Ascendant Resources Inc. (TSX: ASND) (OTCQX:
ASDRF; FRA: 2D9) ("Ascendant" or the "Company”) is pleased to
announce that it has acquired from TH Crestgate GMBH
(“Crestgate”) a 25% interest in Redcorp - Empreendimentos Mineiros,
Lda, (“Redcorp”), which holds an 85% interest in the polymetallic
Lagoa Salgada volcanic massive sulphide (“VMS”) Project ( “Lagoa”
of the “Project”) located within the prolific Iberian Pyrite
Belt in Portugal and has an additional option to earn up to an 80%
interest in Redcorp upon completion of the milestones highlighted
below.
Chris Buncic, President & CEO states: “While
we are very cognizant of our responsibility to continue the strong
progress and operational excellence that we have achieved at our El
Mochito mine in the last 18 months, we are extremely pleased to
work with Crestgate and Redcorp to develop a project that has the
potential of becoming a mine of consequence in the prolific Iberian
Pyrite Belt, a belt that has been transformative for Lundin Mining
and for Trafigura’s mining operations.”
He continued, “Lagoa Salgada already has a
good-sized resource which is very near the scale and grade
necessary to be an operating mine. Leading VMS experts and geo
statisticians engaged by Ascendant concur that a high impact,
low-cost drilling program can be completed by year end that will
have the potential to substantially increase current resources. It
is our expectation that this program could have a material impact
on net asset value for Ascendant shareholders.”
Mr. João Barros, P.Eng., Redcorp’s acting
Country Manager, will lead the development of the Lagoa Salgada
project under the supervision of Ascendant’s management team with
the assistance of C. Tucker Barrie, Ph.D., P.Geo., a geologist with
over twenty-five years of international experience in all aspects
of VMS deposit exploration, development and research, and Mr. Chris
Hale, Ph.D., P.Geo., an exploration geologist with over forty years
of international experience.
After an initial review of the Project for the
Company, C. Tucker Barrie states, "Lagoa Salgada has a relatively
high grade massive sulfide zone to the north as well as significant
bulk tonnage potential with an extensive disseminated sulfide zone
to the south that is open in many directions. We are looking
forward to the opportunity to explore the Project further."
Lagoa Salgada currently has 5.84 million tonnes
of Indicated Resources at 8.88% ZnEq and 2.01 million tonnes of
Inferred Resources at 7.82% ZnEq in the LS-1 Deposit and 2.22
million tonnes at 4.8% ZnEq in the LS-1 Central Deposit (see
below). Lagoa represents a potentially high-grade, polymetallic
zinc-lead-copper exploration opportunity in a low risk, established
and prolific jurisdiction. The Project covers 10,700 hectares with
17 gravimetric targets identified, with only the LS-1 and LS-1
Central zone having been significantly tested.
Lagoa Salgada has strong potential for discovery
of further VMS deposits along the belt given the abundance of
targets and anomalies already identified.
The Iberian Pyrite Belt is host to some of the
world’s largest VMS deposits and mines such as Neves-Corvo (Lundin
Mining Corporation), Aguas Tenidas (Trafigura Mining Group) and
Aljustrel (private). It represents the largest concentration of
massive sulphide deposits in the world, forming an arch through
Portugal and Spain about 240 km long and 35 km wide. According to
the Geological Society of Spain, this region has produced more than
300 million tonnes1 of massive sulphide ore over the past hundred
years.
Highlights of the Lagoa Salgada Project
- The Project is located within the north-western section of the
Iberian Pyrite Belt approximately 120 kilometers southeast of
Lisbon. The Iberian Pyrite Belt stretches from southern Spain into
Portugal and has hosted approximately 60 mines in the last 100
years with exploitation dating back to Roman times. Most notably,
it is home to world class copper-zinc VMS deposits including
Neves-Corvo (Lundin Mining Corporation), Aguas Tenidas (Trafigura
Mining Group) and Aljustrel (private).
- The Iberian Pyrite Belt is a thrust faulted sedimentary
sequence with local sub-aqueous volcanic centers that host VMS
deposits. VMS deposits are generally interpreted to be syngenetic
in origin; however, mineralization ranges from sulphide
precipitates to re-worked sulphide/silicate sediments and local
sulphide replacement mineralization located near felsic submarine
volcanic centers. Within the Iberian Pyrite Belt, VMS deposits vary
in size from a few hundred thousand tonnes to greater than 200
million tonnes and have been dated at Upper Devonian to Lower
Carboniferous in age.
- Over the past two years, Crestgate has completed various early
stage geophysical studies and undertaken a drill program to firm up
the current resource defined on site. The Project is ideally
located in terms of infrastructure, community, and strong political
support for development of future mining operations.
- In July 2018, Crestgate updated a January 2018 Technical Report
prepared in accordance with National Instrument 43-101 - Standards
for Disclosure for Mineral Projects (“NI 43-101”) defining a
preliminary Indicated Mineral Resource Estimate of 5.84 million
tonnes grading 8.88% ZnEq and an Inferred Mineral Resources of 2.01
million tonnes grading 7.82% ZnEq, at a 3.5% ZnEq cut-off grade, at
the LS-1 deposit with an additional Inferred Mineral Resource of
2.22 million tonnes grading 4.80% ZnEq, at a 3.5% ZnEq cut-off
grade, outlined at the LS-1 Central deposit. Only 22 drill holes
compose this Mineral Resource Estimate and both deposits remain
open in multiple directions giving Ascendant confidence in the
ability to rapidly expand the resource with a modest drill program
over the next 12-month period. (Refer to Tables 1 and 2
below).
Table
1: Mineral Resources for the LS-1 Deposit at a 3.5% ZnEq cut-off
grade – Effective date January 5, 2018
Classification |
Tonnage(‘000 t) |
Zn(%) |
Pb(%) |
Cu(%) |
Ag(gpt) |
Au(gpt) |
ZnEq(%) |
Indicated |
5,840 |
2.79 |
2.96 |
0.32 |
53.54 |
0.78 |
8.88 |
Inferred |
2,010 |
2.44 |
2.80 |
0.24 |
47.37 |
0.65 |
7.82 |
(1) |
Block matrix
is 10mx10mx10m |
(2) |
Grades are
estimated by ordinary kriging interpolation |
(3) |
A cut-off
grade of 3.5% ZnEq was used to report the Mineral Resource for the
LS-1 Deposit |
(4) |
Zinc
equivalent metal grade (ZnEq%) was calculated as follows: ZnEq% =
((Zn Grade * 25.35) + (Pb Grade * 23.15) + (Cu Grade * 67.24) + (Au
Grade * 40.19) + (Ag Grade * 0.62)) / 25.35Metal prices used:
US$1.15/lb Zn, US$1.05/lb Pb, $3.05/lb Cu, US$19.40/oz Ag, and
1,250/oz AuNo recoveries were applied |
(5) |
Mineral
Resources that are not Mineral Reserves do not have demonstrated
economic viability |
(6) |
Shown on a
100% basis. Ascendant holds a 25% interest in Redcorp, the
operating subsidiary which holds an 85% interest in the Lagoa
Salgada Project |
Table 2: Mineral Resources for the LS-1
Central Deposit at a 3.5% ZnEq cut-off grade – Effective date
January 5, 2018
Classification |
Tonnage(‘000 t) |
Zn(%) |
Pb(%) |
Cu(%) |
Ag(gpt) |
Au(gpt) |
ZnEq(%) |
Inferred |
2,220 |
1.91 |
1.11 |
0.51 |
17.76 |
0.07 |
4.80 |
(1) |
Block Matrix
is 10mx10mx10m |
(2) |
Grades are
estimated by ordinary kriging interpolation |
(3) |
A cut-off
grade of 3.5% ZnEq was used to report the Mineral Resource for the
LS-1 Deposit |
(4) |
Zinc
equivalent metal grade (ZnEq%) was calculated as follows: ZnEq% =
((Zn Grade * 25.35) + (Pb Grade * 23.15) + (Cu Grade * 67.24) + (Au
Grade * 40.19) + (Ag Grade * 0.62)) / 25.35Metal prices used:
US$1.15/lb Zn, US$1.05/lb Pb, $3.05/lb Cu, US$19.40/oz Ag, and
1,250/oz AuNo recoveries were applied |
(5) |
Mineral
Resources that are not Mineral Reserves do not have demonstrated
economic viability |
(6) |
Shown on a
100% basis. Ascendant holds a 25% interest in Redcorp, the
operating subsidiary which holds an 85% interest in the Lagoa
Salgada Project |
Transaction Summary – Key Option Terms
(all amounts USD)
|
• |
Ascendant
acquired an initial effective 25% interest for an upfront payment
of $2.45 million composed of $0.8 million in cash ($400,000 on
closing of the transaction and $400,000 on July 15, 2018) and $1.65
million in Ascendant shares, representing an approximate share
dilution of 2.6% on a basic basis and 2.1% on a fully diluted
basis. |
|
• |
Ascendant has
the right to earn a further effective 25% interest via staged
payments and funding obligations as outlined below: |
|
|
- Investing a minimum of $9.0 million directly in the operating
company, Redcorp within 48 months of the closing date, to fund
exploration drilling, metallurgical test work, economic studies and
other customary activities for exploration and development,
and
- Making payments totaling $3.5 million to Crestgate according to
the following schedule or earlier:
|
|
|
|
- 6 months after the closing date: $0.25 million
- 12 months after the closing date: $0.25 million
- 18 months after the closing date: $0.5 million
- 24 months after the closing date: $0.5 million
- 36 months after the closing date: $ 1.0 million
- 48 months after the closing date: $ 1.0 million
|
|
• |
The Company
then has the option to earn an additional 30%, totaling an 80%
interest in Redcorp, the operating subsidiary, by completing a
Feasibility study within 54 months and making a further payment of
$2.5 million to Crestgate. |
|
• |
The Company
will fund all development and future construction costs and recoup
Crestgate’s share of investment through cash flow until
repaid. |
|
• |
Ascendant will
retain a Right of First Offer on the remaining equity held by
Crestgate. |
TSX Approval
Ascendant has received approval of the Toronto
Stock Exchange ahead of this announcement for the issuance of the
Company’s shares distributed as part of the consideration for this
transaction.
Qualified Persons
The technical content of this press release has
been reviewed and approved by Paul Daigle, P.Geo., Senior Associate
of AGP Mining Consultants Inc. Mr. Daigle is responsible for the
Technical Report and Mineral Resource Estimate for the Lagoa
Salgada Project, is independent of Ascendant and is a “Qualified
Person” as defined by NI 43-101.
About TH Crestgate GMBH
TH Crestgate GmbH (Crestgate) is an investment company based in
Basel, Switzerland. Crestgate is currently 49% owned by Mineral and
Financial Investments Limited (M&FI), a Cayman Island
registered, London Stock Exchange listed, Investment Company.
M&FI’s business is to invest in, finance and advise mining
companies.
About Redcorp -
Empreendimentos Mineiros, Lda.
Redcorp is a private Portuguese exploration and
development company, based in Braga, Portugal, and is focused on
the development of the Lagoa Salgada Project. Redcorp is a 100%
owned subsidiary of TH Crestgate GmbH, a Swiss based investment
company.
About Ascendant Resources
Inc.
Ascendant is a Toronto-based mining company
focused on its 100%-owned producing El Mochito zinc, silver and
lead mine in west-central Honduras, which has been in production
since 1948. After acquiring the mine in December 2016, Ascendant
implemented a rigorous optimization program aimed at restoring the
historic potential of the El Mochito mine. In 2017, the Company
successfully completed the operational turnaround it set out to
achieve with sustained production at record levels and
profitability restored. The Company now remains focused on cost
reduction and further operational improvements to drive robust free
cash flow in 2018 and beyond. Ascendant is also focused on
expanding and upgrading known resources through extensive
exploration work for near-term growth. With a significant land
package of 11,000 hectares and an abundance of historical data
there are several regional targets providing longer term
exploration upside which could lead to further resource growth. The
Company is also engaged in the evaluation of producing and
development stage mineral resource opportunities, on an ongoing
basis. The Company's common shares are principally listed on the
Toronto Stock Exchange under the symbol "ASND". For more
information on Ascendant Resources, please visit our website
at www.ascendantresources.com.
Neither the Toronto Stock Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX) accepts responsibility for the adequacy or
accuracy of this release. For further information please
contact:Katherine PrydeDirector, Communications & Investor
RelationsTel: 888-723-7413info@ascendantresources.com
Cautionary Notes to US
Investors
The information concerning the Company’s mineral
properties has been prepared in accordance with National Instrument
43-101 (“NI-43-101”) adopted by the Canadian Securities
Administrators. In accordance with NI-43-101, the terms “mineral
reserves”, “proven mineral reserve”, “probable mineral reserve”,
“mineral resource”, “measured mineral resource”, “indicated mineral
resource” and “inferred mineral resource” are defined in the
Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)
Definition Standards for Mineral Resources and Mineral Reserves
adopted by the CIM Council on May 10, 2014. While the terms
“mineral resource”, “measured mineral resource”, “indicated mineral
resource” and “inferred mineral resource” are recognized and
required by NI 43-101, the U.S. Securities Exchange Commission
(“SEC”) does not recognize them. The reader is cautioned that,
except for that portion of mineral resources classified as mineral
reserves, mineral resources do not have demonstrated economic
value. Inferred mineral resources have a high degree of uncertainty
as to their existence and as to whether they can be economically or
legally mined. It cannot be assumed that all or any part of any
inferred mineral resource will ever be upgraded to a higher
category. Therefore, the reader is cautioned not to assume that all
or any part of an inferred mineral resource exists, that it can be
economically or legally mined, or that it will ever be upgraded to
a higher category. Likewise, you are cautioned not to assume that
all or any part of a measured or indicated mineral resource will
ever be upgraded into mineral reserves.
Readers should be aware that the Company’s
financial statements (and information derived therefrom) have been
prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting
Standards Board and are subject to Canadian auditing and auditor
independence standards. IFRS differs in some respects from United
States generally accepted accounting principles and thus the
Company’s financial statements (and information derived therefrom)
may not be comparable to those of United States companies.
Forward Looking
Information
This news release contains "forward-looking statements" and
"forward-looking information" (collectively, "forward-looking
information") within the meaning of applicable Canadian securities
legislation. All information contained in this news release, other
than statements of current and historical fact, is forward-looking
information. Often, but not always, forward-looking information can
be identified by the use of words such as "plans", "expects",
"budget", "guidance", "scheduled", "estimates", "forecasts",
"strategy", "target", "intends", "objective", "goal",
"understands", "anticipates" and "believes" (and variations of
these or similar words) and statements that certain actions, events
or results "may", "could", "would", "should", "might" "occur" or
"be achieved" or "will be taken" (and variations of these or
similar expressions). Forward-looking information is also
identifiable in statements of currently occurring matters which may
continue in the future, such as "providing the Company with", "is
currently", "allows/allowing for", "will advance" or "continues to"
or other statements that may be stated in the present tense with
future implications. All of the forward-looking information in this
news release is qualified by this cautionary note.
Forward-looking information in this news release
includes, but is not limited to, statements regarding the exercise
of the option rights to increase the Company’s interest in the
Lagoa Salgada Project, the acceleration of exploration activities
at the Lagoa Salgada Project, the material growth of the Company’s
exposure to the base metal market and the existence of significant
exploration upside. Forward-looking information is not, and cannot
be, a guarantee of future results or events. Forward-looking
information is based on, among other things, opinions, assumptions,
estimates and analyses that, while considered reasonable by
Ascendant at the date the forward-looking information is provided,
inherently are subject to significant risks, uncertainties,
contingencies and other factors that may cause actual results and
events to be materially different from those expressed or implied
by the forward-looking information. The material factors or
assumptions that Ascendant identified and were applied by Ascendant
in drawing conclusions or making forecasts or projections set out
in the forward-looking information include, but are not limited to,
the ability of the Company to carry on an extensive exploration
program, the ability of the Company to fund the exploration
activities and to make the required payments to earn its additional
interest in Redcorp, the ability of the Lagoa Salgada Project to
increase the Company’s exposure to the base metal market, and other
events that may affect Ascendant's ability to develop its project;
and no significant and continuing adverse changes in general
economic conditions or conditions in the financial markets.
The risks, uncertainties, contingencies and
other factors that may cause actual results to differ materially
from those expressed or implied by the forward-looking information
may include, but are not limited to, risks generally associated
with the mining industry, such as economic factors (including
future commodity prices, currency fluctuations, energy prices and
general cost escalation), uncertainties related to the development
and operation of Ascendant's projects, exploration activities,
dependence on key personnel and employee and union relations, risks
related to political or social unrest or change, rights and title
claims, operational risks and hazards, including unanticipated
environmental, industrial and geological events and developments
and the inability to insure against all risks, failure of plant,
equipment, processes, transportation and other infrastructure to
operate as anticipated, compliance with government and
environmental regulations, including permitting requirements and
anti-bribery legislation, volatile financial markets that may
affect Ascendant's ability to obtain additional financing on
acceptable terms, the failure to obtain required approvals or
clearances from government authorities on a timely basis,
uncertainties related to the geology, continuity, grade and
estimates of mineral reserves and resources, and the potential for
variations in grade and recovery rates, uncertain costs of
reclamation activities, tax refunds, hedging transactions, as well
as the risks discussed in Ascendant's most recent Annual
Information Form on file with the Canadian provincial securities
regulatory authorities and available at www.sedar.com.
Should one or more risk, uncertainty,
contingency, or other factor materialize, or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, the reader should not place undue reliance on
forward-looking information. Ascendant does not assume any
obligation to update or revise any forward-looking information
after the date of this news release or to explain any material
difference between subsequent actual events and any forward-looking
information, except as required by applicable law.
____________________________1 Gibbons, Wes &
Moreno, Teresa, Ph.D. & Geological Society of London (2002) The
geology of Spain. Geological Society, London
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