VANCOUVER, March 1, 2017 /CNW/ - Rathdowney Resources Ltd.
("Rathdowney" or the "Company") (TSXV: RTH) is pleased to provide
an update on activities on its flagship Olza zinc-lead-silver
project in Poland, and to report
that it has completed a private placement to assist with advancing
the project. Rathdowney has issued a total of 36,313,345
units (the "Units") of the Company's capital, for aggregate
proceeds (including two previously announced tranches) of
approximately $6.9 million.
Proceeds of the financing are planned to be directed toward
further advancement of Polish permitting activities and to refine
engineering work to progress the Company's Olza zinc-lead-silver
project toward the Polish feasibility (PZZ) as well as for general
corporate working capital purposes.
Project Olza
Project Olza is located in the Upper Silesian Mining District of
southwestern Poland, a world-class
region of Mississippi Valley-type ("MVT") zinc-lead deposits.
According to the USGS, the Upper Silesian District has the most
important accumulations of mineral resources of any of the world's
MVT districts, with an estimated endowment of some 731 million
tonnes1. The Pomorzany Mine, located 17 km south,
with the same host rocks and mineralogy, has produced in excess of
90 million tonnes2 of ore at comparable grades to
Olza.
The Polish State Geological Institute completed a historical
estimate in 1990 of some 77 million tonnes grading 6.15%
Zn+Pb3 in the immediate Project Olza area, following
drill programs during the 1950s to 1980s. The estimate,
reported in the C1/C2 categories under the Polish resource
classification system (very similar to the Soviet system in use at
that time). A Qualified Person has not done sufficient work
to classify the estimate as current mineral resources and the
Company is not treating it as current.
Rathdowney's drilling from 2011 to 2014 has confirmed Inferred
Mineral Resources of 24.4 million tonnes grading 7.02% Zn+Pb at a
2.0% Zn cut-off4 in a portion of the above area.
A Preliminary Economic Assessment ("PEA", see April 20, 2015 news release) based on the 24.4
million tonnes in the 2014 resource shows strong potential
financial returns, including an after-tax Internal Rate of Return
of 30% and payback of 2.4 years. Development, as described in
the PEA, would include a 6,000 tpd low-cost, bulk-tonnage
underground operation and conventional treatment facility,
producing two clean, low-iron, marketable concentrates5,
a scenario similar to the long-life Pomorzany mine. The
Project Olza development would utilize existing, well-developed
infrastructure in the district, including on-site rail that
provides direct access to European smelters, ports and markets, as
well as roads, power facilities. Skilled technical trade workers
and other contractors are also available in the region. All
in, on-site operating costs are estimated to be US$47.42/tonne, and when provisions for shipping,
handling and other off-site treatment (TC/RC) are included, the PEA
estimates an all-in cost to produce a pound of zinc of US$0.63 per pound.
Since completion of the PEA, Rathdowney has completed additional
drilling to collect geotechnical data for continued planning of
underground infrastructure and to further test the mineral
resources (see news releases in 2014 and 2015). This work was
very successful, indicating excellent potential to expand the
mineral resources and extend the mine life from that project in the
2015 PEA.
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1 Taylor,
R.D., Leach, D.L., Bradley, D.C. & Pisarevsky, S.A., 2009,
Compilation of Mineral Resource Data for Mississippi Valley-Type
& Clastic Dominated Sediment-Hosted Lead-Zinc Deposits,
U.S.G.S. Open File Report 2009-1297, 42 p.
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2 www.geoportal.pl
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3 Historical estimate (1990)
Zawiercie I & II deposits, in 1992 Polish State Geological
Institute report.
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4 Individual grades are 5.53% Zn and
1.49% Pb.
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5 For
additional details, see Rathdowney's December 31, 2014 Preliminary
Economic Assessment Technical Report which is filed at
www.sedar.com. 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. Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability.
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Project Status
Project Olza is located in a proven mining district with
excellent infrastructure and access to smelters and markets.
Programs completed from 2011 to present have met all terms of its
exploration concessions, giving the Company the sole right to
advance Olza towards an exploitation concession. The 2015 PEA
is forming the basis of Rathdowney's Deposit Development
Plan. The Company has also completed baseline data collection
since 2013, and is on track to finalize the studies for an
Environmental and Social Impact Assessment.
"Having completed all terms of its Exploration Concessions, and
its Geological Documentation formally approved, the project has
been substantially de-risked," said Chairman David Copeland. "Project Olza is located in a
proven mining district, and Rathdowney now has a clear and
exclusive pathway towards an exploitation concession. With a
significant financing completed, the Company will refocus its
efforts toward achieving that objective."
Additional Details of the $6.9
Million Financing
Each Unit consists of one common share in the capital of
the Company (a "Share") at a price of $0.19 per Unit (the "Issue Price") and one common
share purchase warrant (a "Warrant") entitling the holder to
purchase one additional Share (a "Warrant Share") at a price of
$0.24 per Warrant Share for a period
of two years. The Units, Shares and Warrant Shares will be
subject to applicable resale restrictions, including a four month
hold period from date of closing of the Offering under applicable
Canadian securities laws. Finder's fees of 6% have been paid
on a portion of the private placement.
Other Corporate News
The Company also announces that it has entered into a
$30,000 Convertible Debenture (the
"Debenture") with an unrelated lender (the "Lender"). The
Debenture is unsecured and will bear interest at a rate of 12% per
annum, and has a Maturity Date of February
24, 2019 ("Maturity Date"). The Lender may in its sole
discretion elect to convert all, but not less than all, of the
indebtedness into that number of Shares of the Company determined
based on a conversion price of $0.25/share during a period of eighteen months
after the date of the Debenture. The Debenture proceeds will
be used by the Company for working capital. The Debenture is
subject to acceptance by the TSX Venture Exchange.
David Copeland, PEng. Chairman 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 Copeland
Chairman
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. 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.
Information Concerning Estimates of Inferred
Resources
This news release uses the term "inferred mineral
resources". Rathdowney Resources Ltd. advises investors that
although these terms are recognized and required by Canadian
regulations (under National Instrument 43-101 Standards of
Disclosure for Mineral Projects), the U.S. Securities and Exchange
Commission does not recognize them. Investors are cautioned
not to assume that any part or all of the mineral deposits in these
categories will ever be converted into reserves. In addition,
"inferred resources" have a great amount of uncertainty as to their
existence, and economic and legal feasibility. It cannot be
assumed that all or any part of an Inferred Mineral Resource will
ever be upgraded to a higher category. Under Canadian rules,
estimates of Inferred Mineral Resources may not form the basis of
feasibility or pre-feasibility studies, or economic studies except
for Preliminary Economic Assessment as defined under 43-101.
Investors are cautioned not to assume that part or all of an
inferred resource exists, or is economically or legally
mineable.
SOURCE Rathdowney Resources Ltd.