October 03, 2019
Vulcan Minerals Inc. – Exploration Update
St. John’s Newfoundland and Labrador – Vulcan Minerals Inc. (“the Company” – “Vulcan” TSX-V:VUL) provides the following exploration update:
Red Cross Lake Project
The Red Cross Lake project was originally staked for its gold potential. The property is situated in the greater Victoria Lake shear zone and lies adjacent to the Marathon Gold Corp property in central Newfoundland where Marathon has been successfully expanding a significant new gold discovery within a 20-kilometer structural system containing gold bearing veins. The western end of the property lies approximately 4 kilometers from the Marathon gold deposit along an interpreted geologic cross structure. Angular float was discovered on the property by Falconbridge in 2005 which assayed 5.8 grams gold per tonne. The Company has prospected for gold mineralized boulders in the reported vicinity of the occurrence. The area has sparse outcrop and the field crew did not locate the boulders. A reconnaissance soil sample program was completed in the vicinity of the reported boulder which successfully identified several zones anomalous in gold, sampling up to 73 parts per billion (ppb) gold. Of the 63 samples collected, the average value is 14 ppb and the 95th percentile is 25 ppb Au, which in this geologic environment is considered anomalous.
Following the preliminary gold evaluation, the Company also completed a review of the Red Cross Lake property for its nickel, copper and cobalt potential. The property contains the Red Cross Lake intrusive suite, a layered mafic-ultramafic intrusion which received a preliminary evaluation of its nickel potential by Falconbridge in 2005. The Silurian-Devonian aged intrusion is situated in a dilational portion of the Victoria Lake shear zone of central Newfoundland. This setting is considered favorable for the emplacement of intrusive mafic systems with the potential to form magmatic nickel-copper-cobalt mineralization. The Company has identified several factors from previous geochemical work and inspection of historical drill core that highlights the potential for nickel sulphide development including evidence of nickel depletion (in olivine) in certain units of the intrusion. This may indicate that a sulfide melt could have preferentially extracted this nickel, which is a critical process for forming nickel sulfide mineralization. The Company has also compiled and analysed historic geophysical data. This data indicates that there are electrical conductors on the property coincident with magnetic anomalies that represent drill targets which have not been adequately tested. Further information is available at www.vulcanminerals.ca. The Company is soliciting partners to advance exploration on the property.
Springdale Copper – Gold Project
The Springdale project consists of three properties on the Springdale peninsula, an historic copper-gold mining region in central Newfoundland. It contains the Colchester, Fallen Tree and Little Bay Mine properties. The Company has completed detailed digitization and compilation of historic work on these properties combined with several field investigations consisting of prospecting, mapping, geophysics and drilling, the details of which are summarized on the Company’s website www.vulcanminerals.ca. As a result of this work the Company has modelled the mineralization and its host geology in a modern digital context. The area has a high mineral endowment justifying further exploration. In the process of moving from a regional to a more local exploration effort, the properties have been reduced in scale to a core group of claims including ample coverage of the more prospective areas. The Company is seeking partners to advance further exploration.
Red Moon Resources Inc.
The Company owns 63% of the outstanding shares of Red Moon Resources Inc. (TSXV: RMK). Red Moon has developed the Ace gypsum/anhydrite mine in western Newfoundland and is currently in its first year of production. The company planned to mine approximately 150,000 tonnes of gypsum/anhydrite in 2019 and reports that it is on schedule to do so. This is a significant step towards establishing the Ace Mine as a reliable source of gypsum/anhydrite in eastern Canada. Further details are available at www.redmoonresources.com.
Recognizing the depressed equity markets for junior explorers for the past several years the Company has endeavored to create a balanced approach to mineral exploration and development by pursuing industrial mineral opportunities, particularly through its subsidiary Red Moon. The discovery and development of industrial minerals generally involves less geological risk and, in the case of gypsum and anhydrite, shorter timelines to production with lower capital costs compared to the development of metallic mineral deposits. Cash flow from industrial mineral development provides a measure of stability through the volatility of the commodities cycle. It minimizes dilution to existing shareholders by lessening the reliance on equity investments at depressed share prices. Red Moon continues to pursue partners for development of both its salt deposit in Western Newfoundland and its nepheline deposit in Labrador.
The Company also reports that the legal case initiated by Geophysical Service Incorporated (GSI) in 2011 against the Company has been discontinued (dropped) by GSI. The claim related to an allegation that accessing offshore Labrador seismic data, which is released to the public by the Canada Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) after the relevant statutory privilege-confidentiality period, is a breach of copyright. The Company fully defended its interests including participating in an Alberta “common issues” trial with multiple defendants from other cases and jurisdictions which raised the same legal issues with GSI. The common legal issues pertained to whether certain GSI seismic data is subject to copyright law and if so whether the regulatory regime which prescribes for the release of that data by the regulatory bodies, including the CNLOPB, is valid and not an unlawful infringement on any copyright protection. The Alberta Court of Queen’s Bench and the Alberta Court of Appeal both upheld the validity of the regulatory regime as a full answer to any allegation of unlawful disclosure and copyright infringement by the multiple defendants. Therefore, the CNLOPB was within its rights to release the seismic data pursuant to its regulatory regime and the Company was within its rights to access the data. GSI had sought permission to appeal the decision of the Alberta Court of Appeal to the Supreme Court of Canada (SCC), however this permission was not granted by the SCC. The notice of discontinuance of this action by GSI was filed in the Supreme Court of Newfoundland and Labrador. Vulcan is seeking legal costs in the matter.
Patrick J. Laracy, P. Geo, President, is the qualified person responsible for the contents of this news release as defined in National Instrument 43-101.
We seek Safe Harbor.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This release may contain certain forward-looking statements. Actual events or results may differ from the Company’s expectations. Certain risk factors beyond the Company’s control may affect the actual results achieved. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except by law, the Company undertakes no obligation to publicly update or revise forward-looking information.
For information please contact:
Patrick J. Laracy, President