TIDMMAFL
RNS Number : 6687K
Mineral & Financial Invest. Limited
23 April 2020
Mineral & Financial Investments Limited
Investment Update: Redcorp Outlines 2020 Exploration Program at
Its Highly Prospective Lagoa Salgada Project In Portugal
HIGHLIGHTS:
-- Extensive 8,000m drill program and IP program planned at Lagoa Salgada for 2020
-- Drilling in the North Zone will focus on converting and
upgrading Mineral Resources with the goal of increasing overall
tonnage and ZnEq grade of the resource
-- Exploration Program on the highly prospective copper-rich
South Zone expected to expand and upgrade the Mineral Resources
-- Drilling contractor on standby to begin drill program
George Town, Cayman Island - 23 April 2020 - Mineral &
Financial Investments ("M&FI" or the "Company") , the AIM
quoted resources investment company, is pleased to announce
Ascendant Resources Inc's ("Ascendant Resources") 2020 exploration
plans for the Lagoa Salgada VMS project. This project is owned by
M&FI's 75% subsidiary Redcorp Empreedimentos Mineiros Lda.
("Redcorp").
Ascendant Resources' exploration program has been planned on the
back of the robust Preliminary Economic Assessment results released
on January 14, 2020. The exploration program includes downhole IP
(Induced Polarity) and, subject to funding, drilling aimed at
expanding and upgrading the Central and South Zones and the
copper-rich resource. Additional drilling of the southern extension
of the high-grade massive sulphide mineralization of the North Zone
is also planned to expand the Indicated Mineral Resources, again
this is subject to funding being sourced. The program includes four
metallurgical drill holes for further metallurgical testing. The
work to be completed by Ascendant Resources and Redcorp, is to be
funded and guided by Ascendant Resources, as part of Ascendant's
previously announced earn-in agreement with M&FI.
The main objective of the proposed program is to increase and
upgrade tonnage at the copper-rich South Zone while increasing and
upgrading tonnage and grade in the North Zone. Ascendant Resources
intends to use the positive results from this exploration program
to form the basis for an updated Mineral Resource Estimate in the
latter half of the year which Redcorp will use to commence a
Feasibility Study ("FS") by the end of the year. Ascendant
Resources and Redcorp are engaged with the drilling company and
subject to funding, the drilling is set to commence as soon as the
labour restrictions due to the COVID-19 pandemic are lifted.
Ascendant is currently talking to financial partners to source the
funding for this programme and is hopeful that the drill program
can be funded by alternative non-dilutive measures for its
shareholders.
Jacques Vaillancourt, Chairman of Mineral and Financial
Investments Limited "Given the success and knowledge gained from
the 2019 exploration campaign , which increased the Measured and
Indicated resource to over 10.3 million tonnes and added 10.3
million tonnes of Inferred resources, we have a great degree of
confidence in Ascendant Resources' ability to substantially expand
and upgrade the Mineral Resources in 2020. We are especially
interested in the South and Central Zones where Ascendant hope to
greatly improve CuEq tonnage and grade, as drilling in these zones
has been very limited to date. Data suggests that these zones have
the potential to be larger than the North Zone and may also be
connected at depth in one large deposit. Though Lagoa Salgada is in
the early stages of exploration, it has the hallmarks of being a
comparable project to its large neighbors on this World Class
mineral belt."
He continued, "With the expectation to replicate the exploration
success achieved in previous programs, Redcorp and Ascendant
Resources plan to complete an updated Mineral Resource Estimate in
the latter half of the year and commence a Feasibility Study by the
end of the year following up on the robust results of the
Preliminary Economic Assessment that was announced on January 14,
2020. "
Targeted Drilling Program Details
The planned 2020 exploration program is set to include
approximately 8,000 meters of drilling with the majority of
drilling targeting the South and Central Zones where Ascendant
Resources and Redcorp believes there is significant opportunity to
expand the current copper-rich Resource.
Drilling allocated to the North Zone will focus on converting
and upgrading Mineral Resources with the goal of increasing overall
tonnage and ZnEq grade of the resource.
Figure 1: South Zone 2020 Planned Drill Holes
http://www.rns-pdf.londonstockexchange.com/rns/6687K_1-2020-4-23.pdf
Figure 2: North Zone 2020 Planned Drill Holes
http://www.rns-pdf.londonstockexchange.com/rns/6687K_1-2020-4-23.pdf
Figure 3: LS West Region (incl. North & South Zones) Planned
Drill Holes 2020
http://www.rns-pdf.londonstockexchange.com/rns/6687K_1-2020-4-23.pdf
Geophysics Program
Redcorp and Ascendant Resources's planned 2020 exploration
program will also include extensive follow on work on the
geophysical anomalies identified from Induced Polarization ("IP")
resistivity and chargeability surveys conducted in 2019, as this
has been a very useful tool to date in identifying mineralization
and possible extensions at Lagoa Salgada.
IP surveys at depth in the North Zone shows the massive sulphide
as a clearly outlined conductivity anomaly defined by the blue area
that extends deeper and to the northwest, beyond the 2019 drilling.
It also extends 150m to the south and 100m deeper than the North
Zone Massive Sulphide mineralization known from the 2019 drilling
indicated the potential for.
Figure 4: IP Resistivity and Chargeability Anomalies
http://www.rns-pdf.londonstockexchange.com/rns/6687K_1-2020-4-23.pdf
As part of the drill program Redcorp and Ascendant Resources are
planning four large diameter metallurgical drill holes to support
additional metallurgical test work to improve of the PEA results.
Redcorp and Ascendant Resources plan to complete an updated Mineral
Resource Estimate with the new drilling and commence a Feasibility
Study by year-end focused on mine development at the North Zone
based on the results of this program.
Mineral Resource Estimate
As outlined in the Mineral Resource Estimate (see announcement
dated September 25, 2019), with an effective date of September 5,
2019, Lagoa Salgada currently has 10.33 million tonnes of Measured
and Indicated Resources at 9.06% ZnEq[1] and 2.50 million tonnes of
Inferred Resources at 5.93% ZnEq in the North Zone. In the South
Zone, there is 2.47 million tonnes of Indicated Resources at 1.54%
CuEq and 6.08 million tonnes of Inferred Resources at 1.37% CuEq.
An additional, 1.71 million tonnes of Inferred Resources at 1.66%
CuEq sits in the Central Zone, which lies between the other two
larger zones.
The Lagoa Salgada Project represents a potentially high-grade,
VMS exploration opportunity in a low risk, well established and
prolific jurisdiction. The Project covers 10,700 hectares with
numerous gravity anomalies identified with only the LS West area
having been significantly tested.
Preliminary Economic Assessment Highlights Recap
The Technical Report entitled, "Technical Report and PEA for the
Lagoa Salgada Property, Setúbal District, Portugal", supporting the
robust results from the maiden Preliminary Economic Assessment
("PEA") for the North Zone only at the Lagoa Salgada VMS project
was prepared in accordance with Canadian National Instrument 43-101
("NI 43-101") with an effective date of December 19, 2019. This is
available on the Company's website.
The report outlines the economic assessment for Lagoa Salgada as
it assumes a two-stage underground mining development scenario,
with single trackless ramp access, transverse sub-level open
stoping method with paste backfill. Ventilation and secondary
escape ways are planned through raise-bored holes to surface.
Milling rates of 2,700 tonnes per day in a standard process circuit
is anticipated, with primary crushing, grinding, flotation and
leaching of tailings to produce concentrates including lead, zinc,
copper and tin, as well as gold and silver doré. There is ample
opportunity for extensive expansion from future exploration work to
define additional resources to extend the mine life or increase the
scale of the outlined operation.
Highlights from the PEA for the North Zone include:
-- After-tax IRR of 31% and NPV(8%) of $106M (C$139M @$1.31CAD/USD)
-- Nine-year mine life with production scenario of 2,700 tpd
-- Average annual EBITDA of $54.2 million
-- Four-year payback period of initial Capex of $162.7 million
-- Average operating costs of $49.43/t milled represents low cost production scenario
-- Low average annual cash costs of $0.44/lb ZnEq and average
annual All-In Sustaining Cost (AISC) of $0.66/lb ZnEq
-- Significant upside opportunities remain with near-resource
exploration targets identified with multiple deposits open
laterally and at depth, and broader targets untested
Highlights of the key project metrics are provided in the
following table on a 100% basis:
PEA Key Highlights Metrics
Project IRR pre-tax 37%
---------------------
NPV(8%) pre-tax $137 million
---------------------
Project IRR after-tax 31%
---------------------
NPV(8%) after-tax $106 million
---------------------
Life of mine pre-tax cash flow $ 250 million
---------------------
Life of mine after-tax cash
flow $ 202 million
---------------------
Construction period 2 years
---------------------
Payback period 4 years
---------------------
Life of mine 9 years
---------------------
Average Annual Production 1.0 million tonnes
---------------------
Initial Capital Expenditure $ 162.7 million
---------------------
LOM Sustaining Capital Expenditure
& Closure $ 20.2 million
---------------------
Average annual operating costs $ 49.43 /t milled
---------------------
Average Annual operating costs $0.44 /lb ZnEq
(C1)
---------------------
Average annual All-In Sustaining $0.66 /lb ZnEq
Costs (AISC)
---------------------
Metal Price Assumptions(1)
---------------------
Zinc $1.20/lb
---------------------
Lead $1.05/lb
---------------------
Copper $2.70/lb
---------------------
Silver $18/oz
---------------------
Gold $1,400/oz
---------------------
Tin $7.50/lb
---------------------
Recovery Assumptions Massive Sulphide
---------------------
Zn 80%
---------------------
Pb 65%
---------------------
Cu 25%
---------------------
Ag 75%
---------------------
Au 75%
---------------------
Sn 30%
---------------------
Recovery Assumptions Gossan
---------------------
Pb 65%
---------------------
Sn 40%
---------------------
Ag 66%
---------------------
Au 86%
---------------------
Average Annual Metal Production
---------------------
Zn 12.5kt
---------------------
Pb 13.7kt
---------------------
Cu 0.2kt
---------------------
Ag 1.1Moz
---------------------
Au 13koz
---------------------
Sn 0.3kt
---------------------
Notes to Table:
(1) The project economics have been calculated using consensus
prices at the time of the Resource Estimate report in September
2019.
The PEA was prepared by AMC Mining Consultants (Canada) Ltd
(AMC) with contributions from Resource Development Inc (RDI) for
Mineral Processing and Micon International Limited (Micon), who
estimated the Mineral Resources.
The PEA is preliminary in nature, as it includes Inferred
Mineral Resources that are considered too speculative geologically
to have the economic considerations applied to them that would
enable them to be categorized as Mineral Reserves, and there is no
certainty that the preliminary economic assessment will be
realized.
The Technical Report is available for review under the Company's
profile on SEDAR and on the Company's website.
Technical Disclosure
The PEA summarized in this press release is intended to provide
only an initial, high-level review of the project potential and
design options. The PEA mine plan and economic model include
numerous assumptions and the use of Inferred Mineral Resources.
Inferred Mineral Resources are considered to be too speculative to
be used in an economic analysis except as allowed for by Canadian
Securities Administrators' National Instrument 43-101 in PEA
studies. There is no guarantee that Inferred Mineral Resources can
be converted to Indicated or Measured Mineral Resources, and as
such, there is no guarantee the project economics described herein
will be achieved.
Review of Technical Information
The scientific and technical information in this press release
has been reviewed and approved by References in this announcement
to exploration results and resource updates have been approved for
release by Joao Barros, BSc (Engineering), MSc (Geology), who has
more than 16 years of relevant experience in the field of activity
concerned. Mr. Barros is a Member of the Portuguese Engineers
Association. Mr. Barros is employed by Redcorp Empreedimentos
Mineiros, Lda., a 75% owned subsidiary of M&FI, and has
consented to the inclusion of the material in the form and context
in which it appears.
COVID 19
By way of general update, the Company confirms that it has been
advised that all operations at Lagoa Salgada remain suspended due
to the lockdown imposed in Portugal. The Company understands that
Ascendant Resources continue to run desktop work remotely, and a
further update will be provided when the restrictions on activity
at site is lifted.
FOR MORE INFORMATION:
James Lesser, Mineral & Financial Investments Ltd. +44 777 957 7216
Katy Mitchell, WH Ireland Group Limited +44 161 832 2174
Jon Belliss, Novum Securities Limited +44 207 399 9400
ABOUT MINERAL AND FINANCIAL INVESTMENTS LIMITED.:
Mineral and Financial Investments Limited is a Cayman Island
based investment company quoted on AIM, a market of the London
Stock Exchange. M&FI has 22 investments in the natural resource
sector with the majority in the metals and minerals sector and has
about 29% of its investment portfolio in precious metal
investments. M&FI's Net Asset Value per share (NAVPS)is 15.19p,
as of December 31, 2019. M&FI's NAVPS has risen at a Compound
Annual Growth Rate (CAGR) of 34.4% over the past 3 years.
[1] See notes to Mineral Resource Estimate tables below for ZnEq calculation.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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