Announcement PDF ASX Announcement | 10 September 2024 Variscan Mines Limited (ASX:VAR) HISTORIC HIGH GRADE ZINC-LEAD ASSAYS OUTSIDE OF MINERAL RESOURCE MODEL AT UDIAS MINE Highlights • • • • • Newly compiled, assays from historic underground face-sampling at the Udias Mine show very high-grade zinc-lead results, confirming mineralization outside of the current Mineral Resource Estimate footprint The high-grade sample results taken along development drives and faces include: o Sample UTS-15: 4.50m @ 26.47% Zn, 19.46% Pb o Sample UTB-65: 2.80m @ 35.87% Zn, 0.17% Pb o Sample UTB-11: 4.00m @ 21.50% Zn, 0.32% Pb o Sample B-20: 3.00m @ 28.20% Zn, 5.90% Pb o Sample UTB-32: 2.00m @ 36.95% Zn, 0.41% Pb o Sample UTB-132: 2.00m @ 35.39% Zn, 0.07 % Pb o Sample UTB-86: 4.00m @ 16.39% Zn, 2.18% Pb o Sample D-5: 1.55m @ 41.00% Zn, 0.22% Pb Total batch of 337 samples compiled over distance of 2.2km Samples have supported definition of high-priority targets for forthcoming underground drilling at Udias Mine due to commence next month Novales-Udias Project continues to progress with demonstrable milestones expected in H2 2024; drilling in Udias Mine, an updated Mineral Resource Estimate and publication of a Mine Re-Start Study Variscan Mines Limited (ASX:VAR) (“Variscan” or “the Company”) is pleased to report assay results compiled from historic data recording face sampling at the former producing Udias Mine, situated within the Novales-Udias Project, located in Cantabria, northern Spain. Variscan’s Managing Director & CEO, Stewart Dickson said, “These super high-grade zinc-lead sampling results are very exciting ahead of Variscan drill-testing the Udias Mine complex for the first time. The results which derive from historical face sampling show excellent grades outside the existing Mineral Resource Estimate model. With drilling in these areas about to start, we remain on track to update the Mineral Resource Estimate by year end. We believe that a sizeable tonnage of highgrade zinc sulphide mineralization remains and has been untouched for nearly a century. 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.” Figure 1. Plan view of underground face sampling results in the Udias Mine Ahead of forthcoming underground drilling at the Udias Mine complex, Variscan has conducted a thorough review of archive data and compiled an extensive batch of face sampling assay results. These very high-grade results together with positive historical drilling results (refer ASX Announcement 7 August 2023) have delineated high-priority targets for drill testing. Drilling is expected to commence next month. 2 The majority of the Udias Mine sits outside of the current Mineral Resource Estimate and has not yet been drilled by Variscan. The southern part of the Udias Mine, exceeding 1.4 km in length, has never been drilled at all. The Udias Mine complex is directly linked underground to the San Jose Mine near Novales, and both mines sit on the 12km-long Novales Trend. High grade sampling results from Udias Mine ahead of underground drilling Variscan have compiled a significant batch of historical assay results from 337 samples. The sampling is understood to have taken place in the early 1980s, some 50 years after all mining operations had ceased. The areas sampled have been inspected by the Variscan geology team to conduct “ground-truth” verification as well as geological and mineralization mapping. This has confirmed that these areas have extensive mine development (drives and stopes) although limited to the upper mineralized horizons where calamine mineralization occurs. Sulfide zinc-lead mineralization was never mined at Udias because of the lack of suitable ore processing technology pre-1930 and has been proven to continue along strike for over 2.2km, most of which is not included in the existing MRE model. Figure 2. Distribution of assays from underground face sampling results in the Udias Mine 3 Figure 3. Simplified geological cross-section showing connectivity and continuity between San Jose Mine and Udias Mine Figure 4. (LHS) a. Underground inspection of sampling location M40 in Udias Mine (RHS) b. Visible sphalerite (zinc ore) and Galena (lead ore) from Sample UTM-9 Future drilling will test targets in the Udias Mine complex for the first time Varican intends to commence drilling in the Udias Mines next month. This mine complex has not been drilltested by Variscan yet. The positive sampling data reported in this announcement is augmented by historical drill-hole data already compiled and reported by Variscan for the northernmost part of the Udias Mine. The drilling and the sampling indicate that there is excellent continuity of mineralisation extending, along strike, in a broad south-westerly direction from the San Jose mine for over 3km and links both mines. The style of zinc mineralisation is identical to that found at the San Jose Mine and consists of multiple stacked lenses of high-grade zinc sulphide mineralization occurring at the same elevations as at San Jose (i.e., no vertical offset). 4 Figure 5. Plan view of drill-hole data illustrating significant exploration potential as mineralisation extends on strike to the south west of San Jose Mine (refer ASX release 7 August 2023) Varsican will continue to acquire and review historic data to refine planning of the forthcoming drilling in the Udias Mines. The amount and closely spaced nature of the underground sampling greatly assists in estimation of unmined mineralization as well as targeting possible extensions. 5 Next Steps & Way Forward The Novales-Udias Project continues to progress with demonstrable milestones expected in H2 2024; • • • Underground drilling in Udias Mine Updated Mineral Resource Estimate Publication of a Mine Re-Start Study 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 6 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. 7 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 8 Figure 6. Map of Novales-Udias Project Licence Areas with Udias Mine highlighted Figure 7. Map of Novales-Udias Project Licence Areas and local infrastructure 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 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, • The sample data referenced in this report relates to historical exploration undertaken by Real Compania Asturiana de Minas (RCAM) – one of the mining companies operating the Project from 1855 till 1983, when it was taken over by Asturiana de Zinc SA (AZSA) - previously a subsidiary of Xstrata / Glencore. The sampling was conducted in 1981-1983, in the years directly preceding the change in project ownership, and the data in paper format is held at the School of Mines and Energy Engineering at Torrelavega, a faculty of the University of Cantabria. The underground sampling consisted of a manual collection of rock chips along vertical profiles in the walls of the galleries and stopes of the Udias mine, ranging in length between 30 cm and 4.50 m (average 1.85 m). The sampling was similar to vertical channel sampling, yet the rock chips were not taken continuously along the profile but from multiple spots separated by distances in the order of 10-20cm, and the given profile length corresponds to the distance between the top and bottom sampling spots. Based on the physical review of the underground sampling sites these cannot be considered ‘true’ channel samples and do not fulfil the present-day industry standard requirements for systematic sampling. Nevertheless they provide most useful, semiquantitative information on grade distribution over wide areas of the Udias mine. The sampling sites were marked on the mine walls with yellow paint, highlighting the location of the sampling profiles and the sample number, and they were reported on detailed mine plans available in paper format. A representative number of sampling sites was checked in situ and was found to visually match the metal grades listed in the historical records, both in terms of zinc versus lead content and in terms of sulphide versus non-sulphide mineralogy. A total of 337 samples are listed in Appendix 1 and the bulk of them have assay data for zinc (sulphide), lead (sulphide), as well as zinc and lead in non-sulphide (‘oxide’) form. The ‘zinc meters%’ column was added by Variscan Mines, solely as a means of assessing the spatial variation of zinc grade in a very approximate manner, and should ‘not’ be relied on, as these were not ‘true’ channel samples. Due to the incomplete nature of the historical sampling methodology and historical records, including details of the procedures implemented and QAQC control, a comment on sample representativity or calibration of measurement systems used by historical workers cannot be made. 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. The present news release does not report any ‘new’ historical drilling information. Detailed information on historical drilling techniques used in the area of the Udias mines can be found in 10 Criteria Drill sample recovery JORC Code explanation • • • Logging • • • Sub-sampling techniques and sample preparation • • • • • • Quality of assay data and laboratory tests • 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 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 Commentary the 7 August 2023 ASX press release by Variscan Mines on the website www.variscanmines.com.au and in the JORC Table 1 included therein. • The present news release does not report any ‘new’ historical drilling information. Detailed information on historical drilling techniques used in the area of the Udias mines can be found in the 7 August 2023 ASX press release by Variscan Mines on the website www.variscanmines.com.au and in the JORC Table 1 included therein. • No geological sample descriptions have been identified in the historical records, but in-situ visual inspection of selected sampling profiles matches well the mineralogy and metal grades reported. • The historical approach to sampling cannot be considered ‘industry standard’ by modern standards as the full length of the sampling profiles had not been sampled, instead focusing on a succession of multiple sampling spots, from which larger rock chips were taken. Therefore, there is significant uncertainty over sampling representativeness and any possible bias, and the assay data are semi-quantitative at most and cannot be relied upon. • No details of the sample preparation techniques and sampling procedures have been identified so far in the historical records. • No details of Quality Control procedures (such as duplicates, Certified Reference Materials and blanks) and whether they were used at the time have been identified from the historical records, 11 Criteria JORC Code explanation • • Verification of sampling and assaying • • • • 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. 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 the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and Commentary and no supporting sampling procedures have been identified. It is inferred that the techniques used were total and representative of technology available in the early 1980s. No comment can be made on whether acceptable accuracy or precision of results have been established. • A representative selection of historical sampling sites has been reviewed in situ by Variscan Mines geologists and found to visually match the metal grades listed in the historical records, both in terms of zinc versus lead content, and in terms of sulphide versus non-sulphide mineralogy. • Full verification of the sampling representativeness will require executing a statistically significant number of channel sample duplicates for the historical sampling profiles, an exercise that is being planned but has not yet been carried out. The principal uncertainty at this stage regards sample representativity (due to the sampling being done at intervals rather than in a continuous manner), rather than verification of assay procedures. • Given the absence of detailed historical information relating to the historical assay data, no adjustment to the assay data has been made, and it was reported as it was recorded in the original documentation. The ‘zinc meters-%’ column was added by Variscan Mines, solely as a means of assessing the spatial variation of zinc grade in a very approximate manner, and should ‘not’ be relied on, as these were not true channel samples. • The location of the sampling sites (UTM coordinates) was done by georeferencing detailed historical mine plans with the sampling sites marked on them, after in situ verification in several of the sampling areas. The georeferencing of detailed underground mine plans is reasonably accurate owing to a prior survey on surface of several topographic reference points (mine portals, mine shaft, and identified historical surface drillholes reaching the underground workings), which were surveyed using an ultra-high resolution Hi-target Inno1 GPS unit. A high-resolution 3D laser topographic survey of the Udias mines is planned for Q4 2024 as a means of detailed topographic control that will much improve the georeferencing of the historical sampling sites. • The historical rock chip sampling referenced in this news release was conducted along vertical profiles ranging in length between 30 cm and 4.50 m (average 1.85 m) and concentrated on several key areas of the historical Udias underground mine galleries and stopes. Thus, its spatial coverage is fairly uneven, with some areas of the Udias mines not covered and others sampled at intervals of as little as 1 meter. • The assay data referenced in Appendix 1 of this news release 12 Criteria JORC Code explanation Commentary classifications applied. • Whether sample compositing has been applied. are reproduced as they are listed in written historical records. The ‘zinc meters-%’ column was added by Variscan Mines, as a means of assessing the spatial variation of zinc grade in a very approximate manner, and should ‘not’ be relied on, as the samples discussed were not true channel samples. The reported historical assay data are extremely informative for guiding upcoming systematic drilling of the undeveloped parts of the Udias mine, but as they were not ‘true’ channel samples they cannot be relied upon and are not appropriate for use in Mineral Resource and Ore Reserve estimation procedures. Mineralisation at the Novales-Udias project occurs as stratiform, sub-horizontal and lenticular, following sub-vertical trends, and with lateral and vertical extensions with a significant control by steeply-dipping feeder fault zones. Considering that the mineral lenses at Udias only very gently dip towards the north, the geometry of subvertical profiles is considered very adequate to assess the true thickness of mineralization and lateral changes in zinc grade within the mineral lenses. The only reservation is the fairly uneven sampling density across the Udias mine, as well as the fact that only one horizon of mineralization was sampled, with others (overlying or underlying it) not being sampled, presumably because of poor access. No records relating to sample security have been identified in the historical exploration archives of RCMA . No audits or reviews of the sampling techniques and data have been undertaken for the historical records. • Orientation of data in relation to geological structure Sample security Audits or reviews • 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. • The measures taken to ensure sample security. • The results of any audits or reviews of sampling techniques and data. • • • Section 2 Reporting of Exploration Results Criteria JORC Code explanation Commentary Mineral tenement and land tenure status • 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. • Exploration done by other parties • • The exploitation permit for the Novales-Udias historical mine area that encompasses the San Jose and Udias mines is owned by Variscan Mines and is in good standing. Also, Variscan Mines has recently secured an exploration permit (named ‘Estela’) over a small area in the central part of the Udias mine that was previously excised from the San Jose exploitation permit, with detailed information provided on 8 April 2024 ASX announcement by Variscan Mines on the website www.variscanmines.com.au The author is not aware of any environmental or social license issues that could affect ongoing works within these licences, nor any issues with tenure or permission to operate in this region. On the contrary, the socially and environmentally responsible mineral development undertaken by Variscan Mines has resulted to date in an outstanding social license to operate. The historical data referenced in this news release refer to exploration undertaken by Real Compania Asturiana de Minas (RCAM) - a historic mining company operating the Project in the years 1855-1983. The historical data referenced in this news release and undertaken by the historic workers is held in paper format at 13 Criteria Geology JORC Code explanation • Deposit type, geological setting and style of mineralisation. Commentary • • Drill hole Informati