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Buchans Minerals Announce captivating PEA for Lundberg Deposit
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Buchans Minerals Announce captivating PEA for Lundberg Deposit


Buchans Minerals Corporation

Buchans Minerals Corporation

Published in Economy & Finance
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  • 1. Atlantic CanadaExploration & Development !  BASE METAL PRE-DEVELOPMENT !  Lundberg Positive Preliminary Economic Assessment !  Daniels Pond deposit !  MANGANESE PRE-DEVELOPMENT Buchans !  Woodstock Manganese deposits !  Possible spin-out Exploration Office Toronto Head Office !  EXPLORATION HIGHLIGHTS Woodstock !  Goldquest gold discovery !  Range copper / cobalt prospect
  • 2. Directors & Management!  Warren MacLeod BA., Director & President, experienced junior mining operator!  Paul Moore M.Sc., P.Geo., Director & VP Exploration, 25 years exploration!  Ed Merringer LL.B., Director, former partner at Ladner Gervais Law firm!  Steve Poad CA, Director, CFO Colossus Minerals!  Dan Burneski CA, Director, experienced international commodities trader!  Andrew Forrest M.Sc., B.Eng., Director, mining engineer
  • 3. Share StructureTrading Exchange: Toronto Venture Exchange (TSX-V)Trading Symbol: BMC.VShares Outstanding: 150,898,545Options: 8,913,000Warrants: 33,921,392Cash (May 31st, 2011): $3,500,060Market Cap (Jun 28th, 2011): ~$10,000,000
  • 4. Lundberg Base Metal Deposit Preliminary Economic Assessment June 2011The preliminary economic assessment is based only on Inferred Mineral Resources and are not Mineral Reserves and donot have demonstrated economic viability. Inferred Mineral Resources are considered too speculative geologically to havethe economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there istherefore no certainty that the conclusions of the PEA will be realized.
  • 5. LUNDBERG DEPOSITPRELIMINARY ECONOMIC ASSESSMENT Buchans Minerals – Benton JV – Ni-Cu Buchans Minerals – Zn-Cu-Pb (VMS)
  • 6. BUCHANS MINE (1928 – 1984) Lucky Strike Glory Hole
  • 7. LUNDBERG DEPOSIT:Old Lucky Strike Glory Hole Lundberg Mineralization
  • 9. LUNDBERG RESOURCE•  Lundberg & Engine House deposits •  Bulk tonnage base metal stockwork mineralization at surface •  Open pit mine plan completed Wardrop EngineeringLundberg Inferred Resource (National Instrument 43-101 compliant)Threshold Tonnes Zn % Pb % Cu % Ag g/t Au g/t Combined Zn, Pb, Cu %Lundberg 20,700,000 1.68 0.72 0.38 5.92 0.07 2.78Inferred ResourceEngine House 1,120,000 2.04 0.85 0.82 9.79 0.12 3.71Inferred ResourceInferred Resource * 17,278,660 1.63 0.69 0.40 5.96 0.07 2.72Within Open PitShell Design* This value does not reflect any economic parameter, as an Inferred Mineral Resource Estimate does not imply mineability. Inferred Resource Estimate reported from: TechnicalReport on the Mineral Resource Estimate for the Lundberg and Engine House deposits Buchans Area, Newfoundland, Canada. Prepared for Royal Roads Corp. by Peter C. Webster, B.Sc., P.Geo., P. James F. Barr, B.Sc., Mercator Geological Services Limited. Effective Date November 3, 2008.
  • 10. LUNDBERG INFERRED RESOURCE BLOCKS & OPEN PIT DESIGN LEGEND Zn Pb Cu Combined Grade 1-2 % 2-3 % 3-4 % 4-99 %
  • 11. Lundberg conceptual site plan NOTES: LEGEND: !
  • 12. Preliminary Lundberg PEA EconomicsLundberg PEA Economic Summary Base CasePre-Tax IRR 40.92%Pre-Tax NPV @ 6% discount rate $192.7 millionPre-Tax Cash Flow over Life of Mine $433.2 millionMine Capital $152.0 millionInferred Resource included in PEA pit design (tonnes) 17,278,660Waste Mined (tonnes) 52,930,648Stripping Ratio 3.06 to 1Metal Prices $1.22 Zn, $1.10 Pb, $3.62 Cu, $22.74 AgOperating Costs (Mining, Processing & G&A) $26.00 / tonneOperating Years 10Payback Period (Years) 1.5The PEA is based only on Inferred Mineral Resources and are not Mineral Reserves and do not have demonstrated economic viability.Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them thatwould enable them to be categorized as Mineral Reserves, and there is therefore no certainty that the conclusions of the PEA will berealized.
  • 14. LUNDBERG POSSIBLE DANIELS POND OPPORTUNITIES DEPOSIT Buchans Minerals – Benton JV – Ni-Cu Buchans Minerals – Zn-Cu-Pb (VMS)
  • 16. LUNDBERG POSSIBLE DANIELS POND OPPORTUNITIES DEPOSIT•  Daniels Pond deposit •  VMS base metal deposit exposed at surface •  Possible satellite mine contributing to larger Lundberg operation Daniels Pond (National Instrument 43-101 compliant Indicated & Inferred resources) Threshold Tonnes Zn % Pb % Cu % Ag g/t Au g/t Combined Zn, Pb, Cu % 2.0 % Zn Indicated 929,000 5.13 2.50 0.34 101.40 0.63 7.98 2.0 % Zn Inferred 332,000 4.61 2.13 0.30 85.86 0.53 7.04
  • 17. POSSIBLE OPPORTUNITY EXPLORATION PROSPECTS Buchans North (in situ)Clementine (transported) Intersections sulphide prospectshistoric (unclassified non-43-101 compliant) - 15.50% Cu, 1.85% Pb, 5.80% Zn, 214.8 g/ deposits (projected to surface)0.36 Mt @ 4.9% Zn, 2.6% Pb, 0.3% Cu & t Ag & 2.92 g/t Au/ 0.30 m -  15.52% Zn, 7.61% Pb, 0.92% Cu, 148.9 g/ stringer sulphide mineralization41.0 g/t Ag t Ag & 1.15 g/t Au/ 2.1 m favourable alteration Buchans camp rocks Outline of Buchans Camp rocks after GSC 2007 Little Sandy (stockwork) Lundberg (stockwork near surface) historic (unclassified non-43-101 compliant) 20.7 million tonnes 0.16 Mt @ 1.9% Cu incl. Red Indian Lake 1.68% Zn, 0.72% Pb, 0.38% Cu, 5.9 g/t - intersections up to 1.80% Cu/ 9.3 m Clementine West Ag & 0.07 g/t Au (Inferred, 1% - Incl. 3.21% Cu/ 3.90 m (stockwork) combined Cu+Pb+Zn cutoff) 5 km Intersections up to 118 m
  • 18. LUNDBERG POSSIBLE OPPORTUNITIES•  Possible future shortfall in world zinc production (Brook Hunt)•  Possible satellite operation at Daniels Pond deposit (100%)•  Exploration prospects •  Clementine West •  Buchans North•  Possible improved metallurgical recoveries•  Possible Barite production•  Regional deposits
  • 19. Manganese Woodstock Deposits Market•  Manganese critical to Steel production – 10 kgs / 1 tonne steel•  Growing Market •  8% per year for Manganese Ore Concentrates for a total current market of 13.6 million tonnes per annum •  26% per year for Electrolytic Manganese (EMM) for a total current market of 1.2 million tonnes per annum•  Electrolytic Manganese supply controlled by China •  97.4% of the 1.2 million tonnes per annum•  No North American production •  American Manganese planning production of 50,000 tonnes per annum•  Customers seeking secure supply chains•  North American ores amenable to lower cost production techniques
  • 20. Manganese Woodstock Deposits Market
  • 21. ManganeseRoadmap to Development New Brunswick Fredericton Hartford Deposits Halifax 200 km Plymouth Deposit
  • 22. Manganese Woodstock DepositsRoadmap to Development•  Potentially one of the largest Woodstock ManganeseManganese resources in North America (Historic non 43-101 compliant)• historic non NI 43-101 compliant Deposit Tonnes Mn % Fe % (uncategorized)•  Manganese leaching confirmed in1987 metallurgical tests by Witteck Plymouth 46,500,000 * 10.9 13.3Development Corp. North Hartford 45,000,000 * 8.00 12.0•  Potential to produce high puritymanganese products that include EMM, South Hartford 45,000,000 * 8.00 12.0EMD, Manganese dioxide powder,carbonate, hydroxide, and sulphate * These resources are historic in nature and are not national instrument 43-101 compliant and rely entirely on data provided by other sources which have not and cannot be independently verified at this time. As such, the data discussed herein should not be relied upon, but are presented as an indication of the exploration and development potential of the mineralization described.•  2011 drilling & hydrometallurgicaltesting begins to confirm and optimizeMn leaching & purification of Mnsolution
  • 23. Exploration Long Range JVHighlights
  • 24. Goldquest Discovery (Gold) N Range Copper Prospect Portage Nickel Prospect GOLDQUEST DISCOVERYoutcrop up to 8.5 g/t Au & 30.7 g/t Agfloat up to 106.4 g/t Au & 364.3 g/t Ag 5 kilometres
  • 25. lake N NORTH AREA 3 30 outcrop up to 8.5 g/t Au & 30.7 g/t Ag 34 0 float up to 18.3 g/t Au & 87.1 g/t Ag 34 0 3 40 outcrop rock sample 1.7 g/t Au, 8.1 g/t Ag 340 1.8 g/t Au, 7.7 g/t Ag outcrop float rock sample float, 2 x 1.5 m soil sample 1.7 g/t Au, 5.4 g/t Ag float, 1.5 x 0.5 m 12.4 g/t Au, 47.9 g/t Ag 3 50 float Select samples labelled assaying greater than 1 g/t gold 8.5 g/t Au, 30.7 g/t Ag outcrop gravel road Geology after van Staal et al., 2005, (GSC) 18.2 g/t Au, 87.1 g/t Ag Contoured elevation in metres above sea level float 4.1 g/t Au, 18.8 g/t Ag outcrop 360 3 60360 gold in soil anomaly (26 to 70 ppb Au) 100 metres 3 70 370 2.1 g/t Au, 8.8 g/t Ag float pond 7.3 g/t Au, 38.4 g/t Ag float19.8 g/t Au, 86.3 g/t Ag SOUTH AREA float, 20 cm float up to 106.438g/t Au & 364.3 g/t Ag 0 31.0 g/t Au, 138.0 g/t Ag 12.5 g/t Au, 43.3 g/t Ag float, 90 x 60 cm float, 40 cm 3 60 Goldquest Gold Discovery 0106.4 g/t Au, 364.3 g/t Ag float, 30 x 10 cm 36 0 22.0 g/t Au, 84.0 g/t Ag Long Range JV, Newfoundland float, 15 cm assays highlights 27.9 g/t Au, 157.2 g/t Ag Assay results to January 10, 2011 meta-diorite/gabbro (Ordovician) float, 50 x 30 cm meta-tonalite/granodiorite (Ordovician)
  • 26. INVESTMENT OPPORTUNITY•  Company Market Capitalization (June 21st, 2011) •  $10 million•  Lundberg Preliminary Economic Assessment •  $193 million Net Present Value (at a discount rate of 6%)•  Woodstock manganese deposits (Program ongoing) •  Potentially one of the largest manganese resources in North America •  Historic non NI 43-101 compliant•  Goldquest Discovery (Program ongoing) •  New gold discovery in previously unexplored region of Newfoundland •  50/50 Joint Venture with Benton Resources
  • 27. Forward Looking Statement DisclaimerThis powerpoint presentation contains or refers to "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements in thisrelease, other than statements of historical fact, which address activities, events or developments that Buchans Minerals believes, expects or anticipates will or may occur inthe future are forward-looking information. Wherever possible, words such as "plans", "expects" or "does not expect", "budget", "scheduled", "estimates", "forecasts","anticipates" or "does not anticipate", "believes", "intends" and similar expressions or statements that certain actions, events or results "may", "could", " "would", "might"or "will" be taken, occur or be achieved, have been used to identify forward-looking information.In particular, all statements in this powerpoint presentation that address estimated resource quantities, grades and contained metals, possible future mining, and explorationand development activities are forward looking statements. By its very nature, a preliminary economic assessment (“PEA”) prepared by Wardrop Engineering(“Wardrop”) is preliminary. The PEA includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied tothem that would enable them to be categorized as Mineral Reserves, and there is no certainty that the findings of the PEA will be realized. Wardrops assumptions,estimates, expectations, analysis and opinions used in the PEA are based on the information available to Buchans Minerals and Wardrop as of the date of this news release.Wardrops assumptions and estimates are based on experience and perceptions of trends, current conditions and expected development as well as other factors thatWardrop believes are relevant and reasonable in the circumstances, but which may prove to be incorrect. In particular, assumptions have been made regarding a numberof variables that impact the Lundberg project and include, among other things, market prices for metals, exchange rates, inferred resource tonnages & grades, strippingratios, processing techniques, through-put rates, flotation recoveries, concentrate grades, smelter charges, transportation charges, tailings disposal, waste rock disposal, sitereclamation, equipment salvage, operating costs (including mining, processing & general administrative costs), capital costs and assumptions that all the necessaryregulatory (including environmental) permits will be issued in respect of the project.Readers & viewers are cautioned that the foregoing list is not exhaustive of all factors, variables and assumptions which may have been used. Buchans Minerals is subjectto the specific risks inherent in the mining business as well as general economic and business conditions. Buchans Minerals’ actual results, programs and financial positioncould differ materially from those anticipated in such forward-looking statements as a result of a number of factors, many of which are beyond the Company’s control.These factors include, but are not necessarily limited to, results of the exploration activities and development of mineral properties, the interpretation of drilling results andother geological data, the uncertainties of resource estimations, receipt and security of mineral property titles, receipt of licenses required to conduct mining activities,country risks, project cost overruns or unanticipated costs and expenses, the availability of funds, fluctuations in metal prices, currency fluctuations, and general market andindustry conditions. Although the Company believes the expectations expressed in the PEA and other forward looking statements are based on reasonable assumptions,there is no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in suchinformation. Accordingly, such statements should not be in any way construed as guarantees of future performance as actual results or developments may differ materiallyfrom those forward-looking statements and readers should not place undue reliance on this information.