Variscan’s Resource Surge Raises Questions on Mine Restart Viability and Next Steps

A Major Leap in Resource Confidence

Variscan Mines Limited (ASX:VAR) has delivered a landmark update for its Novales-Udías zinc-lead project in northern Spain, announcing a tripling of its Mineral Resource Estimate (MRE) to 3.4 million tonnes at an impressive 7.6% zinc and 0.9% lead grade. This substantial increase, detailed in the December 2024 quarterly report, marks a significant milestone in the company’s exploration and development trajectory.

For the first time, the MRE includes Measured Resources, reflecting a higher degree of geological confidence and underpinning the robustness of the project’s resource base. The upgraded estimate positions Novales-Udías as one of the highest-grade zinc deposits held by an ASX-listed company, a notable achievement in the competitive zinc exploration sector.

Drilling Progress and Exploration Upside

Drilling activities commenced in mid-November 2024, focusing on priority targets identified through historic underground sampling and recent assays that confirmed mineralisation beyond the existing resource footprint. The current drilling campaign is concentrated at the Udías Mine, a complex several times larger than the San Jose Mine and previously untested by Variscan’s drilling efforts.

Importantly, mineralisation remains open both along strike and at depth, with over 60% of the 12-kilometre Novales trend yet to be incorporated into the MRE. This suggests considerable upside potential as further drilling results are expected shortly, with a subsequent resource update anticipated in 2025.

Financial Strength and Development Pathway

Supporting these exploration advances, Variscan successfully completed a fully underwritten renounceable entitlement offer in October 2024, raising approximately $2.07 million before costs. This capital injection strengthens the company’s balance sheet, enabling sustained development activities and the advancement of a Mine Re-Start Study focused on the San Jose Mine.

The study, scheduled for delivery in the first half of 2025, will leverage the upgraded MRE, particularly the Measured and Indicated Resources totaling 1.7 million tonnes at 8.6% zinc and 1.4% lead. San Jose Mine, with existing mining licenses and infrastructure, is earmarked as the initial production hub, with potential operational integration with the adjacent Udías Mine complex.

Strategic Outlook and Next Steps

Variscan’s Managing Director Stewart Dickson highlighted the transformational nature of the quarter, emphasizing the tripling of the resource inventory and the commencement of drilling at Udías as key catalysts. The company is poised to unlock further value through ongoing assay results, metallurgical test work, and the upcoming Mine Re-Start Study.

With exploration expenditure of $527,000 during the quarter focused on underground drilling, geological modelling, and technical consulting, Variscan is methodically advancing its Spanish zinc assets within a region boasting established mining infrastructure. The company’s strategic approach balances resource expansion with financial prudence, as evidenced by the recent capital raise and disciplined cash management.