31 May 2016 07:00
MINCO plc
MINCO REPORTS FINANCIAL RESULTS FOR FIRST QUARTER OF 2016
Toronto, 30 May 2016 - Minco Plc (AIM - "MIO") reports its interim financial results and development activities for the three month period ended March 31, 2016.
This news release should be read in conjunction with the Company's unaudited financial statements for the quarter ended March 31, 2016 and the related management's discussion and analysis (MD&A) which are available on the Company's website at www.mincoplc.com, under the "Financials" section, or under the Company's profile on SEDAR (www.sedar.com).
Financial Results for First Quarter of 2016
For the three month period ended March 31, 2016, the Company recorded a loss of $426,000 compared to a profit of $482,000 for the same period ended March 31, 2015. The loss for the three month period ended March 31, 2016 included a foreign exchange loss of $159,000, compared to a profit of $665,000 for the quarter ended March 31, 2015.
Administrative expenses, excluding foreign exchange, for the three month period ended March 31, 2016 amounted to $281,000 compared to $203,000 in 2015, the main component of the increase in 2016 is due to higher professional and legal fees of $150,000 compared to $68,000 in 2015.
During the three month period ended March 31, 2016 Minco invested $133,000 on exploration of its mineral properties, of which the largest amounts were expended on the Buchans zinc lead exploration project in central Newfoundland.
At March 31, 2016, Minco held $3,578,000 in cash and cash equivalents and had a working capital surplus of $3,238,000, compared to a working capital surplus of $3,618,000 at December 31, 2015.
At March 31, 2016, Minco held mineral properties with a book value of $13,301,000. The balance sheet values for these assets may not represent that which could be obtained if the assets were to be offered for sale.
BUCHANS LEAD-ZINC EXPLORATION
Minco's ongoing re-logging program of historic drill holes to assess the potential for discovery of new high-grade resources on its central Newfoundland zinc/lead exploration properties continues to assess targets focused on an area 200 metres southwest of the former Lucky Strike mine, near the former West Orebody deposit. This program is expected to dominate field activities in Buchans for the remainder of 2016.
Since 2015, Minco has largely focused its exploration efforts within an area immediately south of the former Lucky Strike mine to explore for new high-grade resources that may positively impact open pit and underground development of the Company's Lundberg deposit. Diamond drilling undertaken by Minco in 2015 south of the former Lucky Strike mine intersected widespread mineralization comprised of massive sulphide fragments or ore clasts, including 0.5 metres averaging 13.32% combined base metals (i.e., Cu%+Pb%+Zn%) as 1.80% Cu, 5.20% Pb, 6.32% Zn, 53.3 g/t Ag, and 0.18 g/t Au in hole H-15-3493, as well as 1.0 metre averaging 6.16% combined base metals as 0.35% Cu, 1.72% Pb, 4.10% Zn, 63.4 g/t Ag, and 0.27 g/t Au in hole H-15-3497.
This West Orebody deposit was discovered in 1940 at 300 metres depth and consisted of a cluster of small but high-grade massive sulphide lenses. The deposit was mined during the mid-1940's as a satellite to the Lucky Strike orebody, and is believed to have produced less than 100,000 tonnes of ore. The deposit has not been a focus of exploration since the 1940s.
Minco's relogging confirmed the West Orebody deposit remains underexplored by short, historic underground drilling and a few widely-spaced surface holes. Minco further believes this mineralization may be associated with a controlling structure or mineralized trend that was active during formation of the Lucky Strike and West Orebody deposits, and that this trend represents a priority exploration target for the discovery of new high-grade massive sulphides. Minco is currently planning a five hole, 2,000 metre drilling program to explore this target in winter 2016/2017.
In April 2016, Minco received $100,000 in grants from the government of Newfoundland and Labrador's Junior Exploration Assistance (JEA) program in support of its Lucky Strike South drilling undertaken in 2015. Minco acknowledges this financial support from the Government of Newfoundland and Labrador and intends to seek additional grant funding under the 2016-17 JEA program.
METALLURGICAL STUDIES - CENTRAL NEWFOUNDLAND BASE METAL PROJECTS
In December 2015, through its wholly owned subsidiary Buchans Minerals Corporation ("Buchans Minerals), Minco entered into a collaboration agreement with Canadian Zinc Corporation (TSX:CZN) ("Canadian Zinc") to undertake a research programme to complete physical and metallurgical bench scale studies on seven volcanogenic massive sulphide ("VMS") deposits located in the Victoria Lake district of central Newfoundland and to share research data on their respective central Newfoundland Cu-Pb-Zn-Ag-Ag deposits. The total cost of the research project is estimated at $735,000 with Buchans Minerals and Canadian Zinc providing up to $100,000 and $535,000 funded through the Research & Development Corporation of Newfoundland and Labrador ("RDC") GeoEXPLORE Industry-led R & D Technology Development and Demonstration Program.
To date the program has conducted mineralogical assessments, grindability tests and DMS tests and is now conducting bench scale flotation tests. Preliminary results indicate that:
· Pre-concentration of the ore by DMS (prior to flotation) has been determined to be technically viable for semi-massive and stringer sulphide samples from the Boomerang-Domino, Lemarchant, Long Lake, Bobbys Pond and Daniels Pond deposits.
· Initial flotation tests indicate the deposits are amenable to a common flotation flowsheet with the sequential Cu-Pb-Zn flotation flowsheet providing the best overall performance for all four deposits tested. Further development of the sequential flotation by bench scale testing is in progress.
Once the bench scale testing program is completed it will be followed-up by the development of a process simulation and order of magnitude cost assessment model to evaluate and identify the key factors impacting the operating economics of a centralized milling concept for processing of the base metal deposits.
Results from the simulation modelling will be used to help optimize the exploration and development budgets, by focusing on the key factors that are critical to assessing the economic potential and viability of developing some of the deposits through a central milling facility.
LEAD-ZINC EXPLORATION, MOATE, COUNTY WESTMEATH, IRELAND
In November 2015 Minco was granted three new Prospecting Licences at Moate in County Westmeath, Ireland, centered on a specific geological target identified by Minco, with potential for zinc-lead mineralization of Tynagh Mine type.
Minco's new Moate licences are located along the northwestern margin of the Irish Midland Orefield on the "Tynagh-Ballinalack Trend. The Moate target lies mid-way between the former Tynagh Mine, located 50 kilometres to the southwest, and the similar styled Ballinalack deposit, situated 35 kilometres to the northeast. The Tynagh Mine operated successfully from 1965 to 1981 producing 9,000,000 tonnes of ore, from both open pit and underground, at average grades of approximately 7% lead, 5.5% zinc, 0.5% copper and 2.6 ounces of silver per tonne.
Minco's studies of previous drilling have outlined a geological setting that Minco believes mirrors that at the former Tynagh Mine, where zinc-lead mineralization was hosted by breccias developed at the margin between the reef and off-reef limestone facies. The geology at Moate is also comparable to that at the smaller Ballinalack deposit.
Minco has planned an initial exploration programme consisting of six inclined drill holes for a total of 1400 metres of drilling.
ABOUT MINCO PLC
Minco Plc, incorporated in the Republic of Ireland and listed on the AIM Market of the London Stock Exchange ("MIO"), is an exploration and development company currently engaged in zinc-lead exploration in Canada, the United Kingdom and Ireland, and is also evaluating its Woodstock manganese project in New Brunswick, Canada.
Minco also holds an approximate 26% shareholding in Xtierra Inc., (TSXV- "XAG"), which holds mineral properties in Mexico, and a 2% NSR royalty on the Curraghinalt gold property in Northern Ireland, currently being explored by Dalradian Resources Inc. (TSX-"DNA").
Danesh Varma: CFO & Company Secretary +44 (0) 8452 606 034
Peter McParland: Director - Ireland +353 (0) 46 907 3709
Peter Tyler: Chief Geologist - Ireland and UK +44 (0) 78 5432 3056
Warren MacLeod: Director, President Buchans Minerals +1 709 725 0555
John Frain: Davy (NOMAD) +353 (0)1 6796363
Saif Janjua: (Corporate Advisor) (Broker, Beaufort Securities) +44 (0) 20 7382 8415