Quarterly Report - June 2016
ASX Code: VAR
ACN: 003 254 395
Issued Shares: 519M Listed Options: 131M Unlisted Options: 57M VAR Cash Balance: $2.45M VAR Investments: $1.5M
Directors Pat Elliott Greg Jones Jack Testard
Kwan Chee Seng Dr Foo Fatt Kah Michael Moore
Top Shareholders Kwan Chee Seng Acorn Capital
Chris and Betsy Carr Dr Foo Fatt Kah
Top 20 Shareholders - 70.6%
Head Office
Variscan Mines Limited Level 1, 80 Chandos Street St Leonards NSW 2065
Postal
PO Box 956
Crows Nest NSW 1585
T +61 (0)2 9906 5220
F +61 (0)2 9906 5233
E [email protected]
www.variscan.com.au
Highlights
Merléac Zinc Project
Mineral Resource estimate for the high-grade Porte-aux-Moines (PAM) zinc-lead-copper-silver-gold deposit within the Merléac exploration licence completed.
Total Indicated and Inferred Mineral Resource of 2.2 million tonnes grading 6.0% zinc, 1.3% lead, 0.8% copper, 80.6 g/t silver and 0.9 g/t gold.
Deposit is within the top grade quartile of zinc deposits world-wide on a zinc equivalent percentage basis indicating good potential for economic extraction provided sufficient tonnage can be defined.
Potential to expand the resource is apparent, notably within the hanging-wall zones at depth and to the west, where previous work indicated the possible continuation of the mineralised system.
Diamond drilling is planned to commence shortly once approvals have been obtained to infill thick, high grade Main Zone mineralisation to confirm geological interpretation and increase tonnages of the Indicated Mineral Resource.
The PAM deposit is part of a highly prospective 15 kilometre long trend containing at least four additional centres of VMS mineralisation which may contain new high grade deposits.
St Pierre Gold Project
Work continues for the commencement of drilling to test the Ville Tirard and Belleville gold targets.
Drilling at Belleville will test zone where sampling has recorded up to 21.5g/t gold in float and 2.4g/t gold in soils.
Drilling is anticipated to start this quarter with 1300 meters planned.
Corporate
The Company successfully completed a placement and fully subscribed share rights issue, raising $2.5 million before costs to progress its exploration in France, primarily at Porte-aux-Moines and St Pierre.
At the end of the quarter, Variscan held $2.45 million in cash. Liquid investments held in ASX resource companies totalled approximately
$1.5 million.
Exploration
FRANCE
MERLÉAC
During the quarter a maiden Mineral Resource estimate was completed to JORC 2012 reporting standards for the zinc-rich Porte-aux-Moines (PAM) volcanogenic massive sulphide (VMS) deposit within the Merléac exploration licence (see ASX announcement released 20 June 2016 for more details and JORC Table 1).
The Mineral Resource is 2.2 million tonnes grading 6.0% zinc, 1.3% lead, 0.8% copper, 80.6 g/t silver and 0.9 g/t gold (Table A). This places the deposit within the first grade quartile for zinc-rich deposits worldwide (Figure 1), indicating good potential for economic extraction provided sufficient tonnage can be defined.
Table A: Porte-aux-Moines Mineral Resource as at 31 May 2016
|
Tonnes
|
Zinc %
|
Lead %
|
Copper %
|
Silver g/t
|
Gold g/t
|
|
INDICATED
|
|
Main
|
291,000
|
6.1
|
1.2
|
0.8
|
76.5
|
0.9
|
|
HW1
|
-
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
HW2
|
-
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
Total
|
291,000
|
6.1
|
1.2
|
0.8
|
76.5
|
0.9
|
|
INFERRED
|
|
Main
|
1,505,000
|
6.1
|
1.3
|
0.9
|
86.0
|
0.9
|
|
HW1
|
361,000
|
5.1
|
1.3
|
0.3
|
61.3
|
0.8
|
|
HW2
|
44,000
|
5.4
|
2.0
|
0.1
|
82.3
|
0.0
|
|
Total
|
1,910,000
|
5.9
|
1.3
|
0.8
|
81.2
|
0.9
|
|
TOTAL
|
|
Main
|
1,796,000
|
6.1
|
1.3
|
0.9
|
84.4
|
0.9
|
|
HW1
|
361,000
|
5.1
|
1.2
|
0.3
|
61.3
|
0.8
|
|
HW2
|
44,000
|
5.4
|
2.0
|
0.1
|
82.3
|
0.0
|
|
Total
|
2,201,000
|
6.0
|
1.3
|
0.8
|
80.6
|
0.9
|
Note: Mineral Resource is based on a zinc cut-off of 8.0% Zn Eq. Calculations have been rounded to the nearest 1000 t, 0.1 % zinc, lead and copper grade, 0.1 g/t gold and silver grade.
The Mineral Resource estimate was completed by QG Australia Pty Ltd, an independent consultancy group that specialises in resource estimation for deposits like PAM, from mineralisation domains and wireframes supplied by Variscan geologists. The geological model and Mineral Resource estimate were based on 58 surface and underground diamond drill holes, mapping and assays from underground development to the -150 metre level as well as data from a number of shallow percussion drill holes completed by the BRGM (Bureau de Recherches Géologiques et Minières - the French geological survey).
Data density for the deposit is variable with drilling completed on nominal 100 metre centres in the upper parts of PAM, down to 20 metre spacings (or less) in areas of combined underground development and drilling (see Figure 2 long section).
As noted within earlier ASX announcements (19 May, 20 and 29 July 2015), resampling of mineralised zones by Variscan from the three remaining surface diamond holes gave confirmation of the quality and accuracy of the assaying work completed by the BRGM during its exploration of the deposit from 1976 to 1985. This provided strong confidence for the veracity of the assays in the remaining drill holes and underground development for use in the calculation of the resource to JORC reporting standards.
Figure 1: Global ranking of projects and mines by grade and size compared to the mineral resources of about 300 zinc and polymetallic mines and projects worldwide. The zinc equivalent grade calculation represents the value for each metal - Zn (US$1,800 per tonne), Pb (US$1,800 per tonne), Cu (US$5,600 per tonne), Ag (US$15 per ounce) and Au (US$1,150 per ounce) - multiplied by the grade and estimated recoveries (Zn-90%, Pb-85%, Cu-80%, Ag-60%, Au-70%), summed and expressed in equivalent zinc percent per tonne. The zinc equivalent calculation is intended as an indicative value only. Source: Terra Studio
Geology
The mineralisation at PAM is volcanogenic massive sulphide style (VMS) and is broadly contained within a sequence of sediments and volcanics. Mineralisation occurs as multiple, disrupted sulphide lenses, mainly hosted by black shales and cherts. Massive sulphides are very pyritic, with three main zones of mineralisation modelled to date from the BRGM data.
Main Zone: This is the lowest stratigraphic horizon and is generally located at the interface between the volcanics and overlying host sediments, but is currently modelled to migrate into a more hanging-wall position to the east. It contains the bulk of the resource (82% - Table A). The Main Zone can be subdivided into a thick zone of high grade mineralisation that appears to have been deposited on the sea floor within a shallow depression, and thinner flanking mineralisation lateral to the thickened zone (Figures 2 and 3).
The thick (estimated at about 16.3 metres true width) pod of mineralisation is estimated to contain approximately 1.1 million tonnes of higher grade material (Table B).
Table B: Main Zone Mineral Resource
|
Tonnes
|
Zinc %
|
Lead %
|
Copper %
|
Silver g/t
|
Gold g/t
|
|
Main Zone
|
|
MZ Thick MZ Flank
|
1,118,000
677,000
|
6.9
4.9
|
1.4
1.0
|
0.9
0.9
|
89.8
75.6
|
0.9
0.9
|
|
Total
|
1,795,000
|
6.1
|
1.3
|
0.9
|
84.5
|
0.9
|
Figure 2: Vertical long section of the Main Zone surface at PAM showing the interpreted thickened zone and flanking mineralisation. Proposed deeper drilling pierce points shown as well as the target area for shallow drilling (hatched)