Variscan Mines Raises A$2.5M to Accelerate Zinc Growth in Spain and Ireland
Variscan Mines has successfully raised A$2.5 million through a two-tranche placement to advance its high-grade zinc projects in Spain and pursue a strategic earn-in on promising zinc assets in Ireland.
- Two-tranche placement raising A$2.5 million at a 28.6% discount
- Funds allocated to drilling, Mine ReStart Study, and updated resource estimates in Spain
- Low-risk earn-in agreement to acquire up to 60% interest in Irish zinc assets
- Placement introduces new investors and is supported by existing shareholders
- Shareholder approvals required for second tranche and earn-in options
Capital Raise to Drive Zinc Development
Variscan Mines Limited (ASX – VAR) has announced a successful two-tranche placement raising approximately A$2.5 million before costs. This capital injection is designed to accelerate the company’s growth strategy focused on high-grade zinc assets in Europe, primarily advancing the Novales-Udias Project in northern Spain and securing a foothold in Ireland’s prospective zinc districts.
The placement was priced at A$0.0050 per share, representing a significant discount of nearly 29% to the last closing price, reflecting the company’s intent to attract both existing and new sophisticated investors. The first tranche, unconditional and raising about A$587,000, will settle mid-August, while the larger second tranche, conditional on shareholder approval, is expected to complete after the September general meeting.
Advancing the Novales-Udias Zinc Project
Funds from the placement will primarily support resource extension, definition, and discovery drilling at the Udias Mine, part of the Novales-Udias zinc project in Cantabria, Spain. This project is notable for its high-grade zinc mineralisation, with an updated JORC-compliant resource estimate of 3.4 million tonnes at 7.6% zinc and 0.9% lead released late last year.
Variscan aims to complete and publish a Mine ReStart (Scoping) Study, incorporating metallurgical and geotechnical test results, which will be key milestones in progressing towards near-term production. The project benefits from proximity to established infrastructure, including a zinc smelter operated by Glencore within trucking distance, and enjoys local community and government support due to its historic mining activity.
Strategic Earn-In to Irish Zinc Assets
In a significant portfolio expansion, Variscan has entered into a binding Heads of Agreement to earn up to a 60% interest in BMEx Pty Ltd’s Midlands and Waterford zinc assets in Ireland, a jurisdiction ranked number one globally for mining policy perception. The earn-in is staged over three years with expenditure commitments totaling A$3.3 million, subject to shareholder approval.
The Irish assets are located in well-established zinc belts known for carbonate-hosted deposits, similar to the nearby Tara Mine, one of Europe’s largest zinc operations. This move diversifies Variscan’s geographic exposure while leveraging its expertise in carbonate-hosted lead-zinc deposits, potentially enhancing the company’s exploration upside and asset quality.
Investor Support and Future Outlook
Variscan’s Managing Director Stewart Dickson highlighted the placement as an endorsement of the company’s explorer-producer strategy and growth mindset. The company also plans to issue free attaching options to investors and Alpine Capital, the sole lead manager, subject to approvals, which could provide additional capital upside.
Looking ahead, Variscan is focused on delivering key development milestones including drilling results, the updated Mineral Resource Estimate, and the Mine ReStart Study for the Spanish project, alongside progressing the Irish earn-in. These initiatives are expected to position Variscan as a stronger zinc-focused player in Europe’s critical minerals landscape.
Bottom Line?
Variscan’s capital raise and strategic earn-in set the stage for a pivotal year of zinc exploration and development, with shareholder approvals the next critical hurdle.
Questions in the middle?
- Will shareholders approve the conditional placement tranche and earn-in agreement?
- How will drilling results and the Mine ReStart Study impact Variscan’s valuation and production timeline?
- What exploration potential and timelines exist for the Irish zinc assets under the earn-in?
