REG - Hochschild MiningPLC - Significant Increase in Mineral Resources at Snip

Hochschild MiningAnnouncement

01/03/2022 07:16

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RNS Number : 1688D  Hochschild Mining PLC  01 March 2022

 

________________________________________________________________________________________

 1 March 2022

 

Significant increase in mineral resources at Snip

 

Hochschild Mining PLC ("Hochschild" or "the Company") is pleased to announce
an updated Mineral Resource Estimate ("MRE") for the Snip Gold Project ("Snip"
or the "Project"), located in the Golden Triangle and in Tahltan Territory, of
northwest British Columbia, Canada. Under the terms of its agreement with
Skeena Resources Limited ("Skeena"), Hochschild is in the process of
earning-in 60% of Skeena's interest in the Project and is the manager of
operations. This represents the first MRE released by Hochschild with respect
to the Project and follows the MRE prepared by Skeena in July 2020.

 

Ignacio Bustamante, Chief Executive Officer said:

"We are excited to be issuing an updated mineral resource estimate which
reflects not only the 28,000 metres of drilling but also the application of
Hochschild's standard approach to resource evaluation. Estimated indicated
mineral resources have more than tripled while inferred resources have almost
doubled compared to the 2020 estimate with grades at more than 10 grams per
tonne. These results validate our decision to exercise the option to start
earning-into the project and provide encouragement for the 2022 drill
programme, which began earlier this month.

 

A Pre-Feasibility Study is expected to be completed by the end of the year. We
would like to express our gratitude for the support we have received from the
Tahltan Nation, the British Columbia Government, employees, contractors and
suppliers during this initial period of transition."

 

Mineral Resource Estimate

The mineral resource estimate for the Snip Gold Project is reported at a 3.0
g/t Au cut-off in Table 1 and is effective as of 28 February 2022.

Table 1. Mineral Resource Estimate of the Snip Gold Project (see notes at the
end of the release)

                              Domain     Tonnes  Contained Grade Au (g/t)  Contained Metal   Au (000 oz)

                                         (000)
 Indicated Mineral Resources
                              Twin Main  2,383   10.6                      810
                              Twin West  117     7.8                       30
 Total Indicated                         2,500   10.4                      840
 Inferred Mineral Resources
                              Twin Main  1,852   10.5                      623
                              Twin West  332     9.4                       100
 Total Inferred                          2,184   10.3                      723

 

The mineral resource update follows a drilling programme of 210 surface and
underground diamond drill holes totaling 28,039m (see Table 2 and Figure 1).
The MRE was completed by Hochschild and was reviewed and validated by Ginto
Consulting Inc. ("Ginto").

Table 2. Summary of drilling campaigns

 Programme   Year      No. of Holes  Length (m)
 Historical  pre-1999  3,542         279,970
 Skeena      2016      28            7,422
             2017      62            8,703
             2018      54            11,298
             2019      9             1,902
             2020      9             4,542
             2021      201           23,497
 Note: The table shows only drillholes with complete laboratory results as of
 15 January 2022

 

The geology model consisted of a model of gold mineralisation of the Twin and
Twin West zones, as well as a model of the Biotite Spotted Unit ("BSU") that
intrudes the mineralisation of the Twin Zone. The BSU was modeled as a barren
dyke, which overprints the mineralized Twin Zone. Mineralized shear zones and
mineralized vein intercepts were modeled in Leapfrog Geo® using the vein
modeling tool at a 1.0 g/t Au threshold. The resulting model is composed of
three main domains divided in 92 sub-domains.

 

Original gold assays were capped for high-grade outliers and then composited
to 1.5m intervals. Basic statistics were performed on the main domains and it
was observed that the gold grade populations of the high-grade domains were
well behaved with coefficients of variation below 3.0. A variographic analysis
was then carried out for each of the main domains in order to assess the
continuity of the gold mineralisation. Greater gold grade continuity was noted
to be along strike and down plunge.

 

Two block models were used to define the MRE of the Twin and Twin West zones.
The block models are both orthogonal and defined on a 4m (X) x 4m (Y) x 6m (Z)
parent block size, sub-blocked to 0.5m (X) x 0.5m (Y) x 0.5m (Z). Ordinary
kriging was the grade interpolation method utilized to estimate gold grades
with a search ellipsoid based on the variogram models. A set of 3 passes with
increasing search sizes, and restrictions on the maximum number of composites
per hole and the maximum number of composites per quadrant were part of the
grade estimation strategy. The gold grade estimates were then assessed with
various validation tests to ascertain the quality of the resulting estimates.

 

The mineral resource was first classified into indicated and inferred
categories, based on the distance of the composites and the number of holes. A
40m buffer was drawn around the more recent holes, drilled from 2016 to 2021,
where a minimum of 2 recent holes within the buffer were needed for the
classification to remain as indicated. If this condition was not met, any
originally defined indicated resources were downgraded to inferred. A final
process consisted of smoothing the shapes of the indicated and inferred
categories in order to provide a more continuous definition of the
classification categories. The MRE was then depleted of the mined-out
underground voids increased by a 1m surrounding buffer.

 

In order to conform to the "reasonable prospects of economic extraction"
requirement of NI 43-101, all underground mineral resources not contiguous to
the main deposit ("isolated blocks") were removed, and the remaining mineral
resources were reported within the constraining shapes of the mineralized
lodes at the economic cut-off grade of 3.0 g/t Au.  Mineral resources in
Skeena's 21 July 2020 MRE were reported at an economic cut-off grade of 2.5
g/t Au, contained within stope shapes.

 

Mineralisation

Most of the Snip deposit is hosted within a complex interbedded sequence of
siltstone and greywacke units. The gold mineralisation is associated with
several periods of deformation and syn-tectonic quartz and sulphide veining.
Four types of gold mineralisation are recognized on the property: carbonate
type, chlorite-biotite type, sulphide type, and quartz type.

 

A large portion of the gold mineralisation at Snip is found within the Twin
Zone, an extensional shear vein system approximately trending east-west and
dipping to the south at an average dip varying between 40° and 50°. The
shear is intruded by a barren, post mineralisation mafic dyke, the Biotite
Spotted Unit ("BSU") which divides the Twin Zone into two parts for most of
its length. Veins in the hanging wall are termed V-veins while those in the
footwall are S-veins. The other drill defined mineralized zone on the property
is the Twin West Zone, located approximately 500m southwest of the Twin Zone.
It is believed to be the continuation of the Twin Zone dextrally displaced by
the northeasterly Monsoon Valley fault.

 

Figure 1. Drill Hole Location Map

http://www.rns-pdf.londonstockexchange.com/rns/1688D_1-2022-3-1.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1688D_1-2022-3-1.pdf)

 

2022 plans

In 2022, Hochschild plans on drilling approximately 10,000 metres from
underground with approximately 70% of planned metres for infill and twin
holes, and 30% for exploration.

 

A Pre-Feasibility Study will be undertaken during the year, using existing
resources and results from the 2022 programme, to trade-off a series of mining
and mineral processing opportunities identified at the project, and assess a
potential project development route to move to a Feasibility Study.

 

Qualified Persons

The Independent and Qualified Person for the Snip MRE is Mr. Marc Jutras
P.Eng., M.A.Sc., Principal, Mineral Resources, Ginto Consulting Inc. of
Vancouver, Canada, who has reviewed, validated and approved the Snip MRE as
well as the technical disclosure in this release. In accordance with National
Instrument 43-101 Standards of Disclosure for Mineral Projects.

 

Terms of the option

In September 2018, Skeena granted Hochschild an option (the "HOC Option") to
earn a 60% interest in Snip over three years by spending twice the amount
Skeena had spent since it originally optioned the property from Barrick in
March 2016. Up until the exercise of the option, Skeena estimated that it had
incurred approximately C$50 million of expenditure on the project. The
exercise of the HOC Option was also subject to the following terms:

 

·      Hochschild must incur no less than C$7.5 million in exploration
or development expenditures on Snip in each year of the Option Period (which,
provided that Hochschild has incurred at least C$22.5 million on the project,
can be extended by a further year on payment of US$1 million to Skeena);

·      On complying with the above, Hochschild must provide 60% of the
financial assurance required by governmental authorities for the Snip mining
properties; and

·      Hochschild can terminate the HOC Option at any time (with no
liability to complete the aggregate spending requirement), but must make a
cash payment for any shortfall in the minimum annual spend (or pro-rated
minimum annual spend if terminated after the first anniversary of the notice
exercising the HOC Option)

·      The initial expenditure requirements of Skeena's agreement with
Barrick Gold Inc. ("Barrick") were satisfied by Skeena in July 2017, at which
time Skeena exercised its right to acquire all of Barrick's "right, title and
interest in and to the Property and the Permits", subject to the retention by
Barrick of a 51% Back-In Right exercisable upon definition of a Mineral
Resource, or extraction from the property, of 2 million ounces of contained
gold or gold equivalent and a 1% NSR Royalty. The Back-In Right is exercisable
by Barrick on payment, to Skeena, of an amount equivalent to three times of
the cumulative expenditure on the Project.

 

Notes to Table 1

1.  These mineral resources are not mineral reserves as they do not
have demonstrated economic viability.

2.  The mineral resources were carried out in accordance with the standards
of the Joint Ore Reserves Committee of the Australian Institute of Mining and
Metallurgy ("JORC" code 2012), the National Instrument 43-101 ("NI 43-101"
code 2014) and the Canadian Institute of Mining and Metallurgy ("CIM") Best
Practices Guidelines (2019).

3.  A site visit was carried out by Mr. Marc Jutras, P.Eng., M.A.Sc.,
Principal, Mineral Resources, at Ginto Consulting Inc. between September 8 and
September 11, 2021

4.
 Results are presented in situ and undiluted and considered to have reasonable prospects for economic extraction.

5.  The mineral resource estimate is reported for an
underground scenario at a cut-off grade of 3.0 g/t. The cut-off grade
was calculated using a gold price of US$ 1,800/oz, mining cost of US$97.20/t,
processing cost of US$25.00/t; G&A cost of US$ 24.70/t, metal recovery of
90%, selling cost of US$ 90.00/oz, and a royalty cost of US$18.00/oz

6.  The number of tonnes and ounces were rounded to the nearest
thousand.

7.   Neither the Company, nor Ginto, is aware of any known environmental,
permitting, legal, title-related, taxation, socio-political or marketing
issues, or any other relevant issues not reported that could materially affect
the mineral resource estimate.

8.  The mineral resource estimates are in total for the property and have
not been adjusted to reflect the proportion attributable to Hochschild on the
basis of their joint venture participation.

 

________________________________________________________________________________________

 

Enquiries:

 

Hochschild Mining PLC

Charles Gordon
              +44 (0)20 3709 3264

Head of Investor Relations

 

Hudson Sandler

Charlie
Jack
                   +44 (0)207 796 4133

Public Relations

________________________________________________________________________________________

 

About Hochschild Mining PLC

Hochschild Mining PLC is a leading precious metals company listed on the
London Stock Exchange (HOCM.L / HOC LN) with a primary focus on the
exploration, mining, processing and sale of silver and gold. Hochschild has
over fifty years' experience in the mining of precious metal epithermal vein
deposits and currently operates three underground epithermal vein mines, two
located in southern Peru and one in southern Argentina. Hochschild also has
numerous long-term projects throughout the Americas.

________________________________________________________________________________________

 

LEI: 549300JK10TVQ3CCJQ89

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