Wolfden To Acquire Votorantim’s
Murray Brook Massive Sulphide
Deposit, Bathurst Mining Camp,
New Brunswick
March 2015
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TSX-V:WLF
Murray Brook - Deposit Location
Murray Brook
• Located 60 km west of Bathurst and 11 kilometres west of the Caribou mine on an all-weather road,
extremely good access and infrastructure. Bathurst #12 mill only in initial stages of being reclaimed.
• Proximal to Wolfden’s Tetagouche property in the Bathurst Mining Camp
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Murray Brook Drill Hole Plan for PEA
•In all, 30,000 metres
drilling comprising
165 drill holes
•Total cost of the
drilling approximately
$6.5 to $7.0M
•The massive
sulphide deposit has
dimensions of 400
metres by 350 metres
(surface trace of
deposit is outlined in
black while red line
marks limits of
deposit at depth if
projected to surface)
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Murray Brook Would Be A Company Maker For Wolfden
43-101 Resource: Well defined openpit resource based on 165 holes.at a NSR $21/t cut-off,
the deposit has a sulphide resource of 18mmt grading 0.47% Cu; 0.99% Pb; 2.73% Zn; 0.59 g/t Au
and 42g/t Ag. The contained metal is 1 Blb Zn and 200mmlb Cu. There is also a small 1.2mmt
oxide resource with 0.93% Cu (25mmlb Cu). The table below details the resource at a slightly
lower cut-off of $20/t.
Too small for a senior; But would be a company maker for Wolfden. It is large enough to interest
institutional investors as well as analysts.
Higher grade zone : Wolfden estimates that there could be 3 to 4mmt of greater than 10% zinc+lead
concentrated in the western zone. There is potential for a smaller, lower capital cost, shallow
underground mine or possibly direct shipping to the Caribou mill, 11kms away.
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Murray Brook Deposit Cross Section (looking North)
•Very coherent massive
sulphide deposit that forms
a sheath fold; enveloped by
chlorite-sericite alteration
as a halo
•2 distinct lenses to the
deposit; a western lense
which is deeper and zincrich and an eastern lense
that is shallower and
copper-rich with some zinc
•The bottom of the deposit
is approximately 350
metres below surface
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West Lense Drilling Returned Thick, High Grade Drill Results
Hole ID
From m To m Interval Cu %
Pb %
Zn % Au ppm Ag ppm
MB-2012-138
MB-2011-52
182.00 226.00
181.00 224.00
44.00
43.00
0.19
0.29
4.90
3.64
9.16
8.51
0.678
0.999
164.6
118.3
MB-2012-132
165.00 200.00
35.00
0.14
3.48
10.35
1.360
121.5
MB-2012-110
MB-2011-49
108.00 154.00
118.00 157.00
46.00
39.00
0.08
0.32
1.46
3.22
6.96
7.67
0.230
1.392
56.8
120.5
MB-2012-107
MB-2012-70
MB-2012-90
MB-10-16
MB-2011-39
MB-2011-30
60.00 93.00
211.00 234.00
165.00 189.00
44.00 71.00
190.00 210.00
55.00 78.00
33.00
23.00
24.00
27.00
20.00
23.00
0.10
0.41
0.13
0.47
0.18
0.14
2.63
4.74
4.22
3.39
3.82
3.03
8.66
11.94
11.10
9.56
10.90
8.93
0.328
1.567
0.747
0.122
1.339
0.465
109.6
153.6
160.0
121.7
115.4
131.2
The PEA Mine Parameters –June 2013
Robust Economics With Spot Metal Prices and C$
Ore T/Put
LOM
Strip Ratio
Capex-initial
- LOM
Cost/Tonne Milled
Zinc Production
Copper Production
Lead Production
Silver Production
Gold Production
Cost/lb Zn Equ
2
6000
10
4.32
261
335
27.81
91.4
9.2
13.6
1.3
N/A
tpd
Years
$MM
$MM
C$
mmlb pa
mmlb pa
mmlb pa
mmoz pa
Includes 16% or $35mm contingency
% of Revenue
50%
20%
8%
23%
0.24 US$/lb
1
PEA
NPV7% (after tax)
60
$MM
Payback Period
5.6
Years
IRR
11.4 % pa
Note 1: Zinc $0.94/lb; $3.70/lb Copper: $1.00/lb Lead; $30.09/oz Ag and C$1:US$.
Note 2: As calculated by Wolfden from PEA figures.
Marginal deposit at the C$1:US$;
US$0.94/lb Zn; US$30/oz Ag used
in PEA but zinc price and C$
sensitive.
In the PEA, with zinc providing
50% of the revenue, every 10
USc/lb move in the zinc price adds
$35mm of NPV5% value. NPV5%
was $300mm at US$1.50/lb Zn.
We have run our own internal
model1 with recent metal prices
of US$0.97/lb Zn and $17/oz Ag
combined with a US$0.80/C$ and
derived substantially better
economics.
1. Wolfden’s models are generated for internal
purposes. Investors should generate their own
financial models.
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Murray Brook – Metallurgical and Environmental
Metallurgical: While the ore is soft, a relatively fine grind (30 micron) is required. The PEA notes the
following recoveries:
•Good zinc recovery but low lead/copper recovery. Also. no payable gold recovery assumed in PEA.
Additional testwork should be able to improve on these recoveries. Brunswick #12 paid recovery is
understood to have been of 85% Zn, 60% Pb, 57% Cu and 52% Ag.
Environmental
• While the waste dump is still emanating levels of As, Sb and Hg from the gold-recovery operation (in
the gossan) completed in the 1990’s, these levels are low and are subject to monitoring. A new mine
would likely encompass the previous tailings.
• Votorantim has issued an irrevocable $2mm bond to the NB government to secure future reclamation
costs.
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Murray Brook – Exploration Upside Beyond Deposit
Murray Brook
Deposit
•Hosted in sedimentary
rocks of the Mount Brittain
Formation (light brown on
map)
•Murray Brook shows up
prominently as a strong
gravity anomaly co-incident
with a high EM anomaly.
•A number of gravity
anomalies (black circles and
numbers) are located within
these newly identified
exposures of Mount Brittain
Formation; these are
prospective exploration
targets
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Murray Brook Ownership
Murray Brook ownership is currently:
- 35% Votorantim (Voto – a private Brazilian senior company) with Voto having an
option on another 30% from the original owners (MBM/MBR–private company)
- 35% El Nino (ELN-T, a Canadian junior mining company)
The 30% MBM option required payments of C$6MM plus a 0.25% NSR. C$2MM has been paid
to date with another C$1MM due Dec ’15 and the final C$3MM due at earliest of commercial
production or Dec 2017. The Option holder can elect to pay a straight 1% NSR in lieu of the final
C$3mm and 0.25% NSR.
The New Brunswick government required a C$2mm environmental bond secured by a letter of
credit. Voto arranged this for the deposit and as such, ELN are required to pay $7k pm in
interest payments (12% pa ) to Voto for their share of the bond. Wolfden will engage the NB
government to endeavor to reduce the guarantee amount.
Funding Options: Wolfden has C$1.5mm and C$2mm in hard and FT funds respectively.
Negotiations are proceeding with lenders to secure the additional funds. Options include,
royalties, by-product silver streaming and equity or a combination thereof.
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LOI For Voto’s Interest
Wolfden have entered into an LOI with Votorantim to acquire Voto’s 35% interest in the Murray
Brook Property JV plus the partially executed option on a further 30% of the Murray Brook Property
JV in consideration of :
a.
b.
c.
d.
C$2.0 million upon closing
C$0.75 million payable 6 months from closing
C$0.75 million payable 12 months from closing
C$1.0 million upon commercial production plus a laddered NSR starting at 0.25% at a zinc
price of US$1.04/lb and increasing , in increments of 0.25%, to a maximum of 1.5% above
US$1.50/lb Zn in relation to 65% of the production.
Additionally, Wolfden will assume and fund Votorantim Metals Canada Inc.’s liability for the C$2
million Environmental Bond Letter of Credit with the New Brunswick government and assume the
C$1 million, December 2015 option payment obligation to the private company, MBM.
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Benefits To Wolfden Shareholders
•
In position, ready for when zinc prices turn higher: The deposit is in our camp and appears
economic at current metal prices and exchange rates. It would make a compelling zinc investment
particularly once zinc prices start their next cycle higher.
•
Safe New Brunswick Location: The deposit’s location confers excellent infrastructure, abundant
skilled labour and high political stability.
•
Zinc focused mining companies are scarce. This could be a company maker for Wolfden. The
Murray Brook deposit is advanced and, with 1 billion pounds of zinc in situ, has the size to attract
fund managers and analysts to Wolfden.
•
Exploration News Flow: Additional drilling to define the high grade zone at the western lense
would be undertaken. There are several targets in the favourable stratigraphic unit which hosts the
Murray Brook deposit, coincident with soil and gravity anomalies which have yet to be drilled.
•
Lower Capex Alternative: Wolfden will undertake a study into the viability of a shallow
underground, high grade operation may be possible.
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TSX-V:WLF
Capital Structure
Capital Structure
Price
$0.17
52 Week Range
$0.13 - $0.32
Market Capitalization
$10 Million
Shares Outstanding
67.1 Million
Warrants and Options
12.9 Million
Net Cash
$3.5 Million
Insider Ownership (basic) 16%
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Wolfden Chart
Donald Hoy, M.Sc., P. Geo.
President
Tel: 807-624-1131
George Topping
CEO
Tel: 647-925-9457
Website: www.wolfdenresources.com
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