Variscan Mines’ 3.4Mt Zinc Resource Grows as Capital Raise Closes
Variscan Mines Limited is advancing its high-grade zinc projects in Spain with a near-term production target and strategic expansion into Ireland, supported by strong drilling results and favorable market conditions.
- Near-term production target at San Jose and Udías Mines by 2027/28
- Significant high-grade zinc drilling results confirming resource growth
- $2.25 million capital raise completed with strong investor support
- Earn-in agreement secured for prospective zinc assets in Ireland
- Government approvals and infrastructure in place for low-capex mine restart
Strategic Shift from Explorer to Producer
Variscan Mines Limited (ASX – VAR) is making decisive strides toward becoming a producing zinc mining company, leveraging its high-grade assets in Spain’s prolific Basque-Cantabrian basin. The company’s Novales-Udías Project, encompassing the San Jose and Udías Mines, is positioned for a near-term restart targeting production by 2027/28. This transition is underpinned by a strategy focused on early cash flow generation through a modular, low-capital expenditure approach that capitalizes on existing brownfield infrastructure.
Robust Drilling Results and Resource Growth
Capital and Regulatory Momentum
Variscan successfully completed a $2.25 million capital raise, attracting support from both existing top-tier shareholders and new sophisticated investors. This funding bolsters the company’s capacity to advance its mine restart study and exploration programs. Crucially, the Government of Cantabria has approved the San Jose Mine restoration plan, granting clear permitting to recommence mining activities. The project benefits from excellent social license, minimal environmental impact due to its brownfield nature, and proximity to Europe’s largest zinc smelter owned by Glencore, facilitating efficient logistics and market access.
Expanding European Zinc Footprint
Beyond Spain, Variscan has secured an earn-in agreement for zinc assets in Ireland through a partnership with the Mine Discovery Fund. This strategic move diversifies the company’s portfolio within a proven zinc jurisdiction, offering additional exploration upside and technical collaboration. The agreement includes access to advanced mineral exploration software and the first right of refusal on new zinc projects generated by the fund, positioning Variscan for sustained growth in Europe’s zinc sector.
Favorable Market Dynamics
The timing of Variscan’s development plans aligns with a robust zinc market environment. Zinc prices have surged above $3,000 per tonne, driven by supply shortages and depleted global inventories. This market tightness, coupled with increasing demand linked to the energy transition and infrastructure development, enhances the commercial prospects for Variscan’s high-grade zinc production.
Outlook and Next Steps
Variscan is progressing key technical workstreams including metallurgical and geotechnical testing, with a mine restart scoping study expected to culminate in a final investment decision by year-end. The company’s phased growth model aims to reinvest early cash flows into exploration and production scale-up, underpinning a sustainable path to becoming a mid-tier zinc producer. Strategic partnerships, government support, and a strong shareholder base provide a solid foundation for this transition.
Bottom Line?
Variscan Mines is on track to unlock significant value as it advances toward zinc production amid a tightening market and expanding European footprint.
Questions in the middle?
- How will upcoming assay results from Udías Mine drilling influence the mineral resource estimate?
- What are the detailed capital expenditure requirements and financing plans for the San Jose mine restart?
- How might zinc price volatility impact Variscan’s production ramp-up and exploration funding?
