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Mining
Variscan Mines has secured the future of one of the key pieces at its flagship Novales-Udias zinc project in northern Spain after receiving a three year extension to the Buenahora exploration licence.
Buenahora – translating literally to ‘good time’ in Spanish – could be a major growth prospect outside the main San Jose underground mine where high grade zinc and lead results saw Variscan (ASX:VAR) shares rise almost 50% over the past 12 months.
Once controlled by Xstrata-Glencore’s Asturiana de Zinc operation in the early 2000s, Variscan is planning to begin surface drilling this quarter with permits and results from a geophysical survey over the tenement currently pending.
“Securing the renewal of the Buenahora Exploration Licence is another very important milestone in Variscan’s efforts to explore and ultimately develop its Spanish zinc assets,” Variscan managing director and CEO Stewart Dickson said.
“In anticipation of the award of final permits, we are gearing up for surface drilling of this highly prospective licence area, previously controlled by Asturiana de Zinc (Xstrata-Glencore) until 2003.
“The tenement area has extensive MVT style carbonate-hosted zinc mineralisation featuring high-grade zinc and lead deposits across a multitude of historical workings. Our own field sampling has returned high grade results.
“We recently completed a geophysical survey over the Buenahora Exploration License area and expect it to deepen our understanding of already known drill targets and also identify new prospects. We look forward to reporting the survey results and updating the market on the progress of our planned drilling programme.”
The expansion of Variscan’s drilling program to Buenahora will overlap with underground drilling currently taking place at San Jose, where the discovery of high-grade zinc lenses last year helped Variscan rerate.
It was a well-timed find. Zinc is now trading near all time highs after an energy price crunch saw a number of smelters in China and Europe wind back production.
When the nearby Reocin mine, the largest Mississippi Valley Type deposit in the world, shut in 2003 zinc was fetching just US$790. Prices are now in excess of US$3600/t.
More importantly the long-term outlook is looking positive, with global mining giant South32 (ASX:S32) recently making zinc one of its priorities as it pushed forward with plans to develop its multi-billion dollar Taylor deposit in the USA.
Zinc is a big growth story, and Variscan is looking to play its part at Novales-Udias.
Buenahora, which hosts part of the 9km Novales Trend and the 3km sub-parallel Udias Trend, has already demonstrated its potential for high grade zinc.
The Udias area in the southwest of the licence area has multiple prospective but untested drill targets including the Magdalena, Sinforosa, Motiles and Pepita prospects, situated on strong geochemical anomalies on trends including small scale mines from the 1930s and high grade drill hits.
Historical surface drilling has struck grades like 2.75m at 19.5% zinc, 1m at 27%, 1.52m at 30.89%, 1.4m at 22.46% and 4.2m at 4.96%. Variscan’s own field work has confirmed this prospectivity, having defined 21 exploration targets across the Udias area with soil sampling in 2020 returning a peak soil result of 16.33% Zn.
As many as 30% of Variscan’s soil samples returned grades of 1% Zn or more with 18% hitting 2% Zn and above.
The next big milestone for Variscan will be receiving assay results from its priority underground drilling at the San Jose Mine, which the company hopes to return ‘as soon as possible’.
A surface drilling campaign is also being planned to test step out extensions in the vicinity of the San Jose mine, which is well placed to emerge as a zinc hub should Variscan define an economic resource.
San Jose is just 30km from the regional capital of Santander and 80km from Glencore’s San Juan de Nieva zinc smelter, one of the world’s largest.
Variscan is also planning to release the results from the geophysical survey over Buenahora, conducted to augment the company’s understanding of planned drill targets and identify new ones among other important data, once they become available.
The survey included resistivity tomography and induced polarisation over 12 lines for a total line length of 17.6km.
A licence renewal is also pending for the Guarajaz project.
This article was developed in collaboration with Variscan Mines, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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