Solitario Zinc Corp. (“Solitario”) (NYSE American: XPL;
TSX: SLR) is pleased to provide an update on its Lik zinc
project, a review of the sale of its non-core royalty properties in
2018/2019, its corporate G & A cost reduction initiative for
2019, and a brief status report on its Florida Canyon drilling
program.
Lik Project, Alaska
The Lik high-grade zinc project located in northwestern Alaska
is an advanced exploration project joint ventured with Teck
American Incorporated (“Teck”), a wholly owned subsidiary of Teck
Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK), the world’s
third largest zinc miner. Solitario recently received results for
the 2018 Lik exploration program conducted by Teck, and planning is
nearly complete for a jointly funded 2019 exploration program.
The 2018 Lik exploration program consisted of:
- Geologic mapping and geochemical
sampling over the deposit and potential extensions to the
northeast,
- A ground gravity geophysical survey
over prospective stratigraphy, mainly on the eastern half of the
property; and,
- Nineteen previously drilled core holes
were selected and recovered for geologic logging for 2019.
Approximately 1.5 kilometers north-northeast of Lik,
reconnaissance geologic mapping and geochemical sampling in 2018
identified a geochemically anomalous area within stratigraphic rock
units that host Red Dog district mineralization with the presence
of pyritic shales at surface. Although a gravity high is coincident
with this area, the high could also be associated with overlying
carbonate rocks or complicated by topographic effects. This
potential new target, informally called “North Area Prospect,” will
be one of the primary work areas for 2019.
Objectives for the 2019 Lik exploration program include:
- Follow-up geologic mapping and
geochemical sampling in the newly identified North Area
Prospect.
- Multi-element continuous scan of
historic core with state-of-the-art X-ray fluorescence scanning
technology to further define the Lik deposit’s geochemical
signature and characterize its distal geochemical halo to
potentially vector in on new drill targets.
- Complete selective relogging of
historic drill core from the Lik deposit to better understand its
geologic characteristics.
The 2019 Lik exploration program will be jointly funded by Teck
and Solitario and is expected to begin in April and be completed by
the end of September. Teck will manage the 2019 program. Teck and
Solitario anticipate signing an extension to the 2018 Exploration
Agreement to facilitate the 2019 program within the next 90
days.
Review of Sale of Non-Core Royalty Properties
Solitario sold all four of its non-producing royalties during
the past 12 months in two separate transactions. Combined,
Solitario received approximately US$686,000 in cash and a
convertible note valued at approximately US$262,000, for a total of
$948,000.
In April 2018, Solitario sold its royalty interest in the
non-producing Yanacocha property (the “Yanacocha Royalty”) to a
wholly owned subsidiary of Newmont Mining Corporation (“Newmont”)
for approximately $502,000 in cash. The Yanacocha Royalty covered
43 concessions totaling 36,052 hectares. Newmont owns the
underlying mineral concessions covered by the Yanacocha Royalty.
None of the concessions covered by the Yanacocha Royalty have any
reported reserves or resources.
In January 2019 Solitario sold two royalties and an option to
purchase a third royalty to SilverStream SEZC (“SilverStream”), a
private Cayman Island royalty and streaming company. Solitario
received CDN $250,000 in cash (US$184,625) and CDN $350,000
(US$262,500) in a one-year 5% convertible note as payment for the
royalties and option. The note is convertible into SilverStream
stock should SilverStream complete an IPO before the end of the
one-year term. The royalties cover the 125,000-acre polymetallic
Pedra Branca palladium, platinum, gold, nickel, cobalt and chrome
project in Brazil and Solitario’s 3,880-acre Mexico royalty
portfolio. The purchase option covers Solitario’s 16,500-acre
Montana royalty portfolio.
G & A Cost Reduction Initiative
During the fourth quarter of 2018, management of Solitario
undertook an initiative to identify General and Administrative
expenditures that could be reduced or eliminated. Over US$250,000
in annual cost reductions were identified. These ranged from salary
and benefit reductions for all Officers and employees, to
elimination of certain corporate functions and recurring corporate
costs such as outside consulting and lease costs. These cost
reductions were implemented at the first of the year.
Chris Herald commented, “Even though Solitario has ample
financial resources in the Company with nearly US$12 million in
cash and marketable securities, we undertook this effort because of
the depressed state of the junior mining industry and the resultant
share performance of the industry, including Solitario, during
2018. This is what responsible management does when their interests
are directly aligned with shareholders through significant equity
positions in their company.”
Florida Canyon Drilling
Drilling at Florida Canyon will resume in April when the rainy
season typically ends. Up to four core rigs are scheduled to
complete the 41-hole, 17,000-meter drilling program. Assays for the
first four core holes are expected to be received within the next
couple of weeks.
About Solitario
Solitario is an emerging zinc exploration and development
company traded on the NYSE American (“XPL”) and on the Toronto
Stock Exchange (“SLR”). Solitario holds 50% joint venture interest
in the high-grade, open-pitable Lik zinc deposit in Alaska and a
39% joint venture interest (Nexa Resources holds the remaining 61%
interest) on the high-grade Florida Canyon zinc project in Peru.
Solitario also holds a 7.6% equity interest in Vendetta Mining.
Solitario’s Management and Directors hold approximately 9.2%
(excluding options) of the Company’s 58.4 million shares
outstanding. Solitario’s cash balance and marketable securities
stand at approximately US$12.0 million. Additional information
about Solitario is available online at www.solitariozinc.com
Cautionary Statement Regarding Forward
Looking Information
This press release contains forward-looking statements within
the meaning of the U.S. Securities Act of 1933 and the U.S.
Securities Exchange Act of 1934, and as defined in the United
States Private Securities Litigation Reform Act of 1995 (and the
equivalent under Canadian securities laws), that are intended to be
covered by the safe harbor created by such sections.
Forward-looking statements are statements that are not historical
fact. They are based on the beliefs, estimates and opinions of the
Company's management on the date the statements are made and
address activities, events or developments that Solitario expects
or anticipates will or may occur in the future, and are based on
current expectations and assumptions. Forward-looking statements
involve a number of risks and uncertainties. Consequently, there
can be no assurances that such statements will prove to be accurate
and actual results and future events could differ materially from
those anticipated in such statements. Such forward-looking
statements include, without limitation, statements regarding the
Company’s expectation of the projected timing and outcome of
engineering studies; expectations regarding the receipt of all
necessary permits and approvals to implement a mining plan, if any,
at Lik or Florida Canyon; the potential for confirming, upgrading
and expanding zinc, lead and silver mineralized material; future
operating and capital cost estimates may indicate that the stated
resources may not be economic; estimates of zinc, lead and silver
grades of resources provided are predicted and actual mining grade
could be substantially lower; estimates of recovery rates for could
be lower than estimated for establishing the cutoff grade; and
other statements that are not historical facts could vary
significantly from assumptions made in the PEA. Although Solitario
management believes that its expectations are based on reasonable
assumptions, it can give no assurance that these expectations will
prove correct. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include, among others, risks relating to risks that Solitario’s and
its joint venture partners’ exploration and property advancement
efforts will not be successful; risks relating to fluctuations in
the price of zinc, lead and silver; the inherently hazardous nature
of mining-related activities; uncertainties concerning reserve and
resource estimates; availability of outside contractors, and other
activities; uncertainties relating to obtaining approvals and
permits from governmental regulatory authorities; the possibility
that environmental laws and regulations will change over time and
become even more restrictive; and availability and timing of
capital for financing the Company’s exploration and development
activities, including uncertainty of being able to raise capital on
favorable terms or at all; as well as those factors discussed in
Solitario’s filings with the U.S. Securities and Exchange
Commission (the “SEC”) including Solitario’s latest Annual
Report on Form 10-K and its other SEC filings (and Canadian
filings) including, without limitation, its latest Quarterly Report
on Form 10-Q. The Company does not intend to publicly update any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as may be required under
applicable securities laws.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190219005297/en/
Valerie KimballDirector – Investor Relations(800) 229-6827
Christopher E. HeraldPresident & CEO(303) 534-1030, Ext.
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