Buchans & Minco announce that drilling has started at the
Woodstock managnese project in New Brunswick, Canada
Trading Symbol: TSXV: BMC
Shares Outstanding: 166,283,160
WINDSOR, NS,
Jan. 21, 2013 /CNW/ - Buchans
Minerals Corporation (TSXV: BMC) ("Buchans Minerals" or the
"Company"), and Minco plc (AIM Market: MIO) ("Minco")
are pleased to announce that drilling has begun on the Woodstock manganese project located in
New Brunswick, Canada.
Drilling is expected to take 6 to 8 weeks to complete and will
include 14 to 18 holes totaling between 3,700 and 4,350 metres of
drilling. Assays are expected to be released as they are received
and a map showing the location of the proposed holes relative to
the historic resource is available on Buchans Minerals' website at
http://www.buchansminerals.com/.
Warren MacLeod,
President & CEO of Buchans Minerals stated that "Buchans
Minerals is very pleased to launch the drilling program on the
Plymouth deposit with the goal of
upgrading as much of the historical resource as possible into an NI
43-101 compliant inferred resource. An inferred resource will
compliment the extensive hydrometallurgical test work and economic
modeling accomplished to date and sets the foundation upon which
the project is able to proceed towards a preliminary economic
assessment ("PEA") on the Plymouth
deposit."
Plymouth Historic Resource:
The historic resource estimate for the
Plymouth deposit is comprised of a
non NI-43-101 compliant, historic, uncategorized resource estimate
totaling 151.2 million tons (46.5 million tonnes)
averaging 10.9% Mn (manganese) and 13.3% Fe (iron). This
historic resource was compiled by Strategic Manganese Corporation
in 1957 and is reported to include mineralization extending from
surface to depths of at least 500 feet (152 metres). The quoted
historical resource estimate for the Plymouth deposit is based on data obtained and
prepared by previous operators and neither Buchans Minerals nor Minco has located
original assay sheets or details of the estimation methodology
completed, nor has Buchans Minerals or Minco undertaken the work
necessary to verify or classify the mineral resource estimate.
Neither Buchans Minerals nor Minco is treating the mineral
resource estimate as a NI 43-101 defined resource verified by a
qualified person, and the estimate should not be relied
upon. Verification and classification of the resource
will require considerable further evaluation.
The Minco Option Agreement:
Under the terms of the option agreement Minco
has the right to earn up to a 50% interest in the Canadian
Manganese Company Inc. ("CMC"), a wholly owned subsidiary of
Buchans Minerals that owns 100% of the Woodstock manganese property. Minco will
initially make a firm commitment to earn a 10% interest in CMC by
spending phase one expenditures of $1.250
million that will include drilling an inferred resource on
the Plymouth and additional
hydrometallurgical test work seeking to optimize the flowsheet to
produce high grade electrolytic manganese metal (EMM).
Following its initial firm expenditure
commitment, Minco will have 30 days to elect to continue with
further expenditures of $750,000 over
a period of six months (second phase 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
back 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.
Opportunity for new Electrolytic Manganese
Metal ("EMM") Producers:
Buchans Minerals is currently evaluating the
continued development of its Plymouth manganese deposit with a view to
develop an EMM and/or electrolytic manganese dioxide (EMD)
production facility with production capacity of either 50,000 TPY
or 100,000 TPY of EMM. It is the Company's goal to develop a
project with a long mine life and a target operating cost below the
$0.84 / lb mark identified in the
latest Shanghai Metals Market EMM report as the current lowest
operating cost by an EMM producer (Ningxia Tianyuan Manganese
Limited Company).
China produces
over 97% of the world's Electrolytic Manganese Metal
("EMM")3, but its industry is highly fragmented with
high operating costs, increasing electrical tariffs, increasing
labour rates, depleting resources and grades, reducing capacity,
relatively higher inflation and tightening environmental
regulations. China has 188 EMM
plants with average production capacity of only 7,000 tonnes per
year ("TPY")2 and operating costs that range between
$0.84/ lb to $1.06/ lb 4.
In addition to forecast growth in the EMM
industry by CPM Group from the current 1.532 million TPY in 2011 to
2,839 million TPY in 20213, the Chinese government have
committed in their 12th five year plan to close down all
their small inefficient EMM plants and are anticipated to be
reducing their total EMM production capacity and eliminating the
small and in-efficient producers2. When reviewing the
above increase in future EMM demand in comparison to the
significant forecast reduction in Chinese EMM capacity, a scenario
may arise whereby Chinese EMM production may not be able to cover
the existing world EMM demand, let alone the anticipated increasing
demand in years to come.
Warren MacLeod,
President & CEO of Buchans Minerals stated that "When
viewing the Buchans Minerals Woodstock Manganese project in
relation to the EMM market as a whole, the key differentiating
factors that we will be aiming to achieve will be a long mine life
coupled with a target operating cost below the $0.84 / lbs mark identified in the latest
Shanghai Metals Market EMM report as the current lowest operating
cost by an EMM producer (Ningxia Tianyuan Manganese Limited
Company). 4"
Understanding Manganese:
When reviewing the global manganese market, it
is important to understand that there are primarily two types of
manganese ores; manganese oxide ores that generally grade 35%-44%
Mn and manganese carbonate ores that grade 10%-20% Mn. The Buchans
Minerals Plymouth deposit is primarily a manganese carbonate
deposit with an average grade of about 11%.
The important characteristic of these two
different ores is that they produce entirely different products.
Oxide ores are 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 processed
using hydrometallurgical leaching and electrowinning techniques to
produce high purity > 99% electrolytic manganese metal (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 and EMD from oxide ores, the process is more complex, has
higher capital costs than to process manganese carbonate ores and
has higher operating costs3. Manganese carbonate
deposits utilize less complex hydrometallurgy with a single stage
acid leach to produce EMM and EMD. About 88% of the world's EMM
produced in 2010 originating from manganese carbonate
deposits3.
Qualified Persons:
Paul Moore, MSc,
P.Geo., (NL), Vice-President Exploration for Buchans Minerals Corporation, is acting as a
Qualified Person in compliance with National Instrument 43-101 with
respect to the geological technical information contained in this
release and has reviewed and approved those contents for accuracy.
Quoted historical resource estimates for the
1Plymouth deposit are
based on data obtained and prepared by previous operators and
Buchans Minerals has not located original assay sheets or details
of the estimation methodology completed, nor has Buchans Minerals undertaken the work necessary
to verify or classify the mineral resource estimate. Buchans
Minerals is not treating the mineral resource estimate as a
NI 43-101 defined resource verified by a qualified person, and the
estimate should not be relied upon. Verification and
classification of the resource will require considerable further
evaluation.
References:
1 Historic resource estimate from an
article written by K.O.J. Sidwell,
1957: The Woodstock, N.B.,
Iron-Manganese Deposits. Transactions of the Canadian Institute of
Mining and Metallurgy, Volume LX, 1957, p.231-236. The article
reports the resource is compiled from data acquired from a total of
17,388 feet (5,300 metres) of drilling
2 "A study of Electrolytic Manganese
Metal (EMM) Industry and China's
Dominating Effects to the Global Market" by JF Zhang Associates,
Nov 2011
3 "Manganese Market Outlook" by the
CPM Group, Feb 2012
4 "Shanghai Metals Market report on
China EMM Industrial Chain 2012-2013, Dec
2012
About Minco plc
Minco plc, registered in the Republic of Ireland and listed on the AIM
Market of the London Stock Exchange (AIM: MIO) is involved in
exploration and development activities in Canada at its Buchans, zinc-copper-lead-silver, volcanogenic
massive sulphide ("VMS") properties under joint venture with
Buchans Minerals Corporation, and indirectly in exploring and
developing silver-zinc properties in Central Mexico through its 29% shareholding in
Xtierra Inc., a company listed on the TSX Venture Exchange.
Minco holds 30 million shares (approximately
29%) in Xtierra Inc. listed on the TSX Venture Exchange (TSX.V:
XAG). Minco also holds 15 million shares (approximately 10%)
in Buchans Minerals listed on the TSX Venture Exchange (TSX.V:
BMC).
Minco currently holds approximately US$15 million in cash and is also evaluating a
number of other investment opportunities in the minerals industry
in North America and Europe.
For further information of Minco refer to
Minco's website at www.minco.ie.
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 TSXV 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.
This release contains market and industry data
and statements that have been obtained from independent third-party
sources, including the February 2012
report prepared by the CPM Group and the November 2011 study of Electrolytic Manganese
Metal Industry and China's
Dominating Effects to the Global Market by JF Zhang Associates.
While Buchans believes the data
and statements derived from these sources to be reliable,
Buchans has not independently
verified such data and statements. Buchans cannot guarantee the accuracy or
completeness of the market and industry data and statements
contained in this release and does not independently endorse such
data or statements. As a result, undue reliance should not be
placed on the market and industry data and statements in this
release.
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.