Ascendant Resources Inc. (TSX: ASND) ("Ascendant"
or the "Company”) is pleased to outline its proposed 2020
exploration program at the Lagoa Salgada VMS project (“Lagoa
Salgada”) located on the prolific Iberian Pyrite Belt in Portugal.
On the back of the robust Preliminary Economic Assessment results
released on January 14, 2020, the exploration program includes
downhole IP and 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 expected to
expand the Indicated Mineral Resources. The program includes four
metallurgical drill holes for further metallurgical testing.
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.
Results from the exploration program are
expected to form the basis for an updated Mineral Resource Estimate
in the latter half of the year which the Company will use to
commence a Feasibility Study (“FS”) by the end of the year. The
Company is engaged with the drilling company and is set to commence
drilling as soon as labour restrictions due to the COVID-19
pandemic are lifted which is expected in the third quarter of 2020.
The drill program is subject to funding, but Ascendant is currently
talking to financial partners and is hopeful that the drill program
can be funded by alternative non-dilutive measures for its
shareholders.
Chris Buncic, President & CEO of Ascendant
stated, “With the agreement for the sale of El Mochito signed and
pending closure, we are excited to focus all our efforts on Lagoa
Salgada and executing this comprehensive exploration program. Given
the success and knowledge gained from the 2019 exploration
campaign, which grew the Measured and Indicated Resource to over
12.8 million tonnes with 10.3 million tonnes of Inferred Resources,
we expect to expand and upgrade Mineral Resources in 2020 using the
same process of guided drilling by the use of IP analysis. We are
especially interested in the South and Central Zones where we 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.”
He continued, “With the expectation to replicate
the exploration success achieved in previous programs, the Company
plans to complete an updated Mineral Resource Estimate in the
latter half of the year and commence a Feasibility Study by end of
the year following up on the robust results of the Preliminary
Economic Assessment the Company announced in January.”
Targeted Drilling Program
Details
The planned 2020 exploration program is set to
include approximately 8,000 metres of drilling with the majority of
drilling targeting the South and Central Zones where the Company
believes there is significant opportunity to expand the current
copper-rich Resource.
The 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
Holeshttps://www.globenewswire.com/NewsRoom/AttachmentNg/63e52f3e-da02-453e-8900-722fa06f8ee2
Figure 2: North Zone 2020 Planned Drill
Holeshttps://www.globenewswire.com/NewsRoom/AttachmentNg/00e9296f-2acd-4d01-91ff-3c01ac9e2db0
Figure 3: LS West Region (incl. North &
South Zones) 2020 Planned Drill
Holeshttps://www.globenewswire.com/NewsRoom/AttachmentNg/7f17ec4c-83a1-4aa8-8e9b-98e33236cea2
Geophysics Program
The Company’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 show the
massive sulphide as a clearly outlined conductivity anomaly,
defined by the blue area in Figure 4 below, that extends deeper and
to the northwest beyond the 2019 drilling. The anomaly extends 150m
to the south and 100m deeper than the North Zone massive sulphide
mineralization identified from the 2019 drilling.
Figure 4: IP Resistivity and Chargeability
Anomalieshttps://www.globenewswire.com/NewsRoom/AttachmentNg/b87312c8-eb9d-4e30-9df0-470f7158fde1
As part of the drill program, the Company has
planned 4 large diameter metallurgical drill holes to support
additional metallurgical test work to improve the PEA results. The
Company plans 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,
with an effective date of September 5, 2019, Lagoa Salgada
currently has 10.33 million tonnes of Measured and Indicated
Resources at 9.06% ZnEq1 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.
Table 1: Lagoa Salgada Updated Mineral
Resource Estimate
North Zone Mineral Resource Estimate - Effective
September 5, 2019
|
|
|
|
Average Grade |
Contained Metal |
Deposit |
Category |
Min |
Tonnes |
Cu |
Zn |
Pb |
Sn |
Ag |
Au |
ZnEq |
AuEq |
Cut-off |
Cu |
Zn |
Pb |
Sn |
Ag |
Au |
|
|
Zones |
(kt) |
(%) |
(%) |
(%) |
(%) |
(g/t) |
(g/t) |
(%) |
(g/t) |
ZnEq% |
(kt) |
(kt) |
(kt) |
(kt) |
(koz) |
(koz) |
North |
Measured(M) |
GO |
234 |
0.13 |
0.70 |
4.32 |
0.36 |
51 |
1.50 |
11.38 |
7.18 |
2.5 |
0.3 |
1.6 |
10.1 |
0.9 |
385.2 |
11.3 |
|
Indicated(I) |
GO |
1,462 |
0.08 |
0.43 |
2.55 |
0.26 |
37 |
0.51 |
6.63 |
4.18 |
2.5 |
1.2 |
6.2 |
37.3 |
3.8 |
1,742.1 |
23.8 |
|
M &
I |
GO |
1,696 |
0.09 |
0.47 |
2.79 |
0.27 |
39 |
0.64 |
7.28 |
4.60 |
2.5 |
1.5 |
7.9 |
47.4 |
4.6 |
2,127.2 |
35.1 |
|
Inferred |
GO |
831 |
0.08 |
0.48 |
2.62 |
0.17 |
27 |
0.37 |
5.66 |
3.57 |
2.5 |
0.7 |
4.0 |
21.8 |
1.4 |
727.6 |
9.9 |
|
Measured(M) |
MS |
2,444 |
0.40 |
3.12 |
2.97 |
0.15 |
72 |
0.74 |
10.95 |
6.91 |
3.0 |
9.7 |
76.3 |
72.5 |
3.7 |
5,623.9 |
58.4 |
|
Indicated(I) |
MS |
5,457 |
0.45 |
2.35 |
2.30 |
0.13 |
75 |
0.67 |
9.55 |
6.03 |
3.0 |
24.5 |
128.1 |
125.6 |
7.3 |
13,221.5 |
116.9 |
|
M &
I |
MS |
7,902 |
0.43 |
2.59 |
2.51 |
0.14 |
74 |
0.69 |
9.98 |
6.30 |
3.0 |
34.2 |
204.4 |
198.1 |
10.9 |
18,845.5 |
175.2 |
|
Inferred |
MS |
1,529 |
0.23 |
1.96 |
1.32 |
0.09 |
45 |
0.49 |
6.36 |
4.01 |
3.0 |
3.6 |
30.0 |
20.2 |
1.4 |
2,219.7 |
24.0 |
|
Measured(M) |
Str |
94 |
0.37 |
0.88 |
0.28 |
0.05 |
17 |
0.12 |
3.08 |
1.94 |
2.5 |
0.3 |
0.8 |
0.3 |
0.0 |
51.0 |
0.4 |
|
Indicated(I) |
Str |
643 |
0.34 |
0.90 |
0.23 |
0.09 |
17 |
0.06 |
3.23 |
2.04 |
2.5 |
2.2 |
5.8 |
1.5 |
0.6 |
354.0 |
1.3 |
|
M & I |
Str |
737 |
0.34 |
0.90 |
0.24 |
0.09 |
17 |
0.07 |
3.21 |
2.03 |
2.5 |
2.5 |
6.6 |
1.7 |
0.6 |
405.0 |
1.7 |
|
Inferred |
Str |
142 |
0.24 |
1.12 |
0.39 |
0.04 |
17 |
0.09 |
2.95 |
1.86 |
2.5 |
0.3 |
1.6 |
0.6 |
0.1 |
75.6 |
0.4 |
North |
M &
I |
All
zones |
10,334 |
0.37 |
2.12 |
2.39 |
0.16 |
64 |
0.64 |
9.06 |
5.72 |
2.9 |
38.2 |
219.0 |
247.2 |
16.2 |
21,377.7 |
212.0 |
North |
Inferred |
All
zones |
2,502 |
0.18 |
1.42 |
1.70 |
0.12 |
38 |
0.43 |
5.93 |
3.74 |
2.8 |
4.6 |
35.6 |
42.6 |
2.9 |
3,022.8 |
34.3 |
Central and South Zones Mineral Resource Estimate
- Effective September 5, 2019
|
|
|
|
Average Grade |
|
|
Contained Metal |
Deposit |
Category |
Min |
Tonnes |
Cu |
Zn |
Pb |
Sn |
Ag |
Au |
CuEq |
|
Cut-off |
|
Cu |
Zn |
Pb |
Sn |
Ag |
Au |
|
|
Zones |
(kt) |
(%) |
(%) |
(%) |
(%) |
(g/t) |
(g/t) |
(%) |
|
CuEq% |
|
(kt) |
(kt) |
(kt) |
(kt) |
(koz) |
(koz) |
Central |
Inferred |
Str |
1,707 |
0.15 |
0.16 |
0.06 |
0 |
12 |
2.22 |
1.66 |
|
0.9 |
|
2.5 |
2.7 |
1.0 |
- |
635.2 |
121.9 |
South |
Measured(M) |
Str/Fr |
0 |
— |
— |
— |
— |
— |
— |
— |
|
0.9 |
|
|
|
|
|
|
|
|
Indicated(I) |
Str/Fr |
2,473 |
0.47 |
1.53 |
0.83 |
0.00 |
19 |
0.06 |
1.54 |
|
0.9 |
|
11.5 |
37.9 |
20.6 |
0.0 |
1,484.7 |
4.7 |
South |
M &
I |
Str/Fr |
2,473 |
0.47 |
1.53 |
0.83 |
0.00 |
19 |
0.06 |
1.54 |
|
0.9 |
|
11.5 |
37.9 |
20.6 |
0.0 |
1,484.7 |
4.7 |
South |
Inferred |
Str/Fr |
6,085 |
0.40 |
1.34 |
0.80 |
0.00 |
17 |
0.05 |
1.37 |
|
0.9 |
|
24.6 |
81.6 |
48.7 |
0.0 |
3,285.2 |
10.0 |
Notes to tables:(1) Mineralized Zones:
GO=Gossan, MS=Massive Sulphide, Str=Stringer, Str/Fr=Stockwork(2)
ZnEq% = ((Zn Grade*25.35)+(Pb Grade*23.15)+(Cu Grade*67.24)+(Au
Grade*40.19)+(Ag Grade*0.62)+(Sn Grade*191.75))/25.35(3) CuEq% =
((Zn Grade*25.35)+(Pb Grade*23.15)+(Cu Grade*67.24)+(Au
Grade*40.19)+(Ag Grade*0.62))/67.24(4) AuEq(g/t) = ((Zn
Grade*25.35)+(Pb Grade*23.15)+(Cu Grade * 67.24)+(Au
Grade*40.19)+(Ag Grade*0.62) )+(Sn Grade * 191.75))/40.19(5) Metal
Prices: Cu $6,724/t, Zn $2,535/t, Pb $2,315/t, Au $1,250/oz, Ag
$19.40/oz, Sn $19,175/t(6) Densities: GO=3.12, MS=4.76, Str=2.88,
Str/Fr=2.88
The Lagoa Salgada project represents an
attractive 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.
The report outlines a robust and compelling
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 NPV8% of
$106M (C$139M @$1.31CAD/USD)
- Nine-year mine life with production scenario of 2,700 tpd
- 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 |
|
Project IRR pre-tax |
37% |
NPV8% pre-tax |
$137 million |
Project IRR after-tax |
31% |
NPV8% 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 (C1) |
$0.44 /lb ZnEq |
Average annual All-In Sustaining Costs (AISC) |
$0.66 /lb ZnEq |
Metal Price Assumptions1 |
|
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.
Review of Technical
Information
The scientific and technical information in this
press release has been reviewed and approved by Robert Campbell,
P.Geo., Vice President, Exploration and Director for Ascendant
Resources Ltd, who is a Qualified Persons as defined in National
Instrument 43-101.
About Ascendant Resources
Inc.
Ascendant is a Toronto-based mining company
focused on its 100%-owned producing El Mochito zinc, lead and
silver mine in Honduras and its high-grade Lagoa Salgada VMS
project located in the prolific Iberian Pyrite Belt in
Portugal.
After acquiring the El Mochito mine in December
2016, Ascendant spent two years implementing a rigorous and
successful optimization program restoring the historic potential of
El Mochito, a mine in production since 1948. With steady state
production achieved, the Company remains focused on further cost
reduction and operational improvements to drive profitability.
The Company is engaged in exploration and the
advancement of the Lagoa Salgada project with the goal of building
upon the defined Mineral Resources and robust results of the maiden
Preliminary Economic Assessment completed in January 2020 and
advancing the project towards construction. Ascendant holds a
21.25% interest in the Lagoa Salgada project through its 25%
position in Redcorp - Empreendimentos Mineiros, Lda, (“Redcorp”)
and has an earn-in opportunity to increase its interest in the
project to 80%. Mineral & Financial Investments Limited owns
the additional 75% of Redcorp. The remaining 15% of the project is
held by Empresa de Desenvolvimento Mineiro, S.A. (EDM), a
Portuguese Government owned company supporting the strategic
development of the country’s mining sector. The Company’s interest
in the Lagoa Salgada project offers a low-cost entry to a
potentially significant exploration and development opportunity,
already demonstrating its mineable scale.
Ascendant Resources is also engaged in the
ongoing evaluation of producing and development stage mineral
resource opportunities. The Corporation'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
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
exploration activities and the results of such activities at the
Lagoa Salgada Project, the ability of the Company to advance the
Lagoa Salgada Project to a Preliminary Economic Assessment, and the
ability of the Company to fund the exploration with funds from
operations. 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 success of the exploration activities at
Lagoa Salgada Project, the Company advancing the project to a
Preliminary Economic Assessment, the ability of the Company to fund
the exploration program at Lagoa Salgada with funds from operations
, 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, 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 See notes to Mineral Resource Estimate tables below for ZnEq
calculation.
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