VANCOUVER, May 1, 2020 /CNW/ - Rathdowney Resources
Ltd. ("Rathdowney" or the "Company") (TSX‐V: RTH) announces that it
has closed the first tranche of the unit private placement (the
"Private Placement") announced previously on April 21, 2020, consisting of 13,402,491 Units
issued for gross proceeds of CAD $1,206,224.
Each Unit is comprised of one common share (a "Share") of
the Company plus one common share purchase warrant (a
"Warrant"). Each Warrant can be exercised for a five year
period from the Closing Date (as hereinafter defined) at
$0.11 per Warrant Share (as
hereinafter defined). In the event that the closing price of the
common shares of the Company is at or above $0.15 per share for a period of 10 consecutive
trading days during the warrant exercise period (with the
10th such trading day hereafter referred to as the
"Eligible Acceleration Date"), the warrant expiry date shall
accelerate to the date that is 60 days after the Eligible
Acceleration Date.
The securities issued pursuant the Private Placement will be
subject to applicable resale restrictions, including a four month
hold period from date of closing of the Private Placement under
applicable Canadian securities laws. Completion of the private
placement is subject to regulatory approval, including approval of
the TSX Venture Exchange.
Proceeds will be used to advance permitting and engineering
activities in Poland on the
Company's Olza zinc-lead-silver project ("Project Olza") towards
the final submission for its Polish Mining License, as well as for
general corporate working capital purposes.
About Rathdowney and Project Olza
Project Olza is located in the Upper Silesian Mining District of
southwestern Poland, a world-class
region of Mississippi Valley-type deposits with well-developed
mining infrastructure. Easily accessible by road, railway,
power, and a skilled workforce, the Olza project site is a one-hour
drive from Krakow, a major city with full services, including an
international airport. The deposits at Olza are 25 km from
the ZGHB zinc smelter at Boleslaw. A railway line runs through the
Olza project-area, linking it to the local facilities and also to
other smelters through the port of Gdansk on the Baltic
Sea.
Initial drilling by Rathdowney over approximately 30% of the
area of extensive drilling by the Polish Geological Survey,
resulted in the estimation of 24.4 million tonnes of inferred
mineral resources grading 7.02% combined zinc and lead1,
with excellent potential for expansion. Polish Geological Survey
drilling delineated a historical resource of 77 million tonnes
grading 6.15% Zn+Pb in C1/C2 categories that are similar to the
Soviet Classification2. A qualified person, under
NI43-101 rules, has not done sufficient work to classify this
historical estimate as current mineral resources and the Company is
not treating them as current.
A Preliminary Economic Assessment ("PEA") announced in early
2015 based on the 24.4 million tonne resource, indicates strong
potential financial returns for a 6,000 tpd underground operation
and conventional treatment facility, producing two marketable
concentrates3. The project has a post-tax net
present value ("NPV") of US$219
million at 5% discount4, and US$170 million NPV at 8% discount. Free cash flow
in the first three years of full production averages US$125 million per year (cumulatively
US$375 million), ample for debt
financing and near term project payback.
The PEA 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.
David J. Copeland, P.Eng.,
President and CEO of Rathdowney and a qualified person as
defined under NI43-101, has reviewed the technical information in
this release.
On behalf of the Board of Directors
David J. Copeland,
P.Eng.
President and 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: the Olza
project will obtain all required environmental and other permits
and all land use and other licenses, studies and development of the
Olza project 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, as well as risks relating to the
uncertainties with respect to the effects of COVID-19. 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
Estimated at a 2.0% zinc cutoff; individual grades are 5.53% zinc
and 1.49% lead. Mineral resources that are not mineral
reserves do not have demonstrated economic viability.
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2
Historical estimate by Polish State Geological Institute PSGI 1992
report. These are different from the classification system of NI
43-101.
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3 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 on the median price
forecast by >30 independent banks and investment dealers
specialized in commodity market analysis. For additional details on
the PEA, see Rathdowney's news release dated April 20,
2015.
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4 Bray, Chris, SRK Consulting (UK)
Ltd, July 2019 Memo on Discount Rate for Olza PEA (effective date
31 December 2014).
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SOURCE Rathdowney Resources Ltd.