VANCOUVER, Aug. 27, 2019 /CNW/ - Rathdowney Resources Ltd.
("Rathdowney" or the "Company") (TSX‐V: RTH) is pleased to provide
an update on its 100%-owned Olza zinc-lead-silver project ("Project
Olza") in Poland. The Company is
actively engaged in a two-year plan to secure a Mining License for
the project.
Project Description
Project Olza is located in the Upper Silesian Mining District of
southwestern Poland, a region of
Mississippi Valley-type zinc-lead ("MVT") deposits that are
world-class in terms of size, with a demonstrated history of
long-life mines such as Pomorzany and Olkusz. The Pomorzany
zinc-lead mine, for example, has produced +90 Mt of zinc-lead ore
over the past 40 years1.
Mineralization at Project Olza occurs along a corridor with a
total strike length of approximately 10 km and width up to 1 km.
Stratabound mineralized zones, averaging 3
m thick, are mainly hosted by a flat-lying dolomitic unit
occurring 100 to 250 m below surface.
Olza, like other MVT deposits are well-understood and boast simple
metallurgy, and Rathdowney's engineering work confirms that
conventional mining and mineral processing techniques can be
applied. Olza will be mined by standard room and pillar
methods and processed using conventional crushing, grinding and
flotation. The straight forward metallurgy will produce high-grade,
low-iron, highly marketable concentrates that can be transported by
existing road and rail infrastructure to a local smelter or via
ports to smelters throughout Europe.
PEA at 5% Discount Rate
The Project Olza Preliminary Economic Assessment ("PEA")
forecasts strong potential financial returns for a 6,000 tonnes per
day ("tpd") underground mine with on-site processing facility (see
news release dated April 20,
2015)2. The December
2014 PEA calculated the Net Present Value ("NPV") of Project
Olza using an 8% discount rate. Based on the Project
Description above, management believes that the numerous positive
attributes of Olza make a 5% discount rate to also be of interest,
and allows for Olza to be compared with other similar development
projects around the world at the same discount rates.
- At an 8% discount rate, the after-tax NPV is US$170 million.
- At a 5% discount, Project Olza's after-tax NPV increases to
US$219 million3.
Moreover, the PEA forecasts US$125
million pre-tax, free cash flow from initial operations on
an annual basis, some US$375 million
on a cumulative basis for the first three years of operation.
This is uniquely high when compared to other zinc "development"
projects world-wide.
"The cash flow projections for Project Olza stand out when
compared to other advanced stage projects globally. These very high
cash flows are the economic driver that will propel Project Olza
into future operation," said President and CEO
Dick Whittington. "Project Olza's
favourable deposit characteristics, its strategic location and the
exceptional infrastructure already in place will support the
development of a robust mine that can contribute to the economy in
southwestern Poland over the long
term."
The Preliminary Economic Assessment is preliminary in nature and
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. There is no certainty that the PEA will be realized;
however, it does highlight the economic potential of the inferred
resources if developed in line with the development plan outlined
in the PEA.
Progress Toward Mine Licensing
Since the release of the positive results from the PEA, the
Company has completed extensive environmental baseline surveys, and
conducted land use planning, geotechnical and further engineering
studies to prepare for the environmental assessment and mine
permitting processes in Poland. Permitting in Poland is a systematic process that involves
land use review and designation, environmental investigations and
mining planning, all supported by a detailed process of
documentation of the work that has been done.
In July 2019, the Company received
approval from the Polish government for an extensive "annex" to our
Geological Documentation providing updated information as per
Polish regulatory requirements. Rathdowney's technical team has
compiled and assessed information from some 160,000 m of historical drilling as well as the
results of its own exploration, core drilling, engineering and
environmental programs since 2011.
Dick Whittington acknowledged
both the technical team and the agencies in Poland and their work together to advance this
process, saying "I would like to commend our on-site team for
the excellent - and exhaustive – work done to put this application
together and to thank the authorities that worked with us, for
their efficient and expeditious handling of our
application."
This marks the successful completion of the second required
phase of detailed geological documentation that is part of the
mineral development process in Poland. It demonstrates the
ability of Rathdowney's technical and permitting teams to work
effectively with Polish government agencies, and underpins the
Company's efforts toward obtaining a mining license over the next
two years.
Focus Now on Zawiercie and Rokitno Concessions
As a result of this work and a comprehensive review of the
Company's mine development strategy, the Company also decided to
divest the Chechlo concession, reducing the land package to 100
square km which comprises the highly prospective Zawiercie and
Rokitno mineral concessions. These concessions formed the basis of
the PEA, and the Company believes they are more than sufficient to
support the Olza project over the long term. Additionally, as part
of this review, the scope of the operation (6,000 tpd, room and
pillar mining, etc) as outlined in the PEA will not change. As
such, the anticipated scope of the operations for any future
feasibility study will remain unchanged from the PEA.
Exceptional Infrastructure and Resource Potential
Situated in the heart of Europe, Project Olza has easy access to
smelters and markets for its zinc and lead products. Also,
owing to its location in a region with a long and prosperous mining
history, development and production will benefit from a
locally-based, skilled workforce and access by paved roads within a
one-hour drive from Krakow and Katowice, two major cities with full services
and international airports. Power lines with sufficient power
to supply the project are adjacent to the site and local
communities have more than sufficient housing to cater to both
temporary construction workforce requirements (eliminating the need
for fly-in fly-out facilities) and long-term employee needs.
All these characteristics will support efficient development of a
mine at Olza.
Deposits of zinc and lead were identified in the immediate area
of Project Olza through core drilling by Polish State companies in
the 1950s to 1980s, with historical estimates indicating the
potential for significant zinc-lead resources. Rathdowney has
conducted confirmatory core drilling over a portion - about 30% -
of the historical core drilling-area, and completed resource
studies, metallurgical testing and other engineering work.
Current inferred resources (in the 30% area described above) are 24
million tonnes at a grade of 7.02% (zinc plus
lead)4. As only 30% of the area of historical core
drilling at Project Olza has been tested by Rathdowney's
confirmatory core drilling program, the opportunities to increase
the mineral resources and support a long life mine at Project Olza
are excellent.
An Exploration Target Range study in 2019 further assessed the
potential in the remaining 70% of the area of the historical
drilling but outside of the area of Rathdowney's current mineral
resource. Using geostatistical conditional simulation, the study
outlined an Exploration Target Range (as defined under 43-101) of
54–92 million tonnes at grades of 3.9-5.2% zinc and 1.0-1.3%
lead5. This Exploration Target Range is conceptual in
nature and is not a mineral resource estimate. While there is no
guarantee additional drilling will lead to a resource estimate in
this range, the Exploration Target illustrates the excellent
remaining potential of the Olza property.
Rathdowney is committed to responsible mineral exploration and
development. Our local Project Olza community team is
actively engaged with local communities and governments at all
levels regarding project activities and plans.
The technical disclosure in this release has been reviewed and
approved by Qualified Person ("QP") David
Copeland, PEng, who, as Rathdowney's Chairman and a
director, is not independent of the Company.
On behalf of the Board of Directors
J.R.H (Dick) Whittington
President & CEO
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, that address exploration
drilling, exploitation activities and events or developments that
the Company expects, are forward looking statements. Although the
Company believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Assumptions used by the Company to
develop forward-looking statements include the following: Project
Olza will obtain all required environmental and other permits and
all land use and other licenses, studies and development of Project
Olza will continue to be positive, and no geological or technical
problems will occur. Factors that could cause actual results to
differ materially from those in forward-looking statements include
market prices, exploitation and exploration successes, continuity
of mineralization, potential environmental issues and liabilities
associated with exploration, development and mining activities,
uncertainties related to the ability to obtain necessary permits,
licenses and title and delays due to third party opposition,
changes in government policies regarding mining and natural
resource exploration and exploitation, continued availability of
capital and financing, and general economic, market or business
conditions. Investors are cautioned that any such statements are
not guarantees of future performance and actual results or
developments may differ materially from those projected in the
forward-looking statements. For more information on the Company,
investors should review the Company's continuous disclosure filings
that are available at www.sedar.com.
________________________________
|
1
www.geoportal.pl
|
2 Base Case metal prices use: Zinc -
US$1.10/lb in yrs 1-2, US$1.00/lb in remaining Life of Mine
("LOM"); Lead - US$1.09/lb in yr 1, US$1.00/lb in yr 2, US$0.95/lb
in remaining LOM. Assumptions are based the median price forecast
by >30 independent banks and investment dealers specialized in
commodity market analysis. For further details, see the PEA
technical report posted on Rathdowney's website and at
www.sedar.com.
|
3 Bray, Chris, SRK Consulting (UK)
Ltd, July 2019 Memo on Discount Rate for Olza PEA (effective date
31 December 2014)
|
4
Individual metal grades are 5.53% Zn and 1.49% Pb. At 2% Zn
cut-off, as audited and verified and restated at February 2015 by
independent QP - L. Roberts, MAusIMM (CP), SRK Consulting (UK) Ltd.
Mineral Resources that are not mineral reserves do not have
demonstrated economic viability.
|
5 Olza
Project Exploration Target Range (ETR) Study, unpublished
internal report, by R. Mohan Srivastava and David Gaunt
(2019). Mr. Gaunt is a QP that is not independent of the
Company and Mr. Srivastava is an independent QP. The
exploration target area of interest is inside the Zawiercie and
Rokitno concessions and substantially overlaps the area of
historical estimates but excludes the footprint of the current
mineral resource and a buffer zone surrounding it. The exploration
target ranges (ETR) of tonnages and grades were derived by
completing a series of 100 equally plausible conditional
simulations. A histogram of the tonnage and grade values from these
simulations was completed, and the 10th and 90th percentile
selected as the ETR bounds.
|
SOURCE Rathdowney Resources Ltd.