Buchans Resources Limited (the “Company” or “Buchans”), a Canadian mineral exploration and development company, reports its financial results and results of operations for the year ended December 31, 2023.
This news release should be read in conjunction with the Company’s audited consolidated financial statements and the associated management’s discussion and analysis (MD&A) for the year ended December 31, 2023 which are available on the Company’s website at www.BuchansResources.com or under the Company’s profile at www.sedarplus.ca.
FINANCIAL RESULTS
For the year ended December 31, 2023, Buchans recorded income of $5,610,921.
This income included a gain on disposal of exploration and evaluation assets of $1,612,194, a reversal of impairment on exploration and evaluation assets of $64,223, a gain on reclassification of investment in associate to marketable securities of $2,795,000, a gain in fair value of marketable securities of $1,854,972, and a loss on disposal of marketable securities of ($100,000).
At December 31, 2023, Buchans held $171,030 (2022- $562,396) in cash and equivalents, and $15,456,067 in marketable securities, and had a working capital surplus of $15,201,710.
COMPANY OVERVIEW
Buchans holds nickel, copper, cobalt and gold exploration properties in Labrador, and plans to advance exploration on these long-overlooked but promising critical minerals assets over the course of the next two years. Buchans’ South Voisey’s Bay Ni/Cu/Co project has high-priority, drill-ready targets in a confirmed Voisey Bay-style environment, while its Tasiuyak Gold Project is believed to represent an orogenic, iron formation-hosted gold environment comparable to the renowned former Homestake gold mine in South Dakota.
In December 2023, Buchans sold certain mineral exploration properties located in central Newfoundland to Canterra Minerals Corporation (“Canterra”) (TSXV:CTM; OTCQB:CTMCF) for 24,910,000 Canterra common shares and 128,464,216 exchangeable warrants of Canterra, with a total value of $11.5 million (equivalent to $0.178 per common share of Buchans) based on Canterra’s quoted market price on the TSXV on that date of $0.075 per share.
Buchans intends to distribute at least 80% of the Canterra Shares underlying the Consideration Warrants (at least 67% of the total value of the transaction) (the “Distribution”) to shareholders of Buchans during the second quarter of 2024. Further information on the Distribution will be disclosed in due course, but it is expected that a special meeting of shareholders will be held on May 9, 2024 to approve the Distribution.
Buchans shareholders will retain their shareholding in Buchans, with funding available to advance exploration on Buchans’ nickel, copper, cobalt and gold exploration assets in Labrador, with the ultimate goal of a sale or go-public transaction in respect of those assets, and at the same time will retain indirect exposure to exploration in the world renowned Buchans camp through holding the to be distributed shares in Canterra.
The transaction with Canterra consolidates the central Newfoundland area play and puts the world-class potential of Buchans Newfoundland assets in the hands of a young and aggressive team with a proven ability to finance regional scale exploration programs.
In addition to its exploration properties in Labrador and shareholding in Canterra, Buchans holds mineral exploration interests in Ireland through its 14.4% shareholding in Minco Exploration plc. The Company also holds 33,000,003 shares of Royalties Inc (CSE:RI) at a market value on December 31, 2023, of $1,320,000.
EXPLORING FOR GOLD IN LABRADOR – Tasiuyak Gold Property
Buchans holds a 100% interest in its 54 claim (13.5 km2) Tasiuyak gold property in Labrador located 10 km south of Vale’s Voisey’s Bay nickel-copper-cobalt mine. The property covers the VBE-2 gold prospect discovered by previous explorers during the Voisey’s Bay exploration rush in the mid-1990s. The prospect consists of a 90 m long bedrock exposure of sulphide-rich iron formation that originally returned chip samples assaying up to 18.9 g/t Au over 1 m, as well as drilled intercepts over a 275 m strike including 5.5 g/t Au over 2.1 m, 4.2 g/t Au over 3.0 m, and 4.1 g/t over 2.1 m.
Exploration was last undertaken by Buchans on this project in 2018 and returned sawn bedrock channel sample assays from the VBE-2 prospect averaging 8.51 g/t Au & 0.93 g/t Ag over 4.8 m, including 31.91 g/t Au over 0.85 m. Prospecting undertaken along strike of the prospect traced the host horizon over a 3-kilometre strike where additional channel samples returned assays of up to 0.69 g/t Au over 0.50 m, two kilometres south of the VBE-2 prospect.
Buchans believes that the Tasiuyak gold property may be analogous to the former Homestake gold mine in South Dakota that is reported to have produced more than 40 million ounces of gold by mining between 1876 and 2001.
EXPLORING FOR NICKEL-COPPER-COBALT IN LABRADOR
Buchans holds (100%) two properties in Labrador considered prospective for Voisey’s Bay-style nickel-copper-cobalt deposits, including 43 claims (10.75 km2) covering prospective troctolitic gabbros of the Pants Lake Intrusive Suite at South Voisey’s Bay, and 5 claims (1.25 km2) covering mineralized troctolite at Voisey’s Bay itself.
South Voisey’s Bay
The South Voisey’s Bay property is located 80 km south of Vale’s Voisey’s Bay mine and covers mineralized troctolitic gabbros comparable in age and composition to rocks hosting the Voisey’s Bay deposits.
Previous explorers identified several prospects within Buchans’ property, including drilled intercepts (core length) of 1.1 m of 11.9% Ni, 9.6% Cu, and 0.43% Co, 0.65 m of 1.93% Ni, 1.07% Cu and 0.26% Co, and 15.7 m averaging 1.13% Ni, 0.78% Cu and 0.20% Co drilled in the late 1990s.
Buchans has completed reviews of past work on the property including compilation and modelling of available geophysical data by a leading consultant geophysicist. This compilation highlighted several anomalies as potential targets for buried Voisey’s Bay-style magmatic sulphide deposits. Among these is a strongly conductive, deep geophysical anomaly detected by Audiomagnetotelluric (AMT) surveys completed in the early 2000’s and located near the aforementioned high-grade intercepts drilled in the 1990’s. Given its location and other characteristics, Buchans believes the untested AMT anomaly remains a high-priority target for diamond drilling.
Voisey’s Bay (Luk)
Buchans holds five claims (1.25 km2) located 8 km southwest of Vale’s (NYSE-VALE) Voisey’s Bay nickel-copper-cobalt mine in northern Labrador. Known as the Luk Property, this property covers the extension of the same troctolitic intrusion that hosts the Voisey’s Bay mine on Vale’s adjacent mine property.
Buchans’ property is surrounded by Vale’s mine property, where Vale is nearing completion of a US$2.7 billion mine expansion to develop two additional underground mines adjacent to the currently operating Voisey’s Bay Ovoid open pit mine. Buchans is encouraged by recent announcements by Vale, including positive drilling results from its Reid Brook Extension zone in 2022 that returned mineralized intercept assaying 2.79% Ni and 1.31% Cu over 92.6 m core length (Vale Investors Presentation, Sept 7, 2022). In 2023, Vale announced increasing exploration activities at Voisey’s Bay including plans to complete in excess of 300,000 metres of drilling per year over the next 5 years.
Qualified Person:
Paul Moore, M.Sc., P.Geo., (NL), Vice President Exploration of Buchans Resources Limited and a Qualified Person as defined by National Instrument 43-101, has approved the scientific and technical disclosure in this News Release.
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
It is expected that an Annual and Special Meeting of Buchans shareholders will be held on Thursday, May 9, 2024.
At the meeting, Buchans shareholders will be asked to consider, among other proposals, a special resolution to approve the Distribution of Canterra shares to Buchans shareholders. Further information on the Distribution will be disclosed in due course, but it is expected that the Distribution will take place in the second quarter of 2024.