01 Apr Tethyan to Acquire Former Silver-Zinc-Lead Mines in Serbia
TETHYAN TO ACQUIRE FORMER SILVER-ZINC-LEAD MINES IN SERBIA
April 1, 2020 – Vancouver, B.C. – Tethyan Resource Corp. (TSX-V: TETH) (“Tethyan” or the “Company”) is pleased to announce it has entered into an arm’s length agreement to purchase a 100% ownership stake in Serbian company EFPP d.o.o. (“EFPP”), the holder of two exploration licences (the “Licences”) over the past-producing Kizevak and Sastavci silver-zinc-lead mines in the Raska district of Southwestern Serbia (Figure 1).
- The Licences are contiguous with Tethyan’s existing exploration rights and the acquisition would complete the consolidation of a district of known silver-zinc-lead vein-type and copper-gold porphyry deposits, presenting numerous strategic advantages;
- The Licences include two past-producing open pit silver-zinc-lead mines and host significant historical mineral resources and reserves that were reported in accordance with Yugoslav GKZ reporting criteria and indicate excellent brownfield exploration potential (see Historical Resource and Reserve Estimates below);
- At Kizevak, historic drilling and underground channel sampling data define mineralisation that is present from surface up to 200 metres depth and 1.2 kilometres in strike length that is open down dip and along strike, representing an immediate drill-ready target (Figures 2 & 3);
- Staged acquisition payments allow Tethyan to focus funds on drilling;
- Serbia is establishing itself as a recognised mining jurisdiction, attracting significant investment interest.
Fabian Baker, Tethyan’s President and CEO, commented: “This acquisition is a key step in Tethyan’s strategy to consolidate a district of historical mines and exploration prospects in Serbia. The Kizevak project in particular gives Tethyan an immediate drill ready target, and we can now drill the 1.2 kilometres of strike length, reported to host historical resources, between the former open pit mine and Tethyan’s excellent 2018 drilling results. With Kizevak as a cornerstone project the many satellite exploration targets identified by historical drilling, all within a few kilometres of Kizevak, become relevant to a possible district-wide operation. The plan moving forward is for Tethyan to commence drilling of these high-grade silver-zinc-lead targets in parallel with advancing our two copper-gold porphyry projects at Rudnica and Kremice in the Raska district of Serbia.”
Kizevak is a past-producing mine reported to host considerable historic mineral resources, along-strike from which Tethyan drilled mineralization including 12 metres at 22.03% zinc, 10.29 % lead, 167 g/t silver and 0.18 g/t gold (refer to Tethyan’s news release dated September 4th 2018). The mine was operated as an open pit by the Serbian state between 1984 and 2000, ceasing operations due to conflict in the region. The project benefits from numerous infrastructure advantages including water, power, road and rail access all within 5 kilometres, and a local workforce with a long history of mining. Additionally, the land comprising the wider project area is designated for mining purposes under the Serbian State spatial plan, providing many permitting benefits and efficiencies.
Mineralisation at Kizevak comprises steeply dipping, southeast striking, structurally controlled lenses of quartz-carbonate-sulphide vein breccias and stockwork zones hosted in andesite volcanics. Historic drilling and underground sampling data indicate that mineralisation occurs over a strike length of at least 1.2 kilometres, between 1 and 30 metres wide, and up to 200 metres down dip (Figures 2 & 3). This dominant southeast striking trend is intersected by at least one perpendicular southwest striking mineralised structure, which is inferred as an important control on high grade shoots.
Mineralisation is open down dip and along strike to the northwest, southwest and southeast. In 2018 Tethyan drilled four drill holes on its wholly owned licence 1.2 kilometres along strike to the southeast of the mine (refer to Tethyan’s news release dated September 4th 2018 and Figure 2) that returned mineralized intervals including:
- 12 metres at 22.03 % zinc, 10.29 % lead, 167 g/t silver, and 0.18 g/t gold for 35.09 % ZnEq (Hole KSEDD002, from 130 m)
- 43 metres at 4.30 % zinc, 2.49 % lead, 26 g/t silver, and 0.21 g/t gold for 7.39 % ZnEq (Hole KSEDD001, from 193 m)
- including 13.1 m @ 11.28 % zinc, 5.05 % lead, 57 g/t silver, and 0.32 g/t gold for 17.44 % ZnEq (from 221 m)
- 40.0 m @ 4.35 % zinc, 2.14 % lead, 27 g/t silver, and 0.34 g/t gold for 7.37 % ZnEq (Hole KSEDD003, from 137 m)
Sastavci was also mined historically by open pit on a smaller scale than at Kizevak and represents a priority drilling target. Outcropping, steeply dipping, massive sulphide veins up to 5 metres wide are visible in the pit walls. Tethyan collected 65 rock-chip samples across the Sastavci area, which returned assays ranging from trace to >30 % zinc (over range), 7.1 % lead, 94.3 g/t silver and 0.47 g/t gold in the Sastavci pit. A historic resource estimate is reported in the Serbian geological archives (see Historical Resource and Reserve Estimates below).
Additionally, to the north of the Sastavci open pit Tethyan has defined a greater than 100 ppb gold in soil anomaly over 800 metres long and 400 metres wide in strongly silica altered volcanic rocks. Rock-chip sample assays range from trace to 3.7 g/t gold, representing a separate epithermal gold exploration target.
Historic Resource and Reserve Estimates
In 1994 the Yugoslav Geological Survey reported combined estimated mineral resources in GKZ compliant A+B+C1+C2 categories of 8Mt at 45 g/t silver, 5.06 % zinc and 2.96 % lead at Kizevak, Sastavci and Karadak (a portion of the Kizevak resource, and Karadak are located on Tethyan’s existing licences).
The mineral resource estimates were reported by the state geological survey according to Yugoslav GKZ guidelines and do not comply with NI 43-101 reporting requirements and associated CIM definition standards. The authors caution that a qualified person has not done sufficient work to validate the historical estimates, and Tethyan is not treating the historical estimates as current mineral resources or reserves. Tethyan has not completed a detailed review of the historical resource or completed a new mineral resource estimate.
The historical resource estimates were completed using the polygonal method using data acquired from diamond drilling and underground sampling.
For readers not familiar with Yugoslav mineral estimates, such estimates were always stated as “reserves” and classified according to the A+B+C1+C2 or “alphabetical” classification, which was derived from the Russian system and is still applied throughout many countries in southeast Europe. The reserves had to be approved by the official Commission for Ore Reserves. The A, B, C1 and C2 categories reflect the levels of confidence in the actual tonnage exploited from a reserve, with confidence levels being – 95%, 80%, 70% and 35% respectively. Henley (2004) and others have evaluated the alphabetical classification system with respect to the compliant codes in Canada and Australia, and concluded that A+B is comparable to “measured”, C1 to “indicated” and C2 to “inferred” in internationally acceptable codes for reporting resources. However, these comparisons are only an approximation, and cannot be considered as equivalents.
To verify the historical resource estimate as current mineral resources or mineral reserves, drilling, mapping, detailed geological interpretation, geological modelling, grade mapping by interpolation using geostatistical analysis and mineral resource classification, using industry standard software, is required.
Terms of EFPP Acquisition
Closing of the transaction to acquire EFPP (the “Transaction”) is subject to satisfactory due diligence and TSX acceptance on or before 15th April 2020. The acquisition of EFPP will occur in two steps, an initial ‘First Closing’ whereby Tethyan will acquire 10% of the shares of EFPP and management control of the company, and a 12 month period in which to decide, in its sole discretion, whether to proceed to a ‘Second Closing’ when Tethyan has the right to acquire the remaining 90% of the shares of EFPP. A summary of the terms of the Transaction is as follows:
- In consideration for 10% of the shares of EFPP Tethyan will pay to the Sellers a total of EUR 625,000 cash on the First Closing.
- At any time within 12 months of First Closing, Tethyan may elect to acquire the remaining 90% of shares of EFPP on the Second Closing by:
- Paying EUR 1,375,000;
- Granting to the Sellers a 2% Net Smelter Return over the Licences;
- Issuing a total of 4 million ordinary shares of Tethyan, to be issued in four equal tranches of 1 million shares, with the first tranche issued on the Second Closing and each additional tranche issued each six months thereafter;
- Paying a deferred cash payment of EUR 500,000 on the two-year anniversary of First Closing.
Resignation of Directors
The Company also announces the resignation of Mr Richard Warke and Professor Poonam Puri as directors of the Company. Tethyan anticipates that additional directors will be appointed to the board of directors of the Company in due course.
Fabian Baker, Tethyan’s President & CEO, commented: “We would like to sincerely thank Mr. Warke and Professor Puri for their support of the Company, it has been a privilege to work with them and they are leaving us well positioned to successfully advance our new assets.”
Figure 1: Location of the Kizevak and Sastavci exploration licences within Tethyan’s existing licence holding in the Raska District of Serbia.
Figure 2: Map showing historical exploration drilling and adits that define a mineralised zone in excess of 1.2 kilometres in strike-length overlain on satellite imagery in which the past-producing Kizevak open pit is visible. Selected significant intercepts from historic sampling are labelled and all mineralised intervals greater than 2% lead + zinc are shown for reference.
Figure 3: Long section through the Kizevak deposit showing historic drill and exploration adit intercepts greater than 2 % lead + zinc; note the intercepts down to 530 metre elevation in the northwest versus intercepts to only 680 metre elevation in the southeast indicating significant upside to depth.
About Tethyan Resource Corp.
Tethyan Resource Corp. is a precious and base metals mineral exploration company incorporated in British Columbia, Canada, and listed on the TSX Venture Exchange. Tethyan is focused on the Tethyan Metallogenic Belt in Eastern Europe, mainly Serbia, where it is acquiring and exploring a portfolio of quality precious and base metals projects with known mineralization and compelling drill targets. Tethyan emphasizes responsible engagement with local communities and stakeholders, and is committed to the proactive implementation of Good International Industry Practice (GIIP) and sustainable health, safety and environmental management. More information can be found on Tethyan’s website: www.tethyan-resources.com.
Sampling Methodology, Quality Assurance and Quality Control
The drill core and rock chip sampling program and sampling protocols were supervised by Tethyan’s Exploration Manager, Mr Andrew Tunningley MAusIMM(CP), who is a Qualified Person as defined by National Instrument 43-101.
Tethyan’s drill core samples were collected from half cut PQ and HQ diameter core, where the core was sawn along a pre-defined cutting line. Sample intervals were selected by the geologists based on geological criteria including presence of alteration and mineralisation, style of mineralisation and lithological contacts. Minimum sample lengths of 0.5 metres and maximum sample lengths of 2 metres were employed. Each sample weighed between 2 and 13 kg depending on the length of the sample and diameter of drill core. Sampling was only conducted on visually mineralised intervals, including 10 metres either side of the visually mineralised interval. Data verification was conducted by the Qualified Person including checking of detailed geological logs against core observations, core photographs and analytical results. In addition, digital data was verified using industry standard software to validate the drill database prior to entering data into the master database. No check assays have been conducted to date. The chip samples were taken using a rock hammer. Typical sample weights were 2 kg per sample. Samples were collected in cotton bags and given a unique reference number.
Quality Assurance is provided through provision of standard operating procedures for the collection and submission of samples as well as data handling and management. Quality Control is monitored through the insertion of one certified reference material sample and one blank sample per batch of 20 samples. One duplicate sample is also inserted per batch. All samples are securely transported from the project site to the ALS Global sample preparation laboratory in Bor, Serbia by ALS couriers. Sample pulps are then sent to ALS Rosia Montana, Romania by air freight for gold analysis by 30 gram fire assay with AA finish (code FA-AA23). Multi-element analyses are conducted by ALS Loughrea, Ireland using a highly oxidising digestion with ICP-MS finish (code ME-ICPORE). ALS’s laboratories are ISO 2005 accredited, employ a Laboratory Information Management System for sample tracking, quality control and reporting, and are independent of Tethyan.
Historical drill and underground channel sample data has not been verified by the Qualified Person and should not be relied upon.
The technical information in this news release has been reviewed and approved by Tethyan’s Exploration Manager, Andrew Tunningley, MAusIMM(CP), who is a Qualified Person as defined by National Instrument 43-101.
Fabian Baker, President and Chief Executive Officer
+44 1534 881 885 | firstname.lastname@example.org
Andjelija Vujovic, Investor Relations
+381(0) 11 4077 433 | email@example.com
TSX Venture Exchange Disclaimer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the exploration program. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expected”, “intends”, “will be”, “look forward”, “looks” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Tethyan to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including: the completion of the First Closing and the Second Closing, receipt of all necessary regulatory approvals; future exploration programs; capital expenditures and other costs; and additional capital requirements. Although management of Tethyan has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Tethyan will not update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.