Greg Jones: Variscan Mines

ONE OFF THE WOOD: Francophile VMS exploration play Variscan Mines (ASX: VAR) watched its share price run rampant this week after it announced initial assays of historic drill core from the company’s Porte-aux-Moines volcanogenic massive sulphide (VMS) deposit in Brittany, France.

High-grade intersections from the first hole (PAM5) included:

31 metres at 10.4 per cent zinc, 2.1 per cent lead, 1.2 per cent copper, 105.5 grams per tonne silver, 1g/t gold from 236m (zinc equivalence of 19.6 per cent).

 

The assays also included very high-grade zinc equivalent intercepts in excess of 25 per cent within the broader mineralised zones including:

8m at 25 per cent zinc, 5.4 per cent lead, 1.6 per cent copper, 208.5g/t silver, 1.39g/t gold from 236m (zinc equivalence of 41.5 per cent).

Variscan’s managing director Greg Jones dropped by The Roadhouse to provide the lowdown on what’s happening.

Resources Roadhouse: You caused a bit of a commotion with your announcement this week. You appear to have an excellent project in your Porte-aux-Moines deposit, but could it also be an indication that zinc has ‘arrived’?

Greg Jones: I think it could. The prognosis for zinc in the future is pretty strong. There are supply issues ahead with the upcoming closure of some large zinc mines, such as Century, so there is a sense there could be a lack of zinc availability.

People are starting to look at the fundamentals and are coming to the realisation that an improvement in the zinc price is definitely on the cards.

RR: So the closure of Century and other zinc mines means the market will be looking for other zinc opportunities to fill the impending void?

GJ: That’s right. And when you look around there are not really a lot of high-grade, high-quality zinc deposits ready to come on stream to replace them.

That’s the other side of the story; that zinc is common, but to fill that emerging gap requires some fairly decent production sources not all that evident at this stage.

RR: That segways nicely into speaking about the Porte-aux-Moines project. From what I can see it’s not a new project by any means?

GJ: The Porte-aux-Moines project has been around for some time. It was discovered by the BRGM (Bureau de Recherches Géologiques et Minières – the French geological survey) in the mid-1970s.

They worked on in up until the mid-1980s, completing around 9,700 metres of drilling and some two kilometres of underground development.

They never did any actual stope mining, however they did carry out a good amount of metallurgical work, resources estimation work, and underground drilling – getting it prepared to hand over to a French mining company.

That’s how they used to work, the BRGM was the French Government-owned exploration arm. They would do the exploration work, find a deposit and eventually hand it over to a government-owned mining company.

 

RR: So how did the project come to Variscan and not a French-owned company?

GJ: We visited France in 2010, looking at different projects. We approached the BRGM and asked about mineral mines and exploration licences, but there were none to be had.

However we did like the geology of the region and thought it looked quite prospective, especially for the deposit styles we were interested in.

It became clear that although the potential was good, exploration activity had stopped as the government had decided in the 1980s to basically close down its mining industry.

So after reviewing the mining laws and political situation and defining some good advanced projects we decided to establish a French subsidiary and put together French team of experienced geologists to apply for exploration licences in the country.

RR: In a sense that seems to have worked in Variscan’s favour, because it wasn’t because the project wasn’t up to scratch that it wasn’t mined way back then, but because they closed it all down?

GJ: That’s right, which meant the project remained with the BRGM and couldn’t be transferred and they don’t have the mandate to mine. So it sat there for a couple of decades until we came along and made the application over the region for base metals deposits.

We then gained ownership of the property in November last year – the Porte-aux-Moines deposit lies within our licence area.

RR: So the announcement you released had some encouraging news, which managed to grab some market attention?

GJ: We just have to step back a bit to mention the work originally carried out by the BRGM – over nine kilometres of drilling – but from what we have been able to locate so far there are only three holes still preserved.

We have accessed those three holes and logged them, and with the assistance of the BRGM we are resampling the massive sulphide zones and sending the samples to an independent laboratory in Ireland for re-assaying.

From those results, we compare them to the old BRGM data and look at whether the two assay sets match – and they do – from that point we can then use the remaining BRGM information – assays, drilling, and logging – to calculate a JORC compliant Resource.

There is more than enough drilling and underground development been done at Porte-aux-Moines to allow a company to calculate a Resource – it is a question of the veracity of information and that is what we have to confirm.

RR: What sort of a time frame do you have on that?

GJ: It really all depends on how quickly we can obtain the re-assays for the remaining two holes and get access to the data held by the BRGM.

Once we have access to the data we will convert it from hard copy to digital formats and create 3D geological and mineralisation models. We can then use these to calculate a Resource.

There is a possibility we may have to do some work to make it JORC Code-compliant, perhaps some shallow drilling, but we won’t know until we have converted everything to the digital format and review.

From what we have seen so far, the grades are certainly high enough to support an operation – it really comes down to defining enough tonnes – that’s our goal.

RR: If you can repeat some of those historic intersections I’m sure you’ll be very happy?

GJ: (Laughs) Yes! I would like to think we could do it, but those results were unusually good intersections, particularly the high-grade thinner intersection (8m at 25 per cent zinc).

I would suspect the thicker intersection with the total grades will be more like what we will see in the future, but you never know until you drill.

RR: It seems like you have acquired the project at a point that compares to hitting a discovery hole, only you haven’t had to do as much work, or spend as much money to get there. You’re basically 12 months ahead of yourself?

GJ: At least 12 months. The amount of work they have done – which is of very high quality – including the underground development, probably saves us years of work, without of course saying that we would have had to discover the deposit in the first place.

We are well ahead of the curve. The amount of money we would have had to spend on that exploration to get to where we are now would run into the millions of dollars.

Website: www.variscan.com.au