Announcement PDF ASX Announcement | 04 March 2025 Variscan Mines Limited (ASX:VAR) EXCEPTIONAL HIGH-GRADE ZINC DRILLING RESULTS INDICATE PROBABLE FEEDER ZONE AT SAN JOSE MINE Highlights • Drilling at La Caseta (Central zone) of San Jose Mine has returned the highest assay result (width x grade) from a single drill hole drilled by Variscan at the Novales-Udias project to date: o NDDT059: 15.3m @ 17.42% Zn, 4.40% Pb • Other excellent assays from holes drilled at La Caseta: o NDDT058: 14.30m @ 8.09% Zn, 1.28% Pb o NDDT060: 15.25m @ 6.10% Zn, 0.46% Pb • Follow-up underground drilling campaign at San Jose Mine conducted late Q4/2024 has: o Infilled high grade mineralisation adjacent to zones of existing Measured & Indicated Resources o Identified one of the probable, principal feeder systems for the San Jose Mine o Defined a priority exploration drilling target for follow-up • Recent drilling results reported from Udias and San Jose are highly significant; producing 5 of the best-ever 20 drill holes Variscan has drilled, confirming the quality of the Novales-Udias project and effectiveness of the drill campaigns Variscan Mines Limited (ASX:VAR) (“Variscan” or “the Company”) is pleased to report the assay results from underground drilling at the San Jose Mine which includes the best-ever assay result (width x grade) to-date from a single drill hole. Highest width x grade zinc intercept to date at the San Jose Mine Prior to the commencement of the current drilling campaign at the Udias Mine, a focused programme was designed to drill test potential feeder zones in the Central Zone of the San Jose Mine. Exceptional results have been returned from all three drill holes in the La Caseta area (Figure 1). In particular NDDT059 returned 15.3m @ 17.42% Zn, 4.40% Pb; on a grade-thickness basis, this is the best assay result yet to be returned from a single drill hole drilled by Variscan at the Novales-Udias Project. Figure 1. Section view of northern end of the La Caseta area in the Central zone of the San Jose Mine indicating locations of underground diamond drill holes and mine development. Figure 2. Diamond Drill Core from NDDT059 (15.3m @ 17.42% Zn, 4.40%) illustrating massive sphalerite hosted in dolostone. Hole depth shown is from 0.00m to 16.95m 2 Probable feeder zone identified at La Caseta Geological mapping and exploration work has consistently indicated strong structural controls on mineralisation and the possible existence of one or more sub-vertical feeder zones channelling metalbearing hydrothermal fluids upward in the San Jose Mine. In particular a north-south oriented linear zone of abundant high-grade sulphide mineralisation in the northernmost part of the La Caseta area of the San Jose Mine was identified (Figure 3). Drilling was conducted in this area to test the feeder zone concept and to infill an area that is adjacent to zones with existing Measured & Indicated Mineral Resources. Drill results support the potential for this zone to represent one of the principal feeders for the San Jose Mine; a steeply dipping fault zone that has channelled ascending hot metalliferous fluids. This concept is substantiated by the mineralogy observed in the core and which shows abundant iron sulphides, marcasite and galena as well as the presence of unusual trace elements (e.g. 150 ppm nickel which elsewhere in the deposit is <1 ppm), indicative of higher temperature ore fluids and metal deposition. Overall, the mine is considered to feature a combination of sub-horizontal strata-bound mineralisation and sub-vertical mineralised feeder zones. Figure 3. Feeder zone with conspicuous, abundant iron sulphides (partly oxidized on surface) that accompany high-grade zinc and lead sulphide mineralisation 3 Priority exploration drilling target identified for follow-up The area immediately adjacent to the north-west of La Caseta and the feeder zone is virtually undrilled and therefore represents a prime target for follow-up exploration drilling at San Jose (Figures 4 – 6). Given its proximity to known high-grade mineralisation, this area is highly prospective. This target, which will require additional drilling capacity, has been added to our future drilling priorities.1 Figure 4. 3D view of the feeder zone at La Caseta (San Jose Mine) and adjacent prospective follow-up drilling target 1 Refer ASX announcement 24 February 2025 4 Figure 5. Plan view of the San Jose Mine and adjacent prospective follow-up drilling target Figure 6. Plan view of structural trends at the San Jose Mine 2 2 Refer ASX Announcement 18 February 2024 5 Recent drilling results are highly significant The drilling reported herein from the San Jose Mine and the recently reported maiden drilling at the Udias Mine 3 have delivered outstanding results. These drill holes now account for 20% of our best-ever 20 drill holes at the Novales-Udias project that the Company has drilled (see highlighted red rows in Table 1 below). All of the results recently reported are located outside of the existing MRE model and are expected to add to an updated MRE, anticipated for later in 2025. Table 1. Top 20 best-ever intercepts drilled by Variscan Mines at the Novales-Udias Project 4 Balance of drilling conducted in the 210 areas of SW zone The balance of exploration drilling conducted at the San Jose in late Q4/2024 was focused on the 210 area in the Southwest zone of the mine (Figure 6). This drilling produced a notable result in drill hole NDDT049 of 2.2m @ 7.4% Zn (Figure 7). Whilst it is apparent that there is high-grade zinc sulphide mineralisation present in this area, the Company’s portable rig is range constrained and to hit deeper horizons of stacked lenses will require additional drilling capability. 3 Refer ASX Announcement 24 February 2025 Refer ASX Announcements 15 June 2021, 25 May 2021, 05 October 2023, 02 March 2023, 24 February 2025, 20 December 2021, 25 August 2022, 15 March 2022, 30 January 2023 4 6 Figure 7. Section view of drilling and Mineral Resources in 210 area of San Jose Mine Ongoing Drilling Program at Udias Mine With some of the best assay results returned to date coming from the maiden drilling at the Udias Mine, our drilling is set to continue for the remainder of H1 2025 to test this highly prospective and underexplored zinc mineralised system. Concurrently we are progressing with the workstreams associated with the Mine Re-Start Study; advancing our Explorer-Producer strategy. Next Steps & Way Forward The Novales-Udias Project continues to progress, with the following demonstrable milestones expected: • • • • • Geotechnical test work results for Mine Re-Start Study Metallurgical test work results for Mine Re-Start Study Geophysical survey results at Guajaraz project Further assay results from underground drilling at the Udias Mine Mine Re-Start Study 7 Variscan’s Managing Director & CEO, Stewart Dickson, said: “In recent times we have drilled some excellent holes at the San Jose Mine. On a grade-thickness basis, drillhole NDDT059 (15.3m @ 17.42% Zn, 4.40%Pb) is the best yet! This is very exciting. Firstly it infills an area adjacent to defined Measured & Indicated Mineral Resources in the centre of the San Jose Mine which will be important for future MRE updates. These great drilling results also provide more strong comfort about the outlook for the re-start of mining at San Jose. The La Caseta area of the Central Zone is expected to be a key part of the early stage mining areas. Secondly it supports the identification of a large target area for future exploration drilling and potential resource growth. We have drilled some outstanding holes recently which underline the quality of this high-grade, development stage zinc deposit. We look forward to reporting further drilling results as they become available. In parallel with our ongoing drill program we are also advancing the various workstreams in connection with the Mine Re-Start Study and look forward to reporting on some of those outcomes shortly. Busy times with strong news-flow ahead”. 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 Jane Morgan Management Chloe Hayes / Jane Morgan E: chloe@janemorganmanagement.com.au / jm@janemorganmanagement.com.au P: + 61 (0) 458619317/ +61 (0) 405 555 618 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 high-impact 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 8 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 zinclead 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. 9 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 5 and one of the world’s richest MVT deposits 6. 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 7. Novales-Udias Project Highlights • Near term zinc production opportunity (subject to positive exploration and development work) • Updated JORC compliant Mineral Resource Estimate of 3.4Mt @ 7.6% Zn, 0.9 %Pb released in December 2024 • Large tenement holding of +100 km2 (including a number of granted mining tenements) • Regional exploration potential for further discoveries analogous to Reocin (total past production and remaining resource 62Mt @ 8.7% Zn and 1.0% Pb 89) • Novales-Udias Project 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% Zn 10 • 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 11 • Access and infrastructure all in place • Local community and government support due to historic mining activity 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. 6 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 7 Refer to ASX announcement of 29 July 2019 8 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. 9 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. 10 These figures have been taken from historical production data from the School of Mines in Torrelavega historical archives. 11 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) 5 10 Figure 8. Map of Novales-Udias Project Licence Areas with Udias Mine highlighted Figure 9. Map of Novales-Udias Project Licence Areas and local infrastructure 11 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, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). • Drilling techniques • • • • 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 southwestern and central parts of the San Jose Mine. All holes consist of underground diamond drillholes and were sampled as full core from 10cm to 2.00m 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. 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. 12 Criteria JORC Code explanation Drill sample recovery • • • Logging Subsampling techniques and sample preparation 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 Commentary • Drill core recovery for this batch of underground drillholes was generally good, in the 63.7 – 98.9% range (average. 88.6%). Drill core recovery information has been formally recorded for all drillholes at this time, as it forms part of the detailed core logging. • No special methods have been used to maximise sample recovery; as the portable drill used is not compatible with such methods, e.g., triple tube drilling. Low drill core recovery values are either related to core loss, due to washing out of the more friable mineralized material or are related to presence of natural voids, and whenever possible the reason for the core loss was identified and recorded in the detailed core logs. • The impact of sample recovery on ore grade has been taken into account by identifying whether the infrequent instances of low drill core recovery were due to natural cavities or to the loss of drill core, and whether the latter was mineralized or not. In the case of intersecting natural cavities (voids) or the loss of barren drill core, such intervals were not included in the sampling intervals and were assigned a grade of 0%. In the rare case of incomplete recovery of mineralized drill core, confirmed by a detailed examination of drill core, the missing interval was assumed to have the same ore grade as the adjacent drill core that was recovered. • 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 was recently significantly expanded. • 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 some of the previous underground drilling campaigns of Variscan Mines, full core was assayed this time. • New drillholes have been sampled using reasonable industry procedures for logging, sampling, and QAQC for this project. • The samples were selected by geologists for these new drillholes based on logging of mineralised intervals, and full core was sampled. Samples were preferred at 1m lengths, although they were permitted flexibility from 5cm to 2.00m 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 13 Criteria JORC Code explanation Commentary 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 in-situ 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. 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 full 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 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 • 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 Zn-AA07) 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 twenty-six QAQC samples inserted into the sample stream (total of 130 drill core samples, not including QAQC). These included two high-grade CRMs (OREAS 134B) inserted into the mineralised zone, four medium grade CRMs (OREAS 133A) and five low grade CRMs (OREAS 130) inserted in between waste rock or barren samples, as well as seven blanks. Also, internal duplicates were requested to ALS for eight mineralised samples and these sample ID’s were indicated to the laboratory. In total, for the batch of samples reported within this press release the QAQC samples comprised 16.7% of the sample population submitted for analysis. This frequency and variety of QAQC samples inserted into the sample stream is considered very good; with industry best practice typically requiring 10-20% 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 located below and above the historic stopes of the southern and central parts of the San Jose underground mine. • Primary data for this underground drilling campaign is currently stored in excel and all assay certifications and final 14 Criteria JORC Code explanation 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. Commentary • • • • • • • 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 or loss of barren core). 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 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. The new drill collars reported in this news release were located in the high-resolution 3D void model for the San Jose mine, and their location was then confirmed using an 'all-inone’ laser disto device. All the maps and 3D models referenced in this report were 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 pre-existing 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 15 Criteria JORC Code explanation Commentary Data spacing and distribution • 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. were used to capture data inside stopes and drives at San Jose, and these data were registered as a point cloud. The BLK