REG - Mineral & Financial - INVESTMENT UPDATE: ASCENDANT / REDCORP

Mineral & Financial InvestmentsAnnouncement

26/07/2023 07:00

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RNS Number : 2360H  Mineral & Financial Invest. Limited  26 July 2023

MINERAL AND FINANCIAL INVESTMENTS LIMITED

Investment Update: Ascendant / Redcorp Announces Initial Feasibility Study For
The Venda Nova Deposit with a Post-Tax Npv(@8%) of US$147 Million and a 39%
IRR

 

Highlights

·    Post-tax NPV(8%) of US$147 million and 39% IRR at long term metal
prices

·    Avg. annual payable zinc equivalent ("ZnEq") production of 124
million lbs. per annum over first 5 Yrs.

·    Average All-in Sustaining Cost ("AISC") of US$0.59/lb. ZnEq over
first 5 years

·    Robust Average Free Cash flow of US$56 million per annum over the
first 5 years

·    Upfront capex requirement of US$164 million (including US$12 million
of contingency)

·    Inaugural NI 43-101 compliant Proven and Probable Reserves (100%
basis) in the North Zone of 7.0 Mt at 9.50% ZnEq and in the South Zone
Probable Reserves of 7.6 Mt grading 1.24% CuEq.

·    Updated NI 43-101 compliant Mineral Resource (100% basis) of:

§ North Zone: 8.9Mt at 10.52% ZnEq Measured and Indicated and additional
Inferred Resources of 0.5Mt at 6.62% ZnEq

§ South Zone: 10.0Mt at 1.22% Copper Equivalent ("CuEq") and additional
Inferred resources of 8.1 at 1.16% Cu Eq.

·    Fulfilled option requirement to deliver 80% indirect ownership in the
Lagoa Salgada Project.

·    Metallurgy results confirm strong metal recoveries and saleable
concentrates.

·    Optimization Programs commenced to enhance NPV, IRR and operational
efficiencies targeted for completion by year end.

 

Camana Bay, Cayman Islands - 26 July 2023 - Mineral and Financial Investments
Limited (LSE-AIM: MAFL) ("M&F", M&FI, "MAFL" or the "Company") is
pleased to announce results of its initial NI 43-101 Feasibility Study ("FS")
for its Lagoa Salgada VMS Project in Portugal based upon an updated Mineral
Reserves and Resources Estimate. The completion of the FS completes
Ascendant's Option earn-in requirements to move project ownership to 80%,
subject to closing documentation with all other conditions having previously
been met.

The Feasibility Study was completed by QUADRANTE, a multidisciplinary
engineering and consulting company with more than 25 years' experience in
Europe, Africa and the Americas. Mine planning, design and engineering was
undertaken by IGAN INGENIERÍA, an independent consulting firm specializing in
mine planning and engineering for open pit and underground mining projects and
operations based in Spain. The DFS is based on the NI 43-101 Mineral Resource
estimate completed by MICON International dated May 31, 2023, and Mineral
Reserves estimate completed by IGAN dated 16 June 2023. Golder Associates are
currently engaged in a comprehensive peer review of the entire report. The
final FS report will shortly be posted on Ascendant's site as well as
M&F's and SEDAR.com.

Jacques Vaillancourt, President & CEO of M&F Investments stated, "We
are very pleased that Ascendant have completed this initial feasibility study
for the Venda Nova deposit at Lagoa Salgada. It is the first comprehensive
study encompassing all areas of operation required for the commercialization
of Lagoa Salgada. It will also result in Ascendant completing the earn-in to
secure an 80% interest in what is proving to be a robust project even at this
early stage. Lagoa Salgada remains a discovery project with significant
further upside potential expected as we optimize these results and continue to
expand the resource base. We believe the results of the FS demonstrate a
solid, economically robust project for what has always been the initial
development phase for the larger potential we see for the Lagoa Salgada
property. Given the nature of VMS deposits to occur in clusters, especially in
the Iberian Pyrite Belt, we see evidence of potential for several more
deposits to be defined in the coming years to enhance the overall value
proposition at Lagoa.  Furthermore, we expect these results to support our
current financing discussions and construction decision in the coming months."

 

 Lagoa Salgada Definitive Feasibility Study Results (July 2023)   Units         Value
 Post-Tax NPV                                                     US$ Mlns      $147.1
 Post-Tax IRR                                                     %             39.3%
 Payback                                                          Years         2.0
 Mine Life                                                        Years         14.5
 Initial Capital Costs - Including Contingency                    US$ Mlns      $164.4
 LoM Sustaining Capital Costs                                     US$ Mlns      $96.9
 Closure Costs                                                    US$ Mlns      $6.0
 Average Zn. Equivalent Payable Production                        M. Lbs./Ann.  77.01
 Total Zn. Equivalent Total Production                            M. Lbs.       1,155.15
 C1 Cash Costs Zn. Equivalent (Co-Product)                        $/lb Zn.Eq.   $0.67
 All-In Sustaining Costs (AISC) - Zn. Equivalent (Co-Production)  $/lb Zn.Eq.   $0.71

Optimization Opportunities

The completion of FS completes the requirements by Ascendant to Earn an 80%
ownership in the project as required under the Option Earn In agreement. The
Company believes that with additional time now available, the following near
term optimization opportunities exist to further enhance the FS prior to
commencing development work over the next six months.  The Company's initial
focus will be as follows:

·     Optimize mine ore sequencing to maximize revenues in the initial
years.

·     Optimization of the mining and processing rate to optimize NPV and
IRR.

·     Undertake further metallurgical test work to enhance metal
recoveries above those already achieved in tests to date.

Project Overview

The Lagoa Salgada Project is located within the north-western section of the
prolific Iberian Pyrite Belt ("IBP") in Portugal, approximately 80km southeast
of Lisbon, accessible by national highways and existing roads. The Project is
comprised of a single exploration permit covering an area of approximately
7,209 hectares. The Project represents a high-grade, polymetallic
zinc-lead-copper development and exploration opportunity in a low risk,
established and prolific jurisdiction where the project has been accorded a
Project of National Interest ("PIN") status.

Figure 1. Project Location

Updated Minerals Reserves and Resources Estimate

Table 1. below outlines the initial NI 43-101 Proven and Probable Mineral
Reserves Estimate prepared by Micon International Limited ("Micon") upon which
the FS was based, and Table 2 provides the updated total Mineral Resource
Estimate currently identified for the Lagoa Salgada project to date.  Infill
drilling in 2022 focused on upgrading sufficient high-grade mineralization in
the North Zone and part of the mineralization in South Zone to the Measured
and Indicated categories to support the completion of the FS as required by
the Earn In agreement.

Future drilling is expected to add additional Resources as the project moves
forward to extend the overall mine life and it should be noted both the North
and South zones remain open to future expansion along strike and at depth for
future exploration. In addition, several regional exploration targets have
been identified for future exploration work aiming to further increase the
known mineral resources on the property, which should extend the overall mine
life and/or potentially support a future expansion.

Proven and Probable Reserves are estimated at 14.6Mt with 7.0Mt at a grade of
9.50% ZnEq in the North Zone and 7.6Mt at a grade of 1.24% CuEq in the South
Zone, sufficient to support an initial mine life of 14+ years based upon a
throughput rate of 1.2Mtpa through the plant as outlined in the FS. Reserves
were defined using an NSR calculation based upon current metallurgical
recoveries, payability and treatment charges and mining methods.

The project has converted 77% of its Measured and Indicated resources into
reserves, additionally there are 0.5Mt at a grade of 6.62% ZnEq in the North
Zone and 8.13Mt at a grade of 1.16% CuEq in the South Zone of Inferred
Resource. Additional drilling is required to upgrade these additional
resources to the Measured and Indicated categories.

Gross Attributable Mineral Reserves

Note: the operator is Ascendant Resources Limited

Table 1: Mineral Reserves (100%)

 Zone   Reserve Category  Mass (kt)  NSR ($/t)  Cu (%)  Pb (%)  Zn (%)  Sn (%)  Ag (ppm)  Au (ppm)
 North  Proven            2,100      89.6       0.26    2.80    3.20    0.15    62        0.75
        Probable          4,900      81.7       0.34    2.30    2.10    0.14    63        0.74
        Total             7,000      84.1       0.32    2.45    2.43    0.14    63        0.74
 South  Proven
        Probable          7,600      49.6       0.41    0.41    1.30    0.00    15        0.05
        Total             7,600      49.6       0.41    0.41    1.30    0.00    15        0.054
 Total  Proven            2,100      89.6       0.26    0.26    3.20    0.15    62        0.75
        Probable          12,500     62.2       0.38    0.38    1.61    0.05    34        0.32
        Total             14,600     66.1       0.36    0.36    1.84    0.07    38        0.38

 

Table 2-A: Mineral Resources (Inclusive of Reserves - 100%)

 Deposit  Domain  Category             Density  Mass  NSR-MRE  Zn    Pb    Cu    Sn    Ag     Au    ZnEq   NSR-MRE  Zn     Pb     Cu    Sn    Ag        Au
                                       g/cm(3)  Mt    S/t      %     %     %     %     g/t    g/t   %      $m       kt     kt     kt    kt    koz       koz
          Gos     P1&P2 Indicated      2.96     1.89  109.0    0.46  2.51  0.1   0.26  44.4   0.86  8.38   206.2    8.8    47.4   1.9   4.8   2,700.1   52.5
                  Inferred             2.56     0.35  81.1     0.42  1.67  0.1   0.1   36.9   0.79  5.77   28.6     1.5    5.9    0.4   0.4   418.2     9.0
          tMS     P1&P2 Indicated      4.06     0.92  107.7    0.25  2.47  1.08  0.2   121.6  1.24  13.27  98.9     2.3    22.7   9.9   1.8   3,591.2   36.5
                  Inferred             3.74     0.07  75.6     0.27  2.12  0.84  0.14  74.3   1.41  10.74  5.6      0.2    1.6    0.6   0.1   177.7     3.4
 North    pMS     P1&P2 Indicated      4.44     5.46  143.7    3.79  2.9   0.28  0.13  66.5   0.72  11.58  784.1    206.8  158.3  15.0  7.1   11,677.1  125.6
                  Inferred             4.81     0.06  88.7     2.78  1.47  0.11  0.07  33.6   0.4   6.73   5.2      1.6    0.9    0.1   0.0   62.9      0.7
          str     P1&P2 Indicated      2.91     0.63  45.0     0.75  0.24  0.48  0.08  22.1   0.06  3.82   28.5     4.8    1.5    3.0   0.5   450.8     1.2
                  Inferred             2.83     0.01  44.8     0.58  0.38  0.46  0.13  29.4   0.2   4.75   0.3      0.0    0.0    0.0   0.0   7.2       0.0
 North    Total   P1&P2 Indicated      3.85     8.9   125.6    2.50  2.58  0.34  0.16  64.4   0.75  10.52  1,117.7  222.7  229.8  29.9  14.3  18,419.3  215.8
                  Inferred             2.86     0.49  80.6     0.68  1.70  0.22  0.11  42.0   0.83  6.62   39.7     3.3    8.4    1.1   0.5   666.0     13.1

Notes to Table 2-A

1.         Mineral resources unlike mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources may be
materially affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues.

2.         The mineral resources have been estimated in accordance
with the CIM Best Practice Guidelines (2019) and the CIM Definition Standards
(2014). Coherent and contiguous mining shapes backing reasonable prospect for
economic extraction were considered.

3.         Mineralized Zones: Gos=Gossan, tMS= transition massive
sulphides  pMS= primary massive sulphides, Str=Stringer, FR= -Fissural
Remobilizations

4.         ZnEq% = ((Zn Grade*26.46)+(Pb Grade*22.05)+(Cu Grade *
77.16)+(Au Grade*54.66)+(Ag Grade*0.71)+(Sn Grade * 164.55))/26.46.

5.         Metal Prices: Cu $7,716/t, Zn $2,646/t, Pb $2,205/t, Au
$1,700/oz, Ag $22.00/oz, Sn $26,455/t.

a.          Gos= ((Sn%*0.40)*Sn$)+((Pb%*0.20)*Pb$)+((Au
ppm*0.91)*Au$)+((Ag ppm*0.89)* Ag$)

b.         tMS= ((Sn%*0.40)*Sn$)+((Pb%*0.50)*Pb$)+((Ag ppm*0.65)*
Ag$)+((Zn% *0.5)*Zn$)

c.          pMS= ((Sn%*0.40)*Sn$)+((Pb%*0.60)*Pb$)+((Ag ppm*0.45)*
Ag$)+((Zn%*0.70)*Zn$)

d.         str= ((Cu%*0.60)*Cu$)+((Pb%*0.5)*Pb$)+((Ag ppm*0.4)*
Ag$)+((Zn%*0.70)*Zn$)

6.         NSR-MRE cut-off: Gos= $48.24, tMS= $46.54, pMS= $41.06,
str= $37.83

 

 

 

Table 2-B: Mineral Resources (Inclusive of Reserves - 100%)

 Deposit  Domain  Category   Density  Mass   NSR-MRE  Cu    Zn    Pb    Ag     Au    CuEq      NSR-MRE  Cu    Zn     Pb    Ag       Au
                             g/cm(3)  Mt     S/t      %     %     %     g/t    g/t   %         $m       kt    kt     kt    koz      koz
          C1 FR   Indicated  2.89     6.43   63.30    0.40  1.26  0.75  13.13  0.07  1.21      407.0    25.5  81.2   48.2  2,715.4  13.7
                  Inferred   3.6      0.83   50.40    0.61  0.47  0.23  12.26  0.13  1.04      42.1     5.1   3.9    1.9   329.0    3.4
          C2 FR   Indicated  2.86     2.5    67.50    0.50  1.23  0.64  15.58  0.04  1.28      168.5    12.4  30.8   16.0  1,251.4  3.6
 South            Inferred   3.01     3.66   62.00    0.54  0.96  0.42  17.32  0.08  1.2       226.6    19.6  35.0   15.5  2,036.7  9.6
          C3 FR   Indicated  2.85     1.11   62.50    0.39  1.17  0.54  20.77  0.04  1.16      69.2     4.3   13.0   6.0   740.0    1.3
                  Inferred   3.07     3.64   60.10    0.67  0.69  0.22  16.62  0.04  1.16      218.7    24.5  25.1   7.9   1,943.9  5.3
 South    Total   Indicated  2.88     10.04  64.20    0.42  1.24  0.70  14.58  0.06  1.22      644.7    42.2  124.9  70.2  4,706.8  18.6
                  Inferred   3.04     8.13   59.90    0.60  0.79  0.31  16.49  0.07  1.16      487.4    49.1  64.0   25.3  4,309.5  18.3

 

Notes to Table 2-B

1.         Mineral resources unlike mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources may be
materially affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues.

2.         The mineral resources have been estimated in accordance
with the CIM Best Practice Guidelines (2019) and the CIM Definition Standards
(2014). Coherent and contiguous mining shapes backing reasonable prospect for
economic extraction were considered.

3.         Mineralized Zones: Gos=Gossan, tMS= transition massive
sulphides  pMS= primary massive sulphides, Str=Stringer, FR= -Fissural
Remobilizations.

4.         CuEq% = ((Zn Grade*26.46)+(Pb Grade*22.05)+(Cu Grade *
77.16)+(Au Grade*54.66)+(Ag Grade*0.71)+(Sn Grade * 164.55))/77.16.

5.         Metal Prices: Cu $7,716/t, Zn $2,646/t, Pb $2,205/t, Au
$1,700/oz, Ag $22.00/oz, Sn $26,455/t.

6.         NSR-MRE: South Deposit=
((Cu%*0.65)*Cu$)+((Zn%*0.75)*Zn$)+((Pb%*0.65)*Pb$)+((Au ppm*0.05)*Au$)+((Ag
ppm*0.80)*Ag$)

7.         NSR-MRE cut-off: South Deposit= $37.83

 

 

Net Attributable Mineral Reserves

Note: the operator is Ascendant Resources Limited

MAFL hold between 5% and 20% interest in the Lagoa Salgada project as
previously disclosed, due to ongoing  contractual negotiations. The details
of this are set out the end of this announcement.

 

Mining

In line with previous studies, the mine is designed using a single access ramp
from surface and will target the extraction of ore from the North and South
Zones at a rate of 1.2 million tonnes per annum ("Mtpa").

Mining will be undertaken by targeting the various sub domains within the ore
deposit to maximize metallurgical recovery. As with most VMS type deposits,
the sub domains reflect a precious metal rich gossan layer above a Massive
Sulphide layer (further divided into a Transition and Primary layer) and a
layer of stockwork mineralization each with its own metallurgical
characteristics.  The mining methods defined are a combination of transverse
sublevel stoping and cut & fill. Paste backfill is to be used for both
mining methods to maximize ore recovery and productivity while minimizing
surface tailing disposition.  The initial years will focus on mining the
higher-grade gossan and massive sulphide zones in the North Zone, followed by
the South Zone as underground access is developed in the early years of the
operation to the South zone. Mining will be conducted using an owner operated
electric fleet which will reduce operating costs.

Figure 2. Underground Mine Design

 

(In blue the main ramps and accesses and in green and violet the ore blocks to
be mined)

 

Metallurgy

Metallurgical testwork was completed by Grinding Solutions ("GSL") in
Cornwall, UK. Confirmatory testwork was developed by Maelgwyn Mineral Services
Africa to confirm metal recoveries and saleable concentrates have been
achieved. Further testing is expected improve on current results as fully
optimized reagents requirements are developed.  The Company notes that its
consultants have indicated that the actual performance of operating mines in
the region have typically seen an improvement in mined head grade and/or
recoveries once an industrial scale operation is in production as compared to
lab testing.

The approach to flowsheet development was to prepare representative master
composites for each ore type, then proceed through open circuit to identify
and optimize flowsheet conditions and reagent schemes. Locked cycle tests were
then conducted on master composites to demonstrate the anticipated overall
metallurgical performance within a continuous circuit.

Tests were completed on blends of Primary Massive Sulphide (PMS), Stockwork
(STW), Gossan (GO), Transition Massive Sulphide (TMS) and Stringer (STR) ores
to allow comparison with individual composite results and to assess the
viability of co‐processing the ore types.

Mineralogical assessments were undertaken to provide information to refine the
comminution/beneficiation process during optimization, and to provide
reasonable expectations for metallurgical performance versus mineral
liberation and association within each ore type. Samples from various open and
locked cycle test products were used to characterize final concentrates and
tailings.

The developed metallurgical models were applied to mine production schedules
as part of the financial modelling process. The resulting average recoveries
over the life of the mine (LOM) are presented in the table below:

Table 3. Achieved Recoveries by Metal and Domain

 Mine Reserve Domain  Cu   Pb   Zn   Ag   Au   Sn
 Gossan               -    20%  -    89%  91%  40%
 TMS                  30%  50%  50%  65%  -    40%
 Stringer             60%  50%  70%  15%  -    -
 PMS                  30%  60%  70%  30%  10%  40%
 STWK                 65%  65%  75%  15%  5%   -

 

Table 4 below highlights the concentrate grade profile as determined by the
various metallurgical testwork.  These results are largely in line with other
regional producers. The Project will produce four concentrates, namely Zinc,
Lead, Copper, and a Tin concentrate.

Table 4. Concentrate Technical Specifications

 Concentrate  Zinc (%)  Lead (%)  Copper (%)  Tin (%)  Gold (ppm)  Silver (ppm)
 Zinc         35~45     -         -           -        2~80        125~2,500
 Lead         -         30~35     1.5~2.5     -        1.5~25      300~2,300
 Copper       1.5       0.5~1.5   20          -        -           150~200
 Tin          -         2~12      -           50       -           -

 

Processing

The mineral treatment plant is based on industry standard methods for mineral
concentrating, comprising of crushing, grinding, and flotation processes to
produce various concentrates of copper, lead, zinc, tin and Au/Ag dore bars.
The process areas are tailored to the specific mineral domains being
processed.

The mined material goes through a grizzly feeder and primary jaw crusher, and
then onto to a grinding circuit which consists of a SAG mill, ball mill, and
vertical mill in closed circuit with hydrocyclones. The material is discharged
onto a vibrating screen, with rejected pebbles recirculated to a pebble
crusher.

The copper and lead flotation circuit includes aeration and conditioning
tanks, rougher cells, regrinding mill, and cleaning stages. The circuit can
produce bulk or separate Cu and Pb concentrates depending on the mineral
domain. The zinc flotation circuit consists of conditioning tanks, rougher
cells, regrinding mill, and cleaning stages. Except for Fresh Massive
Sulphide, only the rougher and cleaner circuit is used.

The sulphide flotation circuit removes sulphides before concentrating tin
minerals. It includes conditioning tanks, rougher cells, and cleaner stages.
Rougher tailings flow to the next area, while the concentrate is pumped to the
tailings management area. The flotation circuit combines flotation and
gravimetric concentration technologies. It includes conditioner and aeration
tanks, rougher and cleaner stages. The intermediate tin concentrate is further
processed using multi-gravity separators to increase tin content. A summary
Flowsheet is provided below.

Figure 3. Simplified Process Flow Diagram

Infrastructure

The Lagoa Salgada Project will be developed on a greenfield site located in
close proximity to Grândola municipality in the Setúbal district, which
benefits from well-established infrastructure including road and rail
transport, power, and water supply services. Transportation of supplies will
be facilitated by trucks from Portugal or Spanish locations, while concentrate
products will initially be shipped to the Sines port by road and subsequently
by ship to final destinations.

Figure 4 Site Layout

The project site will have a compact layout that incorporates essential
components such as the tailings storage facility, ore and waste dumps, water
treatment infrastructure, and various buildings including administration,
warehouse, laboratory, gatehouse, and mobile equipment workshop. The
processing facilities will consist of a primary crusher building, ore
stockpiles on the ROM pad, a mill building, and a paste plant building.

The mine will be accessed via a portal and the ore will be brought to the
surface and stored as stockpiles, while waste stockpiles will be utilized for
constructing the embankments of the Tailings Storage Facility.

The mine plan outlines the processing of 14.8 Mt of ore and the generation of
1.9 Mt of waste rock. After accounting for concentrate and underground
backfill, a total of 11.3 Mt of tailings, along with 1.0 Mt of development
rock, will be deposited in the TSF.

Capital Costs

Upfront capital costs are estimated at US$164 million inclusive of US$12
million in contingency or approximately 10%. A further US$102.9 million of
sustaining capital is planned over the 14.5-year mine life, including closure
costs. Pay back is in the order of 2 years with an after-tax IRR of 39%.

Table 5. Capital Costs

 Capital Costs               Unit        Value
 Support Infrastructure      USD (,000)  $18,505
 Tailings Storages Facility  USD (,000)  $5,543
 Pastefill Plant             USD (,000)  $5,300
 Process Plant               USD (,000)  $67,525
 Underground Capital         USD (,000)  $17,002
 Mobile Equipment            USD (,000)  $24,906
 External Connections        USD (,000)  $3,924
 Box Cut                     USD (,000)  $1,324
 D&F                         USD (,000)  $5,522.7
 LHOS Stopping               USD (,000)  $2,823.6
 Initial Capital             USD (,000)  $152,446.1
 Contingency                 USD (,000)  $11,919.4
 Total Initial Capital       USD (,000)  $164,365.5
 LoM Sustaining Capital      USD (,000)  $96,889.3
 Closure Costs               USD (,000)  $6,000.0
 Total Capital               USD (,000)  $267,254.8

 

Operating Costs

Operating costs are summarized in Table 6 below. All costs are based on a
mining rate of 1.2Mtpa and relied on recent quotes from various vendors and
are similar to other mines in the region. On a zinc equivalent per pound
basis, Life of Mine C1 Cash Costs are estimated at US$0.67/lb and US$0.71/lb
on an all-in sustaining cost basis over the life of mine.

Table 6. Operating Costs

 Operating Costs                    Unit   Value
 Mining Costs
 D&F                                USD/t  25.24
 LHOS Stopping                      USD/t  17.72
 Processing Costs
 GOS - Gossan                       USD/t  15.58
 TMS - Transition Massive Sulphide  USD/t  13.71
 PMS - Fresh Massive Sulphide       USD/t  18.72
 Stringer                           USD/t  15.37
 Stock Work                         USD/t  15.37
 G&A Costs                          USD/t
 G&A Unit Costs                     USD/t  2.00

 

Production and Operating Cost Profile

The chart below highlights the expected production and AISC profile at Venda
Nova as per the FS. Production and cash flows are expected to be stronger in
the early years as the processing of the higher-grade massive sulphide and
gossan material is undertaken.

Production over the mine life is expected to average 77 million lbs. of Zinc
equivalent production per year but averages approximately 124 million lbs. of
Zinc equivalent production over the first five years.  Similarly, AISC will
average US$0.71/lb. per year and US$0.59/lb. over the first five years on a
ZnEq basis.

 

Figure 5. Production and AISC

 

Overall Project Economics

The Venda Nova project at Lagoa Salgada shows strong robust economics with a
Post-Tax after tax NPV at 8% discount rate of US$147 million and IRR of 39%
for a payback period of 2 years at long term consensus metal price
assumptions. Project economics are based on the current Proven and Probable
Reserves only for a mine life of 14.5 years and does not factor in the
upgrading of additional resources or potential future exploration success.

 

Table 7 Economic Summary

 Project Economic Summary            Unit        Value
 NPV (8%) Pre-Tax                    US$ Mln.    $189
 IRR Pre-Tax                         %           47%
 NPV (8%) Post-Tax                   US$ Mln.    $147
 IRR Post-Tax                        %           39.3%
 LoM Avg. Zinc Production            Mln. / Lbs  77.0
 LoM Zinc Concentrate Production     Tonnes      491,364.0
 LoM Copper Concentrate Production   Tonnes      108,110.1
 LoM Lead Concentrate Production     Tonnes      374,860.9
 LoM Tin Concentrate Production      Tonnes      17,573.9
 LoM Ag-Au Concentrate Production    Tonnes      183.7
 LoM AISC (Including Closure Costs)  US$/lb.     0.7
 Payback                             Years       2.0
 Zinc Price Assumption               US$/lb.     1.2
 Copper Price Assumption             US$/lb.     3.8
 Lead Price Assumption               US$/lb.     1.1
 Tin Price Assumption                US$/lb.     15.0
 Gold Price Assumption               US$/oz      1700.0
 Silver Price Assumption             US$/oz      22.5

 

The mine is expected to benefit from regional tax incentives in Portugal.
Contractual fiscal incentives for productive investment in Portugal offers a
validity period of up to 10 years for investment projects with relevant
expenditures amounting to €3,000,000 or more. The fiscal benefit corresponds
to 10% of the project's relevant expenditures, and this rate can be increased
based on factors like the location of the project and the creation of jobs.
The benefit takes the form of a tax credit deducted from the corporate income
tax liability. Additionally, there are provisions for exemptions or reductions
in municipal property tax, property transfer tax, and stamp duty.

These contractual fiscal incentives aim to attract productive investments,
boost economic growth, create employment opportunities, and support strategic
sectors in Portugal. The incentives provide companies with tax benefits, such
as tax credits, deductions, and exemptions, encouraging investment in various
sectors and regions.

In the case of Lagoa Salgada, the maximum tax benefit is determined by
considering the lower value between €24.75 million (Maximum regional aid
intensity applicable) or 15% of the initial investment. The application method
for this incentive involves a 50% reduction in income tax (equivalent to 21%
of the taxable income) until the maximum amount of tax benefit is attained.

The chart below demonstrates the robust free cash flow generation expected,
especially in the first five years of operation.  Cash flows during the first
five years of production are estimated to average US$56 million per annum.

 

Figure 6. Free Cash Flow

The chart below highlights the NPV sensitivity to changes in capital costs,
various input costs and Zinc price assumptions.

Figure 7. NPV Sensitivity

 

 

Optimization Opportunities

The completion of Feasibility study completes the requirements by Ascendant to
Earn an 80% ownership in the project as required under the Option Earn-In
agreement. The Company believes that with additional time now available, the
following near term optimization opportunities exist to further enhance the FS
prior to commencing development work over the next six months.  The Company's
initial focus will be as follows:

·     Optimize mine ore sequencing to maximize revenues in the initial
years.

·     Optimization of the mining and processing rate to optimize NPV and
IRR;

·     Undertake further metallurgical testwork on available material to
enhance metal recoveries above those already achieved in tests to date

On a longer-term basis, the company has identified additional areas to further
increase the value of the Lagao Salgada project such as;

·     Subject to new fresh drill core being available additional
metallurgical testwork could be undertaken to continue to enhance recoveries

·     Increase mineral reserves and resources to enhance the mine life or
support a larger scale operation via upgrading additional known resources to
the Proven and Probable categories and through new exploration to define
additional resources on the numerous follow up targets known on the property.

Venda Nova Initial Feasibility Study for Ascendant and Redcorp - Qualified
Persons

An NI 43-101 Technical Report supporting the DFS is being prepared by
Quadrante under the guidance of Mr. João Horta (M.Sc., MIMMM), who serves as
Project Director at QUADRANTE and is a "Qualified Person" in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Although the Qualified Person was not responsible for the completion of some
of the sections of the DFS, such as Geology, Mineral Processing and
Metallurgical, Mineral Resource, Reserve, Mining Methods, Recovery Methods,
TSF, Paste Fill, and Hydrogeological Study, the Qualified Person at Quadrante
has relied on the Qualified Persons listed below who are the specialists in
these fields for completion of their respective portions of the DFS.

The scientific and technical information contained in this release relating to
the Geology and Mineral Resource Estimate has been approved and verified by
Mr. Charley Murahwi (Msc, P.Geo., FAusIMM), Senior Economic Geologist with
Micon International Limited, who is a "Qualified Person" in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Sampling, analytical, and test data underlying the Mineral Resource Estimate
was also approved and verified by Mr. Charley Murahwi.

The Mineral Reserve calculation and the Mining Methods section was completed
by IGAN Ingenieria under the supervision of Mr. Pablo Gancedo Mínguez (CEng,
MIMMM), who is a "Qualified Person" in accordance with National Instrument
43-101 - Standards of Disclosure for Mineral Projects.

The Tailings Storage Facility (TSF) study was completed by SLR under the
supervision of Mr. David Ritchie (P.Eng, Principal Geotechnical Engineer at
SLR), who is a "Qualified Person" in accordance with National Instrument
43-101 - Standards of Disclosure for Mineral Projects.

Scientific and technical information contained in this release in relation to
metallurgical test work and the Recovery Methods section has been approved and
verified by Mr. David Castro López (MIMMM), who serves as Process Engineer at
Minepro Solutions and is a "Qualified Person" in accordance with National
Instrument 43-101 - Standards of Disclosure for Mineral Projects.

The Hydrogeological Study was completed by Dr. Rafael Fernández Rubio (PhD,
Specialist), which is a Special Consultant at FRASA and is a "Qualified
Person" in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects.

The Paste Fill study was completed by Mr. Frank Palkovits (P.Eng, B.Eng),
Pastefill Specialist at RMS and  a "Qualified Person" in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

Review of Technical Information

The scientific and technical information in this press release has been
reviewed and approved by Joao Barros, BSc (Engineering), MSc (Geology), who
has more than 17 years of relevant experience in the field of activity
concerned. Mr. Barros is a Member of the Portuguese Engineers Association. Mr.
Barros is employed by Redcorp Empreedimentos Mineiros, Lda., a 50% owned
subsidiary of M&FI, and has consented to the inclusion of the material in
the form and context in which it appears.

Summary of ownership of Redcorp and Lagoa Salgada Project

With the formal delivery of this Feasibility Study Ascendant will have
satisfied its obligation under the Earn-In Agreement to increase its ownership
to 80% of Redcorp, subject to closing documentation, all other conditions
being met. Redcorp currently owns 85% of the Lagoa Salgada project. In June
2017, Redcorp, then owned 100% by M&F, entered into an agreement with
Empresa Desenvolvimento Mineiro SA (EDM), a Portuguese state-owned company to
purchase the remaining 15%, which would have resulted in Redcorp owning 100%
interest in the project ("2017 Agreement"). However, as previously announced,
the 2017 Agreement was subject to Portuguese Secretary of State approval,
which has not been received. Redcorp and M&FI continue to pursue the
completion of this acquisition, with no certainty of success.

As part of the agreements with Ascendant, M&F has granted call options to
Ascendant for nil consideration over 12% of the ordinary shares in Redcorp
held by M&F ("Call Options") so that in the event that Redcorp/M&F is
unsuccessful in obtaining the completion of the 2017 Agreement, Ascendant will
be assured of a net 80% interest in the Lagoa Salgada Project. However, if
Redcorp/M&FI can secure 100% ownership of Lagoa Salgada then the Call
Options are cancelled. The Call Options can be exercised on the date being 6
months after the date on which Ascendant increases its ownership of Redcorp to
80% or immediately if EDM elect to participate in the Project.  If the other
conditions set out in this announcement are satisfied, and if the call option
was exercised, M&FI's carried interest in Lagoa Salgada would decrease
from 20% to 5%.

As part of this arrangement, M&FI and Ascendant have also amended the
terms of the shareholders agreement made between (1) Ascendant; (ii) M&FI;
and (iii) Redcorp in relation to the Project, to provide the following:

a)    M&FI shall have the right and option, but not the obligation, to
exercise an option within 6 months (plus 10 business days) of the Stage Two
Option Exercise Date (being the date when Ascendant has earned 80% of Redcorp
and being no later than June 22, 2023 - Amended to no later than August 3,
2023) to require Ascendant to purchase all, but not less than all, of the
shares in Redcorp at a defined price.

b)    The price would be an amount in US dollars, payable in cash, equal to
5% of the post-tax net present value of the Project provided in the
feasibility study completed prior to the date of exercise using a 10.5%
discount rate (the "Put Option").

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service (RIS), this inside information
is now considered to be in the public domain.

 

FOR MORE INFORMATION:

Jacques Vaillancourt, Mineral & Financial Investments
Ltd.                        +44 780 226 8247

Katy Mitchell and Sarah Mather, WH Ireland Limited
            +44 207 220 1666

Jon Belliss, Novum Securities
Limited
            +44 207 382 8300

 

 

 

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