Swedish high-tech metal producer Buchans Resources has entered into a collaboration agreement with Boliden Mineral, which will evaluate Buchans' volcanogenic massive sulphide (VMS) base metals property in Newfoundland, Canada, for possible future investment and participation.
Boliden Mineral is part of the Boliden Group and is a wholly-owned subsidiary of Boliden, a European zinc, copper, lead and nickel producer.
Subject to the outcome of Boliden’s evaluation, it is the intention of the involved parties to discuss and negotiate a proposed earn-in and option agreement.
Following this, Boliden will be given an option to earn an interest in the project against contributing to the funding for the development of the project. This will also include an option to enter into a joint venture agreement that will govern the parties’ interest in the project in the event Boliden exercises its right to earn an interest in the project.
Buchans chairperson and CEO John Kearney says “the collaboration agreement will combine Buchans in-depth, hands-on, knowledge of the historic Buchans camp with Boliden’s experience and technological expertise in near-mine exploration for VMS base metal deposits.
“We believe this collaboration between Boliden and Buchans can lead to future discoveries of new buried, high-grade, orebodies that could lead to revitalisation of this world-renowned historic VMS mining camp.”
The collaboration agreement outlines the terms and conditions under which Buchans will provide information about, and access to, the property for the purpose of facilitating Boliden’s evaluation of the VMS project.
In addition, Boliden will share with Buchans technical data from its geology/geophysical review and deliver to Buchans relevant technical data compiled by Boliden with respect to the project.
Boliden will contribute $600 000 to Buchans towards the costs of maintaining the property and approved ongoing exploration and evaluation programmes to be undertaken by Buchans on the VMS property during the exclusivity period.
As such, Buchans has agreed to grant Boliden exclusivity for a period of one year to December 31, 2021, to complete its evaluation and negotiate the earn-in and option agreement and the joint venture agreement.
During this period, Buchans has agreed not to provide information to or negotiate with any third party on the VMS project and, assuming Boliden submits a proposal, a right of first refusal for a further six-month period.
Kearney notes that Boliden has achieved “considerable exploration success” near established historic mine sites, including at its world-class Garpenberg VMS mine located in one of Sweden’s oldest mining areas, and at its Tara zinc and lead mine in Ireland.
“At Garpenberg, in Sweden, Boliden’s exploration team discovered an additional major deposit near its established mine site at the end of the 1990s. Garpenberg currently represents one of the world’s most productive underground zinc mines; a modern, industry-leading operation using largely automated technology that has transformed the operation into a more operationally reliable, ecofriendly, and cost-effective operation.”
In Ireland, near the established 130-million-tonne Tara mine, Europe’s largest zinc mine that has been in operation since 1977, Kearney says Boliden’s exploration team discovered the new Tara Deep deposit in 2017 southeast of the main orebody following exploration drilling of a seismic anomaly.
“Ongoing exploration since initial discovery has extended this deposit to a reported inferred resource of 22.4-million tonnes, grading 7.8% zinc and 1.6% lead.”