Lithic Resources – Advanced Zinc Exploration in Utah
Overview
Lithic Resources Ltd. (TSXV:LTH) is a Canadian junior mineral exploration company based in Vancouver, British Columbia. Lithic holds a 100% interest in the advanced stage West Desert project in Utah, a zinc-copper-silver-indium-gold deposit previously explored by several major mining companies. Lithic’s 2007-2008 drill program significantly enlarged a sizeable historical resource. Potential exists for approximately 2.4 billion pounds of zinc as well as an equivalent value in copper, silver, gold, and indium.
Investment Highlights
- Numerous large scale zinc mines will be closing in the near future leading to a global supply deficit
- 100% owned, advanced stage zinc project approaching pre-feasibility
- Best located, most advanced and largest undeveloped zinc resource in continental USA
- Open for expansion – very good potential for additional high grade and new zones
- Potential for low cost mineral extraction based on project’s geology and location in business-friendly and infrastructure-rich Utah
- Experienced management and board with an established track record of mine development and finance
Key Project
North American Zinc Projects
The West Desert zinc-copper project is located on the southwestern edge of the Great Salt Desert in west-central Utah, approximately 160 km southwest of Salt Lake City. The property covers an area of 1,723.3 hectares, and is located in a mining friendly jurisdiction with good access to both a local labour force and necessary infrastructure for mine development.
Silver-lead mineralization was first discovered in the area of the present day West Desert zinc property in 1890. Between 1890 and 1953, high-grade lead-silver ores were mined from oxidized, carbonate replacement deposits in small underground operations, mainly the Utah and Galena mines. The West Desert zinc property lies in the Fish Springs mining district, from which about 7.9 million kg of lead, 1,300 kg of zinc, 2,400 kg of copper, and 2.7 million ounces of silver were produced from 1890 to 1953.
The West Desert project area was at one time or another held or optioned by Kennecott Copper Corporation, Pinnacle Exploration, Utah Construction & Mining, Noble Peak Resources, Cyprus Minerals Company, and EuroZinc Mining Corporation. Lithic purchased the property from EuroZinc in 2005 and has increased its land position since then. Zinc mineralization was first discovered by Utah, and later expanded by Cyprus. Both companies took the project through resource estimation to the scoping study level but prevailing market conditions led to their respective exits.
Since acquiring the property, Lithic has completed aerial photography, an induced polarization survey (IP), and a detailed helicopter-borne magnetic survey. Between 2007- 2008, the Company completed a program of 10,639 m of core drilling in 17 holes. This was the fourth campaign of drilling on the property, making for a total of 38,138m of drilling since the discovery of zinc mineralization.
Lithic engaged Mine Development Associates (MDA) of Reno, Nevada for an independent resource estimate for the West Desert project which was completed in late 2009. The resulting estimate was a 40% increase over the historical resource and quantified the presence of significant levels of associated copper and indium, a key component in flat screen displays, thin film photovoltaics and other electronics. Preliminary metallurgical testwork has shown good recoveries to clean zinc (+indium) and copper (+gold,silver) concentrates using standard flotation processing.
In 2010, an independent Preliminary Economic Assessment (PEA) showed that the most likely development scenario at West Desert would be that of a conventional 3,500 tpd underground mine and mill complex. Zinc would represent approximately half of the value of production, the balance by copper, silver, indium and gold. The levels of indium in the deposit are exceptional and highlight West Desert as perhaps the most important potential resource of that metal in the USA where there is currently no domestic production.
Summary
Lithic Resources’ 100% owned West Desert project is an advanced staged zinc-copper-silver-indium-gold deposit with potential for approximately 2.4 billion lbs of zinc, plus an equivalent value in copper, silver, indium and gold. A very significant proportion of the minimum grade and tonnage required for an economic situation has already been defined. Since the deposit is open in several directions, there is good potential to expand existing resources and very good potential for the discovery of new zones. A program of drilling is planned to finish building the resource base.
Since the date of the PEA, long term metals prices as well as smelter terms have improved markedly further enhancing the prospects for eventual development. The project is fully permitted and bonded for continued exploration.
Management
Chris Staargaard – President, CEO, and Director
Mr. Staargaard holds a B.Sc. in Geology from Pennsylvania State University and an M.Sc. in Geochemistry from Queen’s University. Initially, he worked in mineral exploration as a project geologist for Kennco Explorations Ltd, Kidd Creek Mines Ltd., Homestake Mineral Development Company and Silver Hart Mines Ltd. From 1988 until joining Lithic in 2002, he was an independent consulting geologist, mainly to junior mining companies and investment dealers involved in the mineral exploration industry. He has over thirty-five years of experience in the evaluation of mineral exploration projects in a wide variety of geological environments both in Canada and internationally.
Wayne Hubert – Director
Mr. Hubert was most recently CEO and director of Andean Resources Limited from 2006 until December 2010. When he joined Andean, the company had a market capitalization of $70 million and a resource base of about 800,000 ounces of gold. Mr. Hubert helped lead Andean through several discoveries which increased the resource base to over 5 million ounces of high-grade gold as well as subsequent feasibility studies, financings and permitting. Andean was ultimately acquired by Goldcorp for $3.5 billion.
Prior to his tenure at Andean, Mr. Hubert was Vice-President Corporate Development and Investor Relations with Meridian Gold Inc. During his fourteen year career at Meridian, he gained considerable experience in the areas of finance, exploration, project development, permitting and construction. He has a bachelor of science in Chemical Engineering from the University of Cape Town and an MBA from Brigham Young University.
Kerry Curtis – Director
Mr. Curtis is the former President, CEO and director of Cumberland Resources Ltd., a Canadian gold company which he led from the resource discovery stage through feasibility and permitting, syndicated bank financing and initial construction until its acquisition by Agnico Eagle in 2007. He is also a former director of Meliadine Resources Ltd., a privately owned Nunavut gold explorer which was sold to Agnico Eagle in 2010. He is currently President and CEO of South Arm Resources Ltd., a private company based in British Columbia.
Mr. Curtis has twenty-eight years of experience in all facets of mineral exploration, mine development and corporate affairs. He has completed a wide range of mining transactions in his career and is a graduate of the University of British Columbia with a Bachelor of Science in Geology and is a Professional Geoscientist (P.Geo.) registered with the Association of Professional Engineers and Geoscientists of British Columbia.
Louis Montpellier – Director
Mr. Montpellier attended the University of British Columbia and received his law degree from the University of Victoria. He has been practising law in Vancouver since 1981 and since 1983 has worked exclusively in the capital markets as outside counsel to public companies engaged in international mineral exploration and mining. His expertise includes the entire spectrum of corporate finance activities as well as mergers and acquisitions, corporate reorganizations and project financing. From early 2010 until mid-2012, Mr. Montpellier was Vice-President, Corporate Development and General Counsel at Exeter Resource Corporation, having been a director there since 2008. He has been and continues to be involved as a director for a number of public companies in the mining sector.
Ken Puchlik – Consultant
Mr. Puchlik is a Utah-based consultant to Lithic with over thirty years of mineral exploration work with various companies including Freeport Gold, Independence Mining, Cyprus-Amax and Pegasus Gold, His experience includes the development of the 2.4 million oz Kubaka mine in the Russian far east and expanding the resource base at the Jerritt Canyon and Mt. Todd gold mines. For the last two years, he has been acting as Exploration Manager for Sumitomo’s Pogo gold mine in Alaska where he has added over 1 million oz gold to the existing reserve.
Mr. Puchlik holds an M.S. in Economic Geology from the Mackay School of Mines in Nevada and is currently a director of the Utah Geological Survey.
Steve Vanry – CFO
Mr. Vanry holds a Chartered Financial Analyst designation, the Canadian Investment Manager designation and is a member of the CFA Institute; as well as the Vancouver Society of Financial Analysts. His business career includes over seventeen years with publicly traded natural resource companies at both management and board level during which time he focused on strategic planning, fund raising, mergers and acquisitions, regulatory compliance and financial reporting.
In 2003, he founded Fury Explorations Ltd., a company with advanced stage silver projects in Nevada which subsequently merged with Golden Predator Mines Inc. Mr. Vanry currently provides consulting services in corporate finance, business development and merchant banking and serves as director and/or officer for a number of public companies in the mining sector.
Joyce Musial – Corporate Communications
Ms. Musial has over 25 years’ of investor relations and corporate development experience with various junior and senior exploration and mining companies including Placer Dome Inc., Teck Exploration, Batero Gold Corp. and Cumberland Resources Ltd. At Cumberland, she was a part of the team taking that company from the
exploration stage through syndicated bank financing and ultimately its acquisition by Agnico Eagle Mines.
