Announcement PDF ASX Announcement | 11 July 2024 Variscan Mines Limited (ASX:VAR) DRILLING DELIVERS THICK ZINC MINERALISATION OUTSIDE OF CURRENT MINERAL RESOURCE AT SAN JOSE MINE Highlights • • • • • • More strong assay results received from current underground infill and extensional drilling campaign at the San Jose Mine Significant drilling results include: o NDDT033 14.10 m @ 5.31% Zn, 0.44% Pb o NDDT032 11.00 m @ 6.66% Zn, 0.72% Pb o NDDT034 4.65 m @ 5.49% Zn, 0.14% Pb o NDDT035 4.00 m @ 5.92% Zn, 0.26% Pb Results indicate significant mineralisation intersected outside the existing Mineral Resource Estimate model delivering growth potential Drilling successfully tested new structural targets defined from recently completed structural geology study Upscaled underground drilling will continue targeting previously untested south west extensions of San Jose Mine and into the Udias Mine complex All new drilling results are to be incorporated into Mineral Resource Estimate update planned later in CY2024. Variscan’s Managing Director & CEO, Stewart Dickson said, “This is another very pleasing set of results from our recent drilling at the San Jose Mine. The latest results show excellent intercepts and grades outside the existing Mineral Resource Estimate model. With drilling continuing, we remain on track to update the Mineral Resource Estimate by year end. I am particularly excited about drilling in the Udias Mine for the first time. We believe that a sizeable tonnage of high-grade zinc sulphide mineralization remains and has been untouched for decades. Using our own portable drill rig and staff, we are able to conduct this program efficiently, cost effectively and with a high degree of flexibility. With the potential to grow the Mineral Resource, the opportunity to unlock further value from the outstanding and newly enlarged Novales-Udias Project continues to be apparent. We continue to progress one of the highest-grade, development stage zinc deposits in Europe towards re-starting production.” Variscan Mines Limited (ASX:VAR) (“Variscan” or “the Company”) is pleased to report further high-grade zinc intercepts from the ongoing underground diamond drilling program at the San Jose Mine, near Novales, located in Cantabria, northern Spain. As previously stated, the underground drilling program at the San Jose Mine has been upscaled in duration and meterage. It is focused on expanding known zones of mineralization and discovering new zones with a view to supporting an upgraded Mineral Resource Estimate. The underground drilling program has the following objectives to support the eventual restart of production at the San Jose Mine: • drill-test structures within and beyond the defined Mineral Resource Estimate (“MRE”) area which have seen limited exploration drilling • discover new zones of mineralization to increase overall size of current Mineral Resource Estimate tonnage • increase the confidence level of the orebody Drilling supports structural geological interpretation and expands mineralization beyond existing Mineral Resource Estimate model The drilling results reported here have targeted Zn-Pb structures identified from geological assessment and the structural targeting study (refer ASX announcement 19 February 2024) which has resulted in a significantly improved understanding of the controls on multi-phase Zn-Pb mineralization at the San Jose Mine. Further, these areas were previously under-explored or under-exploited. The high-grade intercepts reported hit the cross-cutting D2 structure linking Stope 200 and the La Caseta Trend. This target area lies outside of the existing MRE model. Figure 1. Plan view of new drill-hole data over the Central Zone, San Jose Mine 2 Figure 2. 3D view of drill-hole locations testing D2 structural targets between Stope 200 and the La Caseta Trend in the San Jose Mine Drilling indicates Mineral Resource Estimate upgrade potential The newly identified mineralization arising from the positive drill results is outside the existing MRE and shows the potential to increase the mineral resource. The drilling results demonstrate significant potential for resource extensions both above and below the main gallery level. Figure 3. Plan view of recently completed drill-hole locations in relation to the Mineral Resource Estimate over the Central Zone, San Jose Mine 3 Figure 4. 3D section view of drill-hole locations testing D2 structural targets between Stope 200 and beside the La Caseta Trend in the San Jose Mine Figure 5. Diamond Drill Core from hole NDDT033 illustrating the interval of high-grade sphalerite hosted in dolostone (interval shown: 4.15m - 19.3m). 4 Future drilling will test targets in the Udias Mine complex for the first time Building on the success of the current underground drilling campaign, Variscan intends to commence drilling in the Udias Mines which are linked to the San Jose Mine. This complex has not been drill-tested by Variscan yet. Variscan has complied and reported historical drill-hole data which indicates that there is excellent continuity of mineralisation extending, along strike, in a south-westerly direction over 1.4km between the San Jose Mine and the extensive Udias workings (Figure 6). The style of zinc mineralisation is identical to that found at the San Jose Mine as it is predominately high-grade zinc sulphides and occurs at the same elevation (i.e., no vertical offset). Figure 6. Plan view of drill-hole data illustrating significant exploration potential as mineralization extends on strike to the south west of San Jose Mine (refer ASX release 7 August 2023) 5 Next Steps & Way Forward Variscan continues to deliver on its upscaled underground drilling program. Further drilling results are expected in the coming months and together with a planned surface drilling campaign in 2024, the objective of delivering an 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 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 X (formerly Twitter) Visit our investor website: www.variscan.com.au 6 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 carbonatehosted Zn-Pb deposit in Spain 1 and one of the world’s richest MVT deposits 2. 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 3. Novales-Udias Project Highlights • • • • • • • • • • • • • Near term zinc production opportunity (subject to positive exploratory work) Large tenement holding of +100 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 45) 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% Zn 6 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 10-20% Zn and in some instances +30% Zn 7 Assay results of recent targeted grab samples taken from within the underground Novales Mine recorded 31.83% Zn and 62.3% Pb 8 Access and infrastructure all in place Local community and government support due to historic mining activity Maiden MRE of 1.08 Mt at 10% Zn established in Q4/2023 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. 2 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 3 Refer to ASX announcement of 29 July 2019 4 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. 5 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. 6 These figures have been taken from historical production data from the School of Mines in Torrelavega historical archives. 7 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) 8 Refer to ASX Announcement of 19 December 2020 7 Figure 7. Map of Novales-Udias Project Licence Areas Figure 8. Map of Novales-Udias Project Licence Areas and local infrastructure 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 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. 9 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 Report. • 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. • 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). • 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 • Drilling techniques Drill sample recovery • • • 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 southern part of the San Jose Mine. All holes consist of underground diamond drillholes and were sampled as full core from 25cm to 1.30m 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. • Drill core recovery for this batch of underground drillholes was good, in the 85.9 – 97.0% range (average. 91.4%). 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 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. 10 Criteria Logging JORC Code explanation 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. 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. 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 (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established. Commentary • 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 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 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 (of mineralisation), 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 25cm to 1.30m 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 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. • For the new drilling reported the sampling is considered total as no drill core 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 fourteen QAQC samples inserted into the sample stream (total of 118 drill core samples, not including QAQC). These included one high-grade CRM (OREAS 134B) inserted into the mineralised zone, two medium grade CRMs (OREAS 133A) and six low grade CRMs (OREAS 130) inserted in between waste rock or barren samples, as well as one blank. Also, internal duplicates were requested to ALS for four 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 10.6% of the sample population submitted for analysis. This frequency and variety of QAQC 11 Criteria Verification of sampling and assaying Location of data points JORC Code explanation Commentary • 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. • • 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. • • • • • • • • samples inserted into the sample stream is considered reasonable; 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 the historic stopes of the southern part of the San Jose underground mine. 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 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. 12 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. • The reported drillholes have been drilled in various orientations (both downward and upward) from drilling pads underground, and their spacing is variable (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. There were 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. Orientation of data in relation to geological structure • 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. Sample security • The measures taken to ensure sample security. • 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 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 were 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 geologists. Audits or reviews • The results of any audits or reviews of sampling techniques and data. • 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 ten