VANCOUVER, April 21, 2020 /CNW/ - Rathdowney Resources Ltd.
("Rathdowney" or the "Company") (TSX‐V: RTH) announces that it
plans to complete a private placement of up to approximately
33,333,333 units ("Units") of the Company at a price of
$0.09 per Unit (the "Issue Price")
for proceeds of up to approximately $3
million (the "Offering").
Each Unit is comprised of one common share (a "Share") of
the Company plus one common share purchase warrant (a
"Warrant"). Each Warrant can be exercised for a five year
period from the Closing Date (as hereinafter defined) at
$0.11 per Warrant Share (as
hereinafter defined). In the event that the closing price of the
common shares of the Company is at or above $0.15 per share for a period of 10 consecutive
trading days during the warrant exercise period (with the
10th such trading day hereafter referred to as the
"Eligible Acceleration Date"), the warrant expiry date shall
accelerate to the date that is 60 days after the Eligible
Acceleration Date.
The Units, Shares and Warrant Shares will be subject to
applicable resale restrictions, including a four month hold period
from date of closing of the Offering under applicable Canadian
securities laws. Completion of the Offering is subject to
regulatory approval, including approval of the TSX Venture
Exchange.
Proceeds will be used to advance permitting and engineering
activities in Poland on the
Company's Olza zinc-lead-silver project ("Project Olza") towards
the final submission for its Polish Mining License, as well as for
general corporate working capital purposes.
About Rathdowney and Project Olza
Project Olza is located in the Upper Silesian Mining District of
southwestern Poland, a world-class
region of Mississippi Valley-type deposits with well-developed
mining infrastructure. Easily accessible by road, railway,
power, and a skilled workforce, the Olza project site is a one-hour
drive from Krakow, a major city with full services, including an
international airport. The deposits at Olza are 25 km from
the ZGHB zinc smelter at Boleslaw. A railway line runs through the
Olza project-area, linking it to the local facilities and also to
other smelters through the port of Gdansk on the Baltic
Sea.
Initial drilling by Rathdowney over approximately 30% of the
area of extensive drilling by the Polish Geological Survey,
resulted in the estimation of 24.4 million tonnes of inferred
mineral resources grading 7.02% combined zinc and
lead1, with excellent potential for
expansion. Polish Geological Survey drilling delineated a
historical resource of 77 million tonnes grading 6.15% Zn+Pb in
C1/C2 categories that are similar to the Soviet
Classification2. A qualified person, under
NI43-101 rules, has not done sufficient work to classify this
historical estimate as current mineral resources and the Company is
not treating them as current.
A Preliminary Economic Assessment ("PEA") announced in early
2015 based on the 24.4 million tonne resource, indicates strong
potential financial returns for a 6,000 tpd underground operation
and conventional treatment facility, producing two marketable
concentrates3. The project has a
post-tax net present value ("NPV") of US$219
million at 5% discount4, and US$170 million NPV at 8% discount. Free cash flow
in the first three years of full production averages US$125 million per year (cumulatively
US$375 million), ample for debt
financing and near term project payback.
The PEA is preliminary in nature and includes Inferred Mineral
Resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as Mineral Reserves. There is no certainty that
the PEA will be realized; however, it does highlight the economic
potential of the inferred resources if developed in line with the
development plan outlined in the PEA.
David J. Copeland, P.Eng.,
President and CEO of Rathdowney and a qualified person as
defined under NI43-101, has reviewed the technical information in
this release.
On behalf of the Board of Directors
David J. Copeland,
P.Eng.
President and CEO
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, that address exploration
drilling, exploitation activities and events or developments that
the Company expects, are forward looking statements. Although the
Company believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Assumptions used by the Company to
develop forward-looking statements include the following: the Olza
project will obtain all required environmental and other permits
and all land use and other licenses, studies and development of the
Olza project will continue to be positive, and no geological or
technical problems will occur. Factors that could cause actual
results to differ materially from those in forward-looking
statements include market prices, exploitation and exploration
successes, continuity of mineralization, potential environmental
issues and liabilities associated with exploration, development and
mining activities, uncertainties related to the ability to obtain
necessary permits, licenses and title and delays due to third party
opposition, changes in government policies regarding mining and
natural resource exploration and exploitation, continued
availability of capital and financing, and general economic, market
or business conditions, as well as risks relating to the
uncertainties with respect to the effects of COVID-19. Investors
are cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ
materially from those projected in the forward-looking statements.
For more information on the Company, investors should review the
Company's continuous disclosure filings that are available at
www.sedar.com.
_______________________________
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1
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Estimated at a 2.0%
zinc cutoff; individual grades are 5.53% zinc and 1.49% lead.
Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
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2
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Historical estimate
by Polish State Geological Institute PSGI 1992 report. These are
different from the classification system of NI
43-101.
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3
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Base Case metal
prices use: Zinc - US$1.10/lb in yrs 1-2, US$1.00/lb in remaining
Life of Mine ("LOM"); Lead - US$1.09/lb in yr 1, US$1.00/lb in yr
2, US$0.95/lb in remaining LOM. Assumptions are based the median
price forecast by >30 independent banks and investment dealers
specialized in commodity market analysis. For additional details on
the PEA, see Rathdowney's news release dated April 20,
2015.
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4
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Bray, Chris, SRK
Consulting (UK) Ltd, July 2019 Memo on Discount Rate for Olza PEA
(effective date 31 December 2014).
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SOURCE Rathdowney Resources Ltd.