Variscan Mines – Increases Contained Zinc by 164%

Variscan Mines Limited (ASX: VAR) has increased the size of its contained zinc in its total resource estimate at the Novales-Udias Zinc Project, located in Spain, by 164%.

The Novales-Udias Zinc Project

The Novales-Udias Zinc Project is located in the Basque-Cantabrian Basin, 30 km southwest of the regional capital, Santander. The project contains the San Jose Zinc Mine, which was operational in the 1990s, the Udias Zinc Mine Complex, and numerous other old mines and workings throughout the 12 km-long Novales-Udias Zinc Trend (Figure 1).

Figure 1: Location of the Novales-Udias Project

Source: Variscan Mines

Novales-Udias is a Mississippi Valley-Type (MVT) zinc-lead deposit that occurs as sub-horizontal lenses controlled by steeply dipping fault zones within dolomitic host rocks. The project benefits from extensive existing infrastructure including the underground workings that allow direct access to two of the deposits, road access, near mine grid power, and in addition, it is located just 145km by direct highway, southwest of the world's second-largest zinc smelter, the San Juan de Neiva Zinc Smelter, operated by Glencore.

Variscan has focused its initial exploration within the northern section of the San Jose permit, in a 4.5km section of the 12 km-long Novales-Udias Zinc Trend (Figure 2). Drilling has concentrated on three deposits, the San Jose Deposit in the centre, to the northeast the NE San Jose Deposit and to the southwest NE Udias Deposit (Figure 2).

Figure 2: Novales-Udias Mineral Resources Estimate

Source: Variscan Mines

From these three deposits, Variscan has defined a total JORC 2012 compliant mineral resource estimate of 3.4 million tonnes (Mt) at an average grade of 7.6% zinc and 0.9% lead, of which 67% is contained within the measured and indicated categories at the San Jose Mine.

Two of these deposits, San Jose and NE Udias, can be assessed from the existing mine development, while the NE San Jose Deposit is located a short distance from the decline, and could be accessed with additional mine development (Figure 2).

Variscan has already defined additional near-mine targets that have been drill-tested but do not yet have enough drilling to be converted into a mineral resource, shown in green in Figure 2. Additional drilling at these targets should result in resource growth in future resource upgrades.

While San Jose is currently the largest of the three defined orebodies, the old Udias Mine, which lies outside the resource base (Figure 3), has the potential to be an order of magnitude larger, with mineralisation demonstrated over a 2.2km strike length.

Figure 3: Exploration Targets at the Udias Mine

Source: Variscan Mines

Sulphide zinc-lead mineralisation at Udias was never mined, despite the large volume of underground mine development, due to a lack of suitable processing technology. Instead, historic mining extracted zinc calamine (smithsonite or hemimorphite), which are zinc carbonates and silicates, leaving behind the zinc sulphate.

Variscan has already commenced drilling at the Udias Mine Target and expects to report assay results from this programme in early 2025, with a second resource update to follow in mid-2025.

While Variscan is focused on the near-mine exploration targets at present due to its commitment to restating mining in the near term, around 60% of the 12 km-long Novales-Udias Zinc Trend has yet to be explored, with the existing mineralisation open along strike to the northeast and southwest. Further, Variscan licences cover an area of over 100 km2 and contain numerous regional zinc occurrences and historic workings.

Variscan has commenced the mine re-start study, which is expected to be a scoping study-level report that assesses the potential economics of restarting mining at the Novales-Udias Project. This is targeted for completion around mid-2025.

The near-surface location, extensive mine development, and high-grade nature of the zinc mineralisation at the Novales-Udias Project make it an attractive zinc project, with near-term production potential. The current share price offers a very attractive value opportunity and trades at a discounted EV/Resource to comparable peers.

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