.g., core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g., 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). • • • The data referred to in this report relates to exploration undertaken by mining companies operating in the Project area from the 1950’s to the late 1980’s, namely Asturiana de Zinc Sociedad Anonima (AZSA), formerly known as Real Compania Asturiana de Minas (RCAM). This historical data consists of surface core drilling, of which the paper-format core logs and location maps are held at the School of Mines and Energy Engineering at Torrelavega, a faculty of the University of Cantabria. The details of all available historical drill hole collars and orientations are listed in Appendix 1. Due to the incomplete nature of the historical drill data and records, including procedures, a comment on the sample representativity or calibration of measurement tools or systems used by historical workers cannot be made. Further comments regarding specific components of the historical drilling are provided in subsequent sections of this table. The historical data cannot be considered ‘industry standard’ by modern standards. It has been assumed that the assays are representative of technology available at the time, but no reliance has been put on it. It is understood that most if not all assaying carried out by Asturiana de Zinc Sociedad Anonima / Real Compania Asturiana de Minas (the main historical operators of the project) was carried out at their own laboratory (Laboratorio Central) in Torres, and that the practice of assaying half-core was the general rule. The data referred to in this report also include records of historical geochemical soil sampling conducted in the Project area by Asturiana de Zinc Sociedad Anonima (AZSA) between 198385, with zinc and lead assay determinations realized at their own laboratory (Laboratorio Central) in Torres. Again, the paper records are held at the School of Mines and Energy Engineering at Torrelavega, a faculty of the University of Cantabria, and the data cannot be considered ‘industry standard’ by modern standards, with the assays being representative of technology available at the time, however, no reliance has been put on it. The geochemical soil sampling lines were typically spaced 100250m apart, with the distance between sampling stations being 25m. The depth of sampling varied between 25 and 200cm, and no information on the actual sample size was recorded. The historical surface drilling referred to in this report is understood to be all core drilling. No details of the drilling techniques employed have been identified in the historic data. This includes reference to core diameter(s), core orientation methods, nor down hole survey data. This release refers to 51 historical surface drillholes, only 48 of which have sufficient data to be projected in 3D. These holes consist of 24 vertical, 24 inclined and 3 holes with no azimuth and dip indicated. No records of the type of drill rig used have been identified. 12 Criteria JORC Code explanation Commentary Drill sample recovery • • No records of core recovery have been identified from the historic data so far, however, the review of the archival datafiles is still ongoing and has not been completed yet. • Given the absence of core recovery data, it is not possible to assess the potential of a relationship between sample recovery and grade, and reported grades may be subject to either over or underreporting. • • Logging • • • Sub-sampling techniques and sample preparation • • • • • • Quality of assay data and laboratory tests • • 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 grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. 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. 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. 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 • Hardcopy geological logs for the 51 historical surface drillholes are presently in the process of being reviewed and digitized. No geotechnical logs have been identified yet. The drill hole information reported here is not of a sufficient level of detail to support a Mineral Resource Estimation, mining, or metallurgical study. • In the absence of detailed data, no comment on whether the logging, where observed, is qualitative or quantitative has be made. No core photography has been identified. • Historical approach to drillcore sampling appears selective, guided by geological observation and no “apparent” waste was sampled. • No details of the sub-sampling or sample preparation techniques have been identified from the historic records, and no supporting sampling procedures have been identified. In the absence of this data and other data related to the sub-sampling techniques and sample preparation, no comment on the appropriateness of the sample preparation techniques can been made. • No evidence of Quality Control procedures nor results have been identified for the drillcore assaying or for the geochemical soil sampling. This includes evidence of field duplicates or other current industry standard quality control procedures, such as Certified Reference Materials and blanks. • In the absence of sample size data for both drillcore assaying and geochemical soil sampling, no comment on whether the sample size is appropriate to the grain size of the sampled material has been made. • No descriptions of the assaying and laboratory procedures used have been found. It is unknown whether the techniques used were partial or total. • No descriptions of quality control procedures adopted by the laboratory, nor any results of any related Quality Control data, has been identified. No comment can be made on whether acceptable accuracy or precision of results has been established. 13 Criteria JORC Code explanation • Verification of sampling and assaying • • • • 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. 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. Data spacing and distribution • Data spacing for reporting of Exploration Results. • Whether the data spacing and distribution is sufficient to establish Commentary • Due to the historic nature of the results reported, it has not been possible to verify significant intersections. It is not known whether verification of intersections was undertaken by previous operators at the time of drilling. No remaining core from these programmes have been identified to date, however investigations are ongoing. • The historic data does not include any twinned holes. It is understood that Variscan may consider twinning historic drill holes as part of the company’s upcoming exploration plans. • No documentation or records of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols have been identified. • Historic records consist largely of paper-format drill hole and soil geochemistry summaries. Variscan is in the process of transferring this data to an industry standard drill hole / geochemistry database during the ongoing exploration of the project. • Given the absence of detailed historical information relating to the assay data, no adjustment to the assay data has been made. Variscan have no reason to disbelieve the data as presented in the historical logs, however, they understand the limitations of the data for use in reliable and classified mineral resource estimations going forward until assay verification has been achieved to a satisfactory standard. • The method of recording collar coordinates by the historic operating companies has not been identified. It is noted that much of the drilling was undertaken prior to the ubiquitous use of modern GPS by industry. The accuracy of reported drill hole collars has not been determined. • Collar coordinates relating to the historic drill holes reported were identified in a local grid and transformed to the European Terrestrial Reference System 1989 (ETRS89), an earth-centre, earth-fixed geodetic Cartesian reference frame for GIS work. Thus, 2D maps (Figures) used in this report have been made with ETRS89. • The quality and adequacy of the topographic control on the location of collar points has not been assessed. Collation and cross-reference of historic map, level plan and log/tabular hardcopy datasets show a reasonable degree of relative geospatial correlation. • The surface diamond drilling referred to in this news release was drilled downward from drill pads duly prepared on the surface, either vertically or as inclined drill holes. The surface drill holes are not located in a grid pattern, and it is believed that many 14 Criteria Orientation of data in relation to geological structure Sample security Audits or reviews JORC Code explanation 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 a