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8-K - CURRENT REPORT - SOLITARIO ZINC CORP. | slr_8k.htm |
Exhibit
99.1
Solitario Reports Significant Increase in Inferred Sulfide
Resources
For Its Florida Canyon Zinc Project
●
Inferred
zinc-equivalent (“Zn-Eq”) sulfide resource up 105% from
2017 estimate.
●
Inferred
Zn-Eq sulfide-mixed-oxide resource estimate up 64% from 2017
estimate.
●
Total
contained metal - Measured and Indicated: 0.65 billion pounds
Zn-Eq.
●
Total
contained metal – Inferred: 3.39 billion pounds Zn-Eq at
10.9% Zn-Eq.
●
Total
contained silver – Inferred: 5.39 million oz.; Meas. &
Ind: 1.2 million oz.
DENVER, CO – February 23, 2021 - Solitario Zinc Corp.
(“Solitario”) (NYSE American: XPL; TSX: SLR) is pleased to report a significant
Mineral Resource increase for its high-grade Florida Canyon zinc
project in northern Peru. Solitario’s joint venture partner,
Nexa Resources S.A. (NYSE: NEXA; TSX: NEXA) (“Nexa”),
completed a new resource estimate incorporating the results of the
2018/2019 drilling program and reinterpreting portions of the
previous resource model. Solitario, through the work of an
independent third-party consultant, has verified Nexa’s
resource estimate. Solitario will issue a new NI-43-101 compliant
resource report before the end of March. Nexa is the world’s
fourth largest zinc miner and operates three underground zinc mines
and a major zinc smelter in Peru and two zinc mines and two zinc
smelters in Brazil.
The
2021 Mineral Resource Estimate is a mine plan constrained resource
that takes into consideration various NSR cutoff grades, depending
on mining method. All 2021 additions to the resource were in the
Inferred Resource Category. The table below provides summary
estimates for all resource categories.
2021 Florida Canyon Mineral Resource Estimate
Category
|
Tonnes
Millions
|
Zinc
%
|
Lead
%
|
Silver
g/t
|
ZnEq
%
|
Contained Metal
Zinc-Equivalent
Billion Lbs.
|
Contained Silver
Million Ozs.
|
Measured
|
0.81
|
11.32
|
1.40
|
15.4
|
12.78
|
0.29
|
0.40
|
Indicated
|
1.63
|
10.28
|
1.31
|
14.9
|
11.66
|
0.42
|
0.78
|
M + I
|
2.44
|
10.63
|
1.34
|
15.05
|
12.04
|
0.65
|
1.18
|
Inferred
|
14.86
|
9.63
|
1.26
|
11.3
|
10.89
|
3.57
|
5.39
|
Notes to Mineral Resource Table:
1. CIM
(2014) definitions were followed for Mineral
Resources.
2.
Mineral Resources have an effective date as of February 2,
2021.
3.
Mineral Resources are reported using mining cut off values of
US$41.40/t NSR for Sub-Level Stoping, US$42.93/t for Cut and Fill
and US$40.61/t for Room and Pillar mining methods.
4.
Forecast long term metal prices used for the NSR and Zn-Eq
calculations are: Zn: US$2,816/t (US$1.27/lb); Pb: US$ 2,249/t
(US$1.02/lb) and Ag: US$19.40/oz. Zn-Eq calculations do not take
into account metallurgical recoveries.
5.
Minimum mining thickness is 3 meters for Sub-Level Stoping and Cut
and Fill, and 4 meters for Room and Pillar mining
methods.
6.
Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.
7.
Project Resources are reported on a 100% ownership
basis.
8.
Numbers may not add due to rounding.
Overall Inferred Resource Increase, 2021
Mineralization
at Florida Canyon consists of zinc, lead and silver contained in
sulfide minerals, oxide minerals and mixed sulfide-oxide
mineralization. Overall, contained Zn-Eq metal in the 2021 Inferred
Resource, including all ore types, increased 64% compared to the
2017 resource estimate - from 8.8 million ore tonnes at 11.8% Zinc
Equivalent (“Zn-Eq”) to 14.9 million tonnes at 10.9%
Zn-Eq, with an expansion of more than 6.0 million
tonnes.
Inferred Sulfide Resource Doubles
The
2018/2019 drilling program was specifically designed to identify
new NI-43-101 compliant sulfide resources at Florida Canyon. This
objective was achieved with an overall 105% gain in Inferred Zn-Eq
contained metal in sulfide resources compared to the 2017 Inferred
Zn-Eq sulfide resource estimate. A comparison of the contained
Zn-Eq metal in the inferred sulfide resource in the 2017 estimate
versus the 2021 estimate, results in the following
increase:
●
In
the 2017 Inferred Resource Estimate, 59% of the Zn-Eq resources
were sulfide
●
In
the 2021 Inferred Resource Estimate, 78% of the Zn-Eq resources are
sulfide
Why is Sulfide Mineralization Important?
The
2017 Preliminary Economic Assessment (“PEA” see SEDAR
Filing dated August 8, 2017) demonstrated that mining and
processing of Florida Canyon sulfide resources are much more
profitable than for oxide and mixed resources. Cash flow estimates
in the PEA for its 12.5-year mine life, based on the 2017 resource,
illustrated that years 2-7 (mostly sulfide ore) generated
approximately $75 million in annual free cash flow, while years
8-12 (mostly oxide+mixed ore) averaged approximately $30 million in
annual free cash flow.
In
addition to an increased mine life and cash flow, the current,
larger resource will also provide the opportunity to assess
increasing the production rate from the 2,500 tonnes per day
assumed in the PEA, further improving project
profitability.
Chris
Herald, President and Chief Executive Officer of Solitario,
commented:
“The
new 2021 Resource Estimate exceeded our most optimistic
expectations. With strong zinc demand, a robust $1.30 per pound
current zinc price, and future world-wide stimulus infrastructure
spending, we view this significant resource addition as providing
further underlying asset value to our shareholders.
Exceptional
potential to significantly expand the Florida Canyon mineralized
system still exists, particularly immediately to the south and east
of the current drilling footprint, where several new surface
prospects have been recently discovered, demonstrating two parallel
north-south corridors in excess of four-kilometers in length, with
virtually no drilling. Additionally, mineralization is open to the
North and potentially to the West where no drill tests have been
conducted beyond an offsetting fault. Other important undrilled
prospects, defined by geochemistry and geologic setting, are
located even further north on the property.
The
results of the 2018/2019 Florida Canyon drilling program were very
successful in achieving our three most important near-term
objectives: 1) expanding the steeply dipping San Jorge deposit to
the south of previously reported resources and expanding its
associated high-grade horizontal mantos to the east; 2) discovering
and partially defining the new 1021 Zone in the north central part
of the previously drilled footprint over a minimum strike length of
800 meters; and 3) extending a number of horizontal mantos
throughout the drilling footprint.
We want
to congratulate Nexa for their hard work and commitment in
advancing the Florida Canyon project. We are impressed with
Nexa’s strong social commitment to the communities
surrounding the property, including a significant program of local
employment and ongoing road-building efforts to better connect
communities to each other and the greater regional transportation
network.”
Exploration Potential | Planned Activities
Several
exploratory targets have been identified immediately south, north,
east and west of the Florida Canyon deposit with mineralized
outcrops, as shown in Figure 1. The targets to the south appear to
be extensions to the Florida Canyon mineralized corridor. Drill
testing some of these satellite targets is planned as they have the
potential to significantly increase the mineral resource at the
Florida Canyon Project.
Figure
1. Regional Exploration Prospects, Florida Canyon
Property
All
technical information which is included in this statement has been
reviewed and approved by Donald E. Hulse, VP Mining of Gustavson
Associates LLC. Mr. Hulse is independent of the Company and a
qualified person, pursuant to the meaning of such terms in National
Instrument 43-101 Standards of Disclosure for Mineral
Projects.
Information
contained within this release is reported under Nexa’s
quality control program reviewed by Mr. Walt Hunt, COO for
Solitario Zinc Corp., who is a qualified person as defined by
National Instrument 43-101.
Background Information on Florida Canyon
The
Florida Canyon resource is located within 16 contiguous mining
concessions covering approximately 12,600 ha (31,100 acres). All of
these concessions are currently titled. Surrounding the Florida
Canyon resource area concessions are an additional 37 contiguous
concessions covering approximately 27,900 hectares (68,940 acres)
that are held within the Chambara joint venture with
Nexa.
The
Florida Canyon deposits are “Mississippi Valley” type
where the zinc, lead, silver mineralization is associated with
hydrothermal dolomitized zones. High energy facies of the original
limestones belonging to the Chambara Formation of Upper
Triassic-Lower Jurassic age, are characterized by high porosity and
permeability. These lithologies were subsequently altered by
dolomitization, further enhancing porosity and permeability,
providing a favorable environment for the deposition of zinc
mineralization within these preferred stratigraphic horizons (Manto
style ore).
A
second, and potentially more important style of mineralization, are
near-vertical ore bodies such as the San Jorge and 1021 zones.
These larger zones are controlled by structures and can be
high-grade. Figure 2 is a schematic cross section of a vertical
replacement zone and associated near-horizonal manto zones. Figure
3 is a simplified map of the Florida Canyon deposits illustrating
the distribution of mantos and steeply dipping feeders (replacement
deposits).
Figure 2.
Schematic Cross Section
Figure
3. Distribution of Ore Zones
Terms of the Florida Canyon Joint Venture
Solitario
owns a 39% interest and Nexa owns a 61% indirect interest in the
Florida Canyon project. Nexa can earn a 70% interest in the Florida
Canyon project by continuing to fund all project expenditures and
committing to place the project into production based upon a
positive feasibility study. After earning 70%, and at the request
of Solitario, Nexa has further agreed to finance Solitario's 30%
participating interest for construction through a project loan.
Solitario will repay the loan facility through 50% of its net cash
flow distributions from production.
About Solitario
Solitario
is an emerging zinc exploration and development company traded on
the NYSE American (“XPL”) and on the Toronto Stock
Exchange (“SLR”). Solitario holds 50% joint venture
interest in the high-grade, open-pittable Lik zinc deposit in
Alaska and a 39% joint venture interest (Nexa Resources holds the
remaining 61% interest) on the high-grade Florida Canyon zinc
project in Peru. Solitario recently acquired the early stage Gold
Coin property in Arizona that has potential to host gold
mineralization. Solitario’s Management and Directors hold
approximately 9.6% (excluding options) of the Company’s 58.2
million shares outstanding. Solitario’s cash balance and
marketable securities stand at approximately US$7.9 million.
Additional information about Solitario is available online at
www.solitariozinc.com
FOR
MORE INFORMATION ABOUT SOLITARIO, CONTACT:
Valerie
Kimball
Director
– Investor Relations
(720)
933-1150
(800)
229-6827
|
Christopher
E. Herald
President
& CEO
(303)
534-1030, Ext. 14
|
Cautionary Statement Regarding Forward Looking
Information
This press release contains forward-looking statements within the
meaning of the U.S. Securities Act of 1933 and the U.S. Securities
Exchange Act of 1934, and as defined in the United States Private
Securities Litigation Reform Act of 1995 (and the equivalent under
Canadian securities laws), that are intended to be
covered by the safe harbor created by such sections.
Forward-looking statements are statements that are not historical
fact. They are based on the beliefs, estimates and opinions of the
Company's management on the date the statements are made and
address activities, events or developments that Solitario expects
or anticipates will or may occur in the future, and are based on
current expectations and assumptions. Forward-looking statements
involve a number of risks and uncertainties. Consequently, there
can be no assurances that such statements will prove to be accurate
and actual results and future events could differ materially from
those anticipated in such statements. Such forward-looking
statements include, without limitation, statements regarding the
Company’s expectation of the projected timing and outcome of
engineering studies; expectations regarding the receipt of all
necessary permits and approvals to implement a mining plan, if any,
at Lik or Florida Canyon; the potential for confirming, upgrading
and expanding zinc, lead and silver mineralized material; future
operating and capital cost estimates may indicate that the stated
resources may not be economic; estimates of zinc, lead and silver
grades of resources provided are predicted and actual mining grade
could be substantially lower; estimates of recovery rates for could
be lower than estimated for establishing the cutoff grade; and
other statements that are not historical facts could vary
significantly from assumptions made in the Resources Estimate.
Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. Although Solitario management
believes that its expectations are based on reasonable assumptions,
it can give no assurance that these expectations will prove
correct. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include, among others, risks relating to risks that
Solitario’s and its joint venture partners’ exploration
and property advancement efforts will not be successful; risks
relating to fluctuations in the price of zinc, lead and silver; the
inherently hazardous nature of mining-related activities;
uncertainties concerning reserve and resource estimates;
availability of outside contractors, and other activities;
uncertainties relating to obtaining approvals and permits from
governmental regulatory authorities; the possibility that
environmental laws and regulations will change over time and become
even more restrictive; and availability and timing of capital for
financing the Company’s exploration and development
activities, including uncertainty of being able to raise capital on
favorable terms or at all; as well as those factors discussed in
Solitario’s filings with the U.S. Securities and Exchange
Commission (the “SEC”)
including Solitario’s latest Annual Report on Form 10-K and
its other SEC filings (and Canadian filings) including, without
limitation, its latest Quarterly Report on Form 10-Q. The Company
does not intend to publicly update any forward-looking statements,
whether as a result of new information, future events, or
otherwise, except as may be required under applicable securities
laws.