Variscan Mines has achieved a pivotal permitting milestone for its San Jose Mine and reported its highest-grade zinc intercepts to date at the Udías Mine, advancing its Novales-Udías Zinc Project towards production.
- Government approval of Preliminary Mining Plan for San Jose Mine
- Record high-grade zinc intercept of 20.76% Zn at Udías Mine
- Mine Re-Start Study nearing completion at 95%
- A$1 million convertible loan note facility secured
- Exploration expenditure of $559,000 with no production activities this quarter
Permitting Breakthrough at San Jose Mine
Variscan Mines Limited (ASX, VAR) has taken a significant step forward in its development of the Novales-Udías Zinc Project in northern Spain, securing government approval for the Preliminary Mining Plan (Anteproyecto) for the San Jose Mine. This critical permit enables the company to commence pre-works, underground development, and trial mining activities ahead of a proposed mine restart, effectively de-risking the project and laying the groundwork for future production.
The approval, granted by the Government of Cantabria, complements previously secured mining licences and restoration plans, allowing Variscan to advance early operational activities such as infrastructure adaptation, mine access, and safety system installations. This milestone reflects a strong working relationship with local authorities and underscores the company’s in-house permitting capabilities.
High-Grade Drilling Success at Udías Mine
Parallel to permitting progress, Variscan’s underground diamond drilling program at the adjacent Udías Mine has delivered exceptional results. The company reported its highest-grade zinc intercept to date, 6.43 metres grading 20.76% zinc and 2.77% lead. Other notable intercepts include 7.40 metres at 11.22% zinc and 7.65 metres at 8.59% zinc, all outside the current Mineral Resource Estimate (MRE).
These results confirm the continuation of zinc mineralisation along structural trends and in previously untested zones, reinforcing the potential for resource expansion. The drilling also correlates well with historical face sampling that recorded zinc grades exceeding 28%, validating the geological model and the prospectivity of the broader Novales-Udías system.
Advancing the Mine Re-Start Study
Supporting these operational advances, Variscan is nearing completion of its Mine Re-Start Study, with approximately 95% of technical workstreams finalized. This includes metallurgical test work aimed at optimising ore processing and geotechnical assessments to inform mine design and infrastructure planning. The study is expected to provide a comprehensive framework for the mine’s development and operational strategy, with publication anticipated in the coming weeks.
Financial and Corporate Developments
On the corporate front, Variscan successfully passed all resolutions at its Annual General Meeting, including shareholder approval for the BMex earn-in to its Midlands and Waterford zinc projects in Ireland. Financially, the company has secured a binding term sheet for a A$1 million convertible loan note facility from a syndicate of mining-focused investors, enhancing liquidity to support ongoing exploration and development activities at Novales-Udías.
Exploration expenditure for the quarter was $559,000, primarily directed towards underground drilling, geological modelling, and technical consulting. Notably, no mining development or production activities were conducted during this period, consistent with the project’s current stage.
Outlook and Next Steps
Looking ahead, Variscan is poised to deliver several key catalysts, including the finalisation of the BMex earn-in, release of metallurgical and geotechnical test results, publication of the Mine Re-Start Study, and further assay results from ongoing drilling at Udías. These developments will be critical in shaping the company’s path towards recommencing production and realising the value of its zinc assets.
Bottom Line?
With permitting secured and drilling success underpinning resource growth, Variscan Mines is on the cusp of transforming its Novales-Udías project from exploration to production.
Questions in the middle?
- When will Variscan publish the full Mine Re-Start Study and what operational timelines will it outline?
- How will the company prioritise drilling targets to expand the Mineral Resource Estimate at Udías and San Jose?
- What are the terms and potential dilution effects of drawing on the A$1 million convertible loan note facility?