New Licenses Expand Novales-Udias to 111 km²; Udias Drilling Hits 9.6% Zinc
Variscan Mines has expanded its Novales-Udias zinc project in Spain with two new exploration licenses and reported promising underground drilling results at the Udias Mine, signaling strong potential for resource growth and mine restart.
- Two new exploration licenses awarded, expanding project area to 111.1 km²
- High-grade zinc and lead intercepts from underground drilling at Udias Mine
- Ongoing metallurgical and geotechnical test work supporting mine restart plans
- Explorer-Producer strategy advancing with focus on early cash flow generation
- Quarterly exploration spend of $314,000 with strong cash position maintained
Project Expansion in a Proven Zinc District
Variscan Mines Limited (ASX, VAR) has significantly expanded its footprint in the Basque-Cantabrian zinc district of northern Spain by securing two new exploration licenses, Ana Isabel and Hipólita, covering a combined 21.9 square kilometres. This brings the total Novales-Udias Project area to 111.1 square kilometres, effectively doubling the landholding since acquisition. The new licenses strategically adjoin existing tenements and include ground over the former world-class Reocín Mine, a deposit that historically produced 62 million tonnes of high-grade zinc and lead ore.
Encouraging Drilling Results at Udias Mine
During the June quarter, Variscan reported a second tranche of assay results from its maiden underground drilling campaign at the Udias Mine. The drilling revealed high-grade zinc and lead mineralisation outside the current Mineral Resource Estimate, with intercepts such as 8 metres at 9.6% zinc and 10 metres at 5.58% zinc. These results confirm that the Udias Mine remains highly prospective and underexplored, with mineralisation showing strong geological continuity with the nearby San Jose Mine, suggesting a shared mineral system.
Advancing Technical Studies for Mine Restart
Supporting the development pathway, Variscan has progressed metallurgical and geotechnical test work across multiple European laboratories. Ore sorting and flotation tests are underway, alongside rock strength assessments that indicate competent host rock and minimal ground support requirements. These studies are critical inputs for the company’s Mine Re-Start Study, aiming to unlock early production and cash flow from this de-risked, former producing mine.
Explorer-Producer Strategy in Action
Variscan’s dual-track Explorer-Producer strategy is designed to simultaneously grow the resource base through exploration while advancing towards production. The company’s approach leverages the project’s historical mining legacy and existing infrastructure to accelerate development. CEO Stewart Dickson emphasised the goal of creating a self-sustaining cycle of value creation by generating early cash flow to fund ongoing exploration and development.
Financial Position and Outlook
In the quarter, Variscan invested $314,000 in exploration activities focused on drilling, geological modelling, and technical consulting. The company ended the period with $452,000 in cash and is actively considering capital raising options to support its ambitious growth plans. No mining development or production activities were conducted during the quarter, but the groundwork laid positions Variscan well for upcoming resource updates and potential mine restart milestones.
Bottom Line?
Variscan Mines’ expanded landholding and promising drilling results set the stage for a pivotal resource update and potential zinc production revival.
Questions in the middle?
- How will the upcoming updated Mineral Resource Estimate impact Variscan’s valuation and project financing?
- What are the timelines and key milestones for the Mine Re-Start Study and potential production restart?
- How might zinc market dynamics influence Variscan’s capital raising and development strategy?
