Trading Symbol: TSXV: BMC
Shares Outstanding: 166,283,160
HALIFAX, May 8, 2013 /CNW/ - Buchans Minerals Corporation (TSXV: BMC) ("Buchans Minerals" or the "Company") together with its joint venture
partner, Minco plc ("Minco"), is pleased to announce a National
Instrument 43-101 compliant Inferred Resource for the Plymouth deposit
(located in western New Brunswick) of 43.7 million tonnes grading 9.98% Mn at a 5% Mn cut-off. This Inferred Resource estimate contains
higher-grade shells with lesser tonnages at higher cut-offs that
include 22.5 million tonnes grading 11.86% Mn at a 10% Mn cut-off and 9.1 million tonnes grading 13.19% Mn at a 12% Mn cut-off. The estimate, completed by Mercator Geological
Services of Dartmouth, Nova Scotia ("Mercator"), remains open at depth
and along strike to the north-east and south-west. Completion of this
new resource estimate is considered a significant positive development
by management as it allows the Company to undertake a Preliminary
Economic Assessment ("PEA") to assess the project's potential for
development as an open-pit mine and processing facility.
Warren MacLeod, President & CEO of Buchans Minerals stated that "We are very pleased to have confirmed a significant manganese carbonate
deposit occurring near surface that is amenable to open pit mine
development. Now that we have confirmed an NI 43-101 compliant inferred
resource, coupled with a positive bench scale test program indicating
that the proposed hydrometallurgical process for production of
electrolytic manganese metal ("EMM") from the Plymouth deposit is
considered to be technically feasible, we have achieved our goal of
compiling the information necessary to carry out a PEA. Management
firmly believes that completion of a PEA will allow us to recognize the
potential value of Plymouth as a development project for the benefit of
our shareholders and the people of New Brunswick."
The resource estimate prepared by Mercator is based on a 5% Mn cutoff
value and is presented in Table 1. Table 1 also illustrates sensitivity
of deposit tonnage and grade to higher Mn cut-off values. Total
contained Mn metal at the 5% cutoff value appears in Table 2.
Table 1: Plymouth Mn-Fe Deposit Resource Estimate - May 6th, 2013*.
Mn% Cut-off
|
Resource Category
|
Rounded Tonnes
|
Mn%
|
Fe%
|
5
|
Inferred
|
43,710,000
|
9.98
|
14.29
|
6
|
Inferred
|
41,610,000
|
10.20
|
14.55
|
7
|
Inferred
|
38,260,000
|
10.52
|
14.91
|
8
|
Inferred
|
33,800,000
|
10.92
|
15.36
|
9
|
Inferred
|
28,830,000
|
11.34
|
15.83
|
10
|
Inferred
|
22,460,000
|
11.86
|
16.42
|
11
|
Inferred
|
15,330,000
|
12.49
|
17.12
|
12
|
Inferred
|
9,100,000
|
13.19
|
17.93
|
*Notes:
-
The 5% Mn cut-off value for this resource statement reflects a
reasonable expectation of economic viability for a deposit of this
nature based on market conditions and open pit mining methods.
-
Mineral resources that are not mineral reserves do not have demonstrated
economic viability.
-
This estimate of mineral resources may be materially affected by
environmental permitting, legal, title, taxation, sociopolitical,
marketing, or other relevant issues.
Table 2: Total contained Mn at the 5% Mn Inferred resource statement
cutoff value.
Mn% Cut-off
|
Category
|
Rounded Tonnes
|
Mn%
|
lbs Mn (billions)
|
5
|
Inferred
|
43,710,000
|
9.98
|
9.62
|
Mercator is of the opinion that the resource is open both along strike
and at depth and has potential for further expansion, should additional
step out exploration drilling be undertaken. A 3D oblique image
showing the resource can be viewed at Buchans Minerals' website at: http://www.buchansminerals.com .
Estimation Methodology:
The resource estimate was prepared by Michael Cullen, P.Geo., and Andrew
Hilchey, P.Geo., of Mercator Geological Services Limited of Dartmouth,
Nova Scotia for Buchans Minerals Corporation and Centrerock Mining
Limited (a wholly-owned subsidiary of Minco plc). The estimate was
prepared in accordance with NI 43-101 Standards of Disclosure for Mineral Projects and conforms to the Canadian Institute of Mining, Metallurgy and
Petroleum Definition Standards on Mineral Resources and Mineral
Reserves. Mercator's mineral resource estimate is based on validated
results of 27 diamond drill holes, including 16 surface diamond drill
holes completed in 2013 by Buchans Minerals and Minco, 6 completed by
Buchans Minerals in 2011, and 5 completed in 1987 by Maritime Resource
Research Limited, for a total of 5,973 metres of diamond drilling. Two
trenches completed in 1987 by Maritime Resource Research Limited were
also included and represented as horizontal drill holes. Block modeling
was performed using Gemcom Surpac® 6.4.1 modeling software with
manganese percent, iron percent and specific gravity values
interpolated using inverse distance squared (ID²) methodology and 3 m
down hole assay composites. The resource model was set up with a block
size of 10m * by 10m (y) by 10m (z) and no sub-blocking was allowed.
Metal grade assignment was peripherally constrained by two separate
wire-framed solid models based on sectional geological interpretations
for the Plymouth deposit and a minimum included grade of 5% Mn over 12
down hole metres. The main resource solid measures approximately 700
metres along strike (southwest-northeast), averages approximately 100
metres in width (northwest-southeast), and extends to a maximum depth
of 300 metres below surface. The domain has a folded geometry with near
vertical to steeply dipping eastern and western limbs, with the eastern
limb demonstrating continuity for only 400 metres of strike length from
southwest to the northeast. A second resource solid was developed along
the peripheral limits of the western limb of the main solid to
constrain mineralization showing less continuity and lower average
grades than the main resource solid. The west resource solid measures
approximately 675 metres along strike (southwest-northeast), averages
approximately 40 metres in thickness (northwest-southeast), and extends
to a maximum depth of approximately 200 metres below surface. Both
resource solid models are constrained by a bedrock surface digital
terrain model.
Interpolation ellipsoid ranges and orientations were developed through
assessment of variography combined with geological interpretations and
drill hole spacing. Major axis orientations conform to the strike
direction, between 20° and 30°, and are horizontal. The semi-major axes
occur in the dip direction and perpendicular to the major axes, while
minor axes are oriented at a high angle to stratigraphy in the down
hole direction. Major, semi-major, and minor axis ranges of 150 metres,
125 metres, and 25 metres, respectively, were used for grade and
specific gravity interpolation. At least 3 and a maximum of 6
contributing assay composites, with no more than 3 composites allowed
from a single drill hole, were required to interpolate a valid block
grade. Results from 639 separate laboratory determination of specific
gravity were composited at a 3 metre down hole support length and used
to develop the interpolated specific gravity model using ID²
methodology specified above.
Location & Hydrometallurgy:
The Plymouth deposit is located within Buchans Minerals' Woodstock
property, located 5 kilometres west of the town of Woodstock. The
property is owned 100% by Buchans Minerals through its wholly owned
subsidiary, Canadian Manganese Company Inc. ("Canadian Manganese") and
is subject to an option agreement that grants Minco an option to earn
up to 50% interest in Canadian Manganese Company Inc. The Woodstock
property hosts three deposits of sediment-hosted-manganese-iron
mineralization discovered in 1957 by Strategic Manganese Corporation.
These deposits include the Plymouth deposit as well as two historic
deposits known as the Hartford deposits (North & South) all located 5
kilometres west of the town of Woodstock. The project possesses
excellent infrastructure, including railway lines that extend as close
as 16 km west of the property as well as the TransCanada Highway, which
passes less than 1 km to the south of the property. The property is
situated within the NB Power electrical grid system and transmission of
ample electric power to the site is not expected to be an issue for
this project.
Since 2011, Thibault & Associates Inc. ("Thibault") has been contracted
by Buchans Minerals to conduct bench scale testing for development of a
hydrometallurgical process to produce EMM from the Plymouth deposit.
Composite samples for metallurgical testing were prepared from 2011
drilling program coarse reject material to represent the general
properties of the Plymouth Mn-Fe Deposit. In the first phase of the
test program, process conditions were identified to obtain manganese
extractions in the range of 87.0% to 94.1% from the "bulk composite"
2011 drill core sample using a sulphuric acid leach.
In the second phase of bench scale testing, operating conditions for the
leach were augmented to maintain a high recovery of manganese while
simultaneously optimizing on factors that impact on the economics of
the leaching process such as reagent consumption, pulp density, heating
requirements and residence time. Bench scale testing for operation of
the sulphuric acid leach at the augmented process conditions resulted
in manganese extractions ranging from 85.7% to 88.2% for the "bulk
composite" 2011 drill core sample. Based on the results of the bench
scale test program and mass balance modeling of the proposed
hydrometallurgical process, the overall recovery of manganese in the
hydrometallurgical process is expected to be in the range of 85% to
90%.
Unit operations and process operating conditions for leach solution
purification using commercially proven technologies for precipitation
of iron as goethite and sulphide precipitation of trace heavy metal
impurities have also been identified to produce a purified manganese
sulphate solution that meets target specifications for electrowinning
of manganese based on operating data from commercial EMM operations.
Bench scale test programs completed to date have included testing of
all major unit operations proposed for hydrometallurgical processing of
the Plymouth Fe-Mn Deposit, with the exception of electrowinning, and
the process technology is considered technically viable. Furthermore,
the bench scale test program data compiled to date is considered to be
sufficient to enable completion of a PEA of the deposit. Based on the
results of metallurgical testing completed to date, it has been
recommended that the next phase of process testing be based on the
operation of small scale continuous (or semi-continuous) pilot test
equipment to include operation of an electrowinning cell for production
of EMM to confirm product grade and current efficiency relative to
hydrometallurgical process operating conditions, solution purity and
cell operating parameters.
Positive results have also been obtained from preliminary
pre-concentration studies that assessed High Gradient Magnetic
Separation ("HGMS"), Flotation and Heavy Media Separation ("HMS")
methods as a means of upgrading the run-of-mine mineralized material.
HGMS has been identified as the most favorable preconcentration method
tested to date, and resulted in upgrading of the feed material from
11.4% to 15.6% Mn at 86.7% recovery. In addition to small scale
continuous pilot testing of the hydrometallurgical process proposed for
processing of the run-of-mine Plymouth Fe-Mn mineralized material, it
is further recommended that satellite bench scale studies be conducted
to assess hydrometallurgical processing of mineralized material that
has been pre-concentrated by HGMS.
Understanding Manganese:
When reviewing the global manganese market, it is important to
understand that there are primarily two types of manganese ores; high
grade manganese oxide ores that generally grade 35%-44% Mn and
manganese carbonate ores that typically grade 10%-20% Mn. The Buchans
Minerals' Plymouth deposit is primarily a manganese carbonate deposit.
The important characteristic of these two ore types is that they are
most often used to produce entirely different products. High grade
oxide ores are typically processed by physical concentration techniques
to produce manganese concentrates that grade about 50% Mn. These
concentrates are sold primarily to produce 60-77% silicomanganese and
65-80% ferromanganese for production of flat and long steel.
Carbonate ores on the other hand are typically processed using
hydrometallurgical leaching, purification and electrowinning techniques
to produce high purity >99% EMM which is primarily used in the
production of stainless steel, specialty steels and high purity alloys.
Although it is technically possible to produce EMM from oxide ores, the
process is more complex, has higher capital costs and has higher
operating costs1. About 88% of the world's EMM produced in 2010 originated from
manganese carbonate deposits1.
Chinese manganese carbonate ore production grades averaged about 13.5%
Mn in 2011 and have been falling by approximately 0.5% Mn per year over
the previous ten years2. Given the grades and open pit amenability of the Plymouth deposit and
the relatively low power costs in New Brunswick, it is the objective of
Buchans Minerals to develop an EMM plant which is competitive with
those in China.
1 "Manganese Market Outlook" by the CPM Group, Feb 2012
2 "China Manganese Industry Chain Analysis 2011-2012" by Shanghai Metals
Market, Dec 2011.
Qualified person and sampling procedure:
Michael Cullen, M.Sc., P.Geo., of Mercator Geological Services Limited
is responsible for the resource estimate presented in this news
release. Mr. Cullen is an independent third party, Chief Geologist at
Mercator Geological Services Limited, and a Qualified Person as defined
under National Instrument 43-101 of the Canadian Securities
Administrators. Historical information used in this resource estimation
has been validated and all information obtained from drilling by
Buchans Minerals has followed logging, sampling and assaying procedures
as per the QA/QC protocol described in Buchans Minerals' press release
dated February 14, 2013.
J. Dean Thibault, P.Eng., Senior Process Chemical Engineer and Principal
of Thibault & Associates Inc., of Fredericton, New Brunswick, is acting
as a Qualified Person in compliance with National Instrument 43-101
with respect to the metallurgical bench scale test program information
contained in this release and has reviewed the contents for accuracy.
Paul Moore, M.Sc., P.Geo., Buchans Minerals' Vice President of
Exploration, a Qualified Person within the meaning of National
Instrument 43-101 of the Canadian Securities Administrators, supervised
the 2013 drill program, has reviewed the contents of this release for
accuracy, and is responsible for technical content of this press
release other than the resource estimate and metallurgical test
program.
Minco Option:
Minco has the right to earn up to 50% interest in Canadian Manganese
Company Inc. ("CMC"), a wholly-owned subsidiary of Buchans Minerals
that owns 100% of the Woodstock manganese property. Minco has committed
to earning a 10% interest in CMC by making phase one expenditures of
$1.250 million to fund drilling and resource estimation for an inferred
resource at the Plymouth deposit as well as complete additional
hydrometallurgical test work on the deposit to optimize the flowsheet
to produce high-grade electrolytic manganese metal ("EMM").
Following this initial commitment, Minco will have 30 days to elect to
continue with further expenditures of $750,000 over a period of six
months (phase two expenditures) to complete a preliminary economic
assessment ("PEA") on the Plymouth deposit to earn a further 10%
interest in CMC. If Minco elects not to proceed with the second phase
of expenditures, Buchans will have a 90-day option to buy back Minco's
10% interest in CMC for $1.250 million.
Upon completion of the PEA, Minco will have an exclusive 3-month option
to elect to earn a further 30% interest in CMC by completing an NI
43-101 compliant pre-feasibility report on the Plymouth deposit within
two years (the budget to be determined at that time). Buchans Minerals
will be the operator for all work programs performed under the option
agreement with Minco.
Subsequent to the Company's news release of April 30th, 2013, the Company has signed a binding agreement with Minco to
complete a business combination by way of a court-approved plan of
arrangement. In the event Buchans Minerals shareholders vote in favour
of the arrangement then Minco will control 100% of CMC and the
above-mentioned option will no longer apply.
About Buchans Minerals:
Buchans Minerals is an Atlantic Canada-based resource company that has
three main assets that include its 100% owned base metal properties
near Buchans in Central Newfoundland (optioned to Minco plc), its 100%
owned manganese property located near Woodstock (optioned to Minco) in
New Brunswick, and its 50% owned gold & copper Long Range property in
central Newfoundland.
Forward Looking Statements & Disclaimer:
Information set forth in this news release may involve forward-looking
statements under applicable securities laws. Forward-looking statements
are statements that relate to future, not past, events. In this
context, forward-looking statements often address expected future
business and financial performance, and often contain words such as
"anticipate", "believe", "plan", "estimate", "expect", and "intend",
statements that an action or event "may", "might", "could", "should",
or "will" be taken or occur, or other similar expressions. All
statements, other than statements of historical fact, included herein
including, without limitation; statements about the potential of the
Buchans Minerals projects, are forward-looking statements. By their
nature, forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or other future events, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors
include, among others, the following risks: the need for additional
financing; operational risks associated with mineral exploration;
fluctuations in commodity prices; title matters; environmental
liability claims and insurance; reliance on key personnel; the
potential for conflicts of interest among certain officers, directors
or promoters with certain other projects; the absence of dividends;
competition; dilution; the volatility of our common share price and
volume and the additional risks identified the management discussion
and analysis section of our interim and most recent annual financial
statement or other reports and filings with the TSX Venture Exchange
(the "Exchange") and applicable Canadian securities regulations.
Forward-looking statements are made based on management's beliefs,
estimates and opinions on the date that statements are made and Buchans
Minerals undertakes no obligation to update forward-looking statements
if these beliefs, estimates and opinions or other circumstances should
change, except as required by applicable securities laws. Investors are
cautioned against attributing undue certainty to forward-looking
statements.
Neither the Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the Exchange) accepts responsibility for
the adequacy or accuracy of this release, and no securities regulatory
authority has either approved or disapproved of the contents of this
release.
SOURCE: BUCHANS MINERALS CORP.