Capella Acquires Advanced-Stage Hessjøgruva Copper-Zinc-Cobalt Project, Kjøli District, Norway
Capella Acquires Advanced-Stage Hessjøgruva Copper-Zinc-Cobalt
Project,
Kjøli District, Norway
VANCOUVER, BC
,
April 6, 2022
/CNW/ - Capella Minerals Ltd. (TSXV: CMIL) (OTCQB: CMILF) (FRA: N7D2) (the "Company" or "Capella") is pleased to
announce that it has signed an Exploration and Exploitation Agreement ("EEA") with Hessjøgruva AS for the acquisition of a 100% interest in the advanced
exploration-stage Hessjøgruva Copper-Zinc-Cobalt ("Cu-Zn-Co") project in central
Norway
. The Hessjøgruva project is located approximately 20km SW of
the Company's 100%-owned Kjøli Cu-Zn-Co project (Figure 1) and has a current mineral inventory (non-Canadian National Instrument NI 43-101 compliant
mineral resource) of
3MT @ 1.7% Cu + 1.4% Zn
1,2
(
or
2.2% Cu equivalent
3
)
based on a total of
12,139m
/ 68 holes of historical diamond drilling.
The Hessjøgruva project provides Capella with a potential near-term development asset which complements the Company's ongoing exploration activities
at the adjacent Kjøli project. Both Hessjøgruva AS and local government / communities will benefit directly from the successful advancement and
development of the Hessjøgruva project, with copper and cobalt also being key metals required for zero-carbon energy transmission and for battery/energy
storage.
Highlights
Capella to acquire a 100% interest in the advanced-stage Hessjøgruva Cu-Zn-Co project.
Hessjøgruva's current mineral inventory (non-Canadian National Instrument NI 43-101 compliant mineral resource) is
3MT @ 1.7% Cu + 1.4% Zn
1,2
(
or
2.2% Cu equivalent
3
)
, based on
12,139m
/ 68 holes of diamond drilling completed by previous operators in the 1970's. Historical assaying was
focused principally on copper and zinc (but not cobalt).
The Cu-Zn-Co mineralization at Hessjøgruva is massive-sulfide ("VMS")-type, identical to the mineralization type being targeted at Kjøli. The
Hessjøgruva mineralization occurs primarily in three lenses (A-C, with Lens A hosting most of the high-grade mineralization; Figures 2-4), all of which
extend from surface to >
400m
vertically below surface and all remain open down-dip. Mineralization is dominated by chalcopyrite, pyrite/pyrrhotite,
and sphalerite, with Cu content observed to increase with depth in the deposit.
The average thickness of the highest-grade Lens A is approximately
10m
1
, with the thickest and highest-grade intercept reported from the historical
drilling being
14.5m
@ 4.35% Cu + 1.3% Zn (
or
4.8% Cu equivalent
2
)
(approximate true thickness) from
455.5m
to
470m
downhole in DDH-312.
This Cu-Zn-Co mineralization remains open down dip.
As part of a due-diligence process, the Company completed a systematic resampling program of the Hessjøgruva drill core stored at the NGU storage
facility in Løkken. A total of 113 quarter core samples were taken for analysis and confirmed: i) the reliability of copper and zinc grades reported from
historical drilling, and ii) the existence of elevated cobalt concentrations (ranging from below detection limit to 0.1% Co) within the re-assayed core
intervals.
The combined Hessjøgruva and Kjøli projects provide Capella with both a potential near-term development project as well as significant exploration
upside within the past producing Røros Mining District of central
Norway
.
1
Geological Survey of Norway Report 2007.023; The Hersjø ore deposit, evaluation of ore potential.
2
Reader is also referred to "Disclosure Relating to Historical Estimate" section.
3
Copper equivalent grades have been calculated using 2022 Year-to-Date average copper and zinc prices of USD 9,900/T and USD 3,700/T, respectively, with no adjustment having been made for metallurgical recovery as these are unknown at this time (metal price data:
London Metal Exchange,
www.lme.com
).
Eric Roth, Capella's President and CEO, commented: "The acquisition of the advanced-stage Hessjøgruva copper-zinc-cobalt project provides Capella
with a potential near-term growth platform in the broader Kjøli district. The advancement of Hessjøgruva will also bring significant tangible benefits to both
Hessjøgruva AS and local communities / government, all of which have been strongly supportive of our exploration activities at Kjøli. Our partnership with
Hessjøgruva AS will also provide Capella with significant local knowledge and operating "know how"'.
Our strict compliance to ESG (Environmental, Social and Governance) principles will also ensure that we continue to work with net zero-carbon emission
standards and with maximum respect towards both local communities and the environment.
We expect our first priority to be the completion of an NI 43-101 compliant mineral resource for the project, which is expected to also lead to further infill
and step-out drilling. Subsequently, we expect to initiate some of the development-related studies (such as metallurgical testwork) that a scoping-level
mining study would require. I look forward to keeping all stakeholders updated as the Hessjøgruva project moves forward."
2022 and Beyond Work Program at Hessjøgruva
The Company's expected work plans for the Hessjøgruva project commencing immediately are:
i) The completion of a Canadian National Instrument 43-101 ("NI 43-101") compliant Mineral Resource Estimate ("MRE"). In addition to producing a
formal MRE, this study would identify those areas where infill drilling is required (in order to potentially upgrade the category of the existing mineral
inventory) in addition to determining where step-out drilling would have the highest probability of extending known mineralization.
ii) Subsequent to the completion of the MRE and further recommended drilling, Capella would initiate a Preliminary Economic Assessment in order
to evaluate potential mining, mineral processing, and infrastructure requirements of the project.
Terms of the Hessjøgruva Acquisition
Capella may acquire a 100% interest in the Hessjøgruva Cu-Zn-Co project in return for:
i) Capella managing and funding exploration / development activities on the project.
ii) Capella paying Hessjøgruva AS a one-time amount of
Euro 500,000
upon completion of a positive Bankable Feasibility Study.
iii) Capella providing Hessjøgruva AS with a 2.5% Net Smelter Royalty ("NSR") on all future metal production from the project, retaining an option to
buy-back 0.5% of this NSR at any time prior to the commencement of commercial production for
Euro 1,000,000
.
iv) Capella to cover the cost of annual property payments and basic administration costs.
Quality Assurance / Quality Control (QA/QC)
Capella utilizes industry-standard exploration sampling methodologies and techniques. All soil, stream, and rock (including drill core) samples are collected
under the supervision of the Company's geologists and in accordance with best industry practices. Drill core samples taken as part of the Hessjøgruva due
diligence were quarter core and were cut from half core stored at the NGU's covered core storage facility at Løkken. All samples were sent to ALS
Laboratory's ("ALS") sample preparation facility in Malå,
Sweden
(ALS code PREP-31Y), and subsequently dispatched to ALS's analytical facilities in
Loughrea,
Ireland
, for multi-element geochemical analysis (ALS codes ME-MS61 and PGM-ICP23). All geochemical assays are subject to quality
assurance / quality control programs using a combination of internationally recognized standards, duplicates, and blanks, as provided by both ALS and the
Company.
Disclosure Relating to Historical Estimate
In accordance with Section 2.4 of National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"), an issuer may disclose an
historical estimate, using the original terminology, if the disclosure identifies the following:
Source and date of the historical estimate, including any existing technical reports
· Information relating to this historical estimate is summarized from a 2007 technical report prepared for the Geological Survey of
Norway
("NGU") by
Terje Bjerkgård ("Report 2007.023: The Hersjø ore deposit, evaluation of ore potential").
Relevance and reliability of the historical estimate:
· The historical estimate for Hessjøgruva was derived from drilling undertaken by three mining companies - Røros Kobberverk AS, AS Sydvaranger,
and Killingdal Grubelskap AS - up until 1977. Whilst Capella does not consider the historical estimate to have been completed in accordance with
current NI 43-101 standards, it is considered relevant to reporting on the project.
Key assumptions, parameters and methods used to prepare the historical estimate:
Original (pre-1977) technical reports relating to the calculation of the historical estimate and outlining the assumptions / parameters used have not
been sighted by Capella.
Resource category used:
As the historical estimate is not believed to have been completed in accordance with current NI 43-101 standards, Capella utilizes the terminology
"mineral inventory" rather than either mineral resources or mineral reserves to classify the known mineralization.
More recent estimates or data available to the issuer:
No more recent estimates are currently available to the issuer. A study completed during 2016 (
Geometric and Qualimetric Modeling of the Hessjø
deposit; Nørsett, S.J.; NTNU M.Sc. Thesis)
confirmed most aspects of the geometry of the Cu-Zn-Co mineralization and distribution of Cu-Zn-Co
grades as utilized in the historical estimate.
Work needed to be done to upgrade or verify the historical estimate as current mineral resources or mineral reserves:
An independent Qualified Person ("QP") has not yet done sufficient work to review the historical data and historical estimate to determine what further
work would be required to prepare a technical report in accordance with NI 43-101. Capella is in the process of engaging a QP with suitable
experience in the deposit style being evaluated in order to prepare a technical report in accordance with NI 43-101.
Capella is not treating the historical estimate as current mineral resources or reserves. At this time, a Qualified Person has not done sufficient work on
behalf of Capella to classify this historical estimate as current mineral resources or reserves. Investors should not rely on the historical estimate as a
current mineral resource estimate until it has been verified and supported in a technical report in accordance with NI 43-101.
Qualified Persons and Disclosure Statement
The technical information in this news release relating to the Hessjøgruva copper project has been prepared in accordance with Canadian regulatory
requirements set out in NI 43-101, and approved by
Eric Roth
, the Company's President & CEO, a Director, and a Qualified Person under NI 43-101. Mr.
Roth holds a Ph.D. in Economic Geology from the University of
Western Australia
, is a Fellow of the Australian Institute of Mining and Metallurgy (AusIMM)
and is a Fellow of the Society of Economic Geologists (SEG). Mr. Roth has 30 years of experience in international minerals exploration and mining project
evaluation.
On Behalf of the Board of Capella Minerals Ltd.
"Eric Roth"
___________________________
Eric Roth
, Ph.D., FAusIMM
President & CEO
About Capella Minerals Ltd
Capella is engaged in the acquisition, exploration, and development of quality mineral resource properties in favourable jurisdictions with a focus on high-
grade gold and copper(-zinc-cobalt) deposits. The Company also holds 1,000,000 common shares (on a post-consolidation basis) in Prospector Metals
Corp. (formally Ethos Gold Corp.), providing Capella shareholders with indirect exposure to exploration success at both the Savant Lake JV Project and
elsewhere within Prospector's extensive Canadian project portfolio.
The Company's copper(-zinc-cobalt) focus is currently on the discovery of high-grade VMS-type deposits within 100%-owned, district-scale land positions
around the past-producing Løkken, Kjøli, and now Hessjøgruva copper mines in central
Norway
. The Company's precious metals focus is on the discovery
of high-grade gold deposits on its recently acquired Finnish properties (Katajavaara, Aakenus), the 100%-owned Southern Gold Line Project in
Sweden
,
and its active Canadian Joint Ventures with Prospector Metals Corp (TSXV: PPP) at Savant
Lake (Ontario
) and Yamana Gold Inc. at Domain (
Manitoba
).
The Company also retains a residual interest (subject to an option to purchase agreement with Austral Gold Ltd) in the Sierra Blanca gold-silver divestiture
in
Santa Cruz
,
Argentina
.
Cautionary Notes and Forward-looking Statements
This news release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information is typically
identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to
future events. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of
Capella, including the timing, completion of and results from the exploration and drill programs described in this release. Although the Company
believes that such statements are reasonable, it can give no assurances that such expectations will prove to be correct. All such forward-looking
information is based on certain assumptions and analyses made by Capella in light of their experience and perception of historical trends, current
conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. This information,
however, is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those
projected in the forward-looking information. Important factors that could cause actual results to differ from this forward-looking information include those
described under the heading "Risks and Uncertainties" in Capella's most recently filed MD&A. Capella does not intend, and expressly disclaims any
obligation to, update or revise the forward-looking information contained in this news release, except as required by law. Readers are cautioned not to
place undue reliance on forward-looking information.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or
accuracy of this release.
Figure 1. Location map of the Hessjøgruva and Kjøli Projects, central Norway. (CNW Group/Capella Minerals Limited)
Figure 2. Overview of the Hessjøgruva project area - view looking North. (CNW Group/Capella Minerals Limited)
Figure 3. Plan view of diamond drill-holes in high-grade Cu-Zn-Co mineralization in Lens A, with the surface projection of mineralization shown in Figure 4
also indicated (source: Geometric and Qualimetric Modeling of the Hessjø deposit; Nørsett, S.J. 2016; NTNU M.Sc. Thesis). (CNW Group/Capella
Minerals Limited)
Figure 4. Section showing high-grade Cu-Zn-Co mineralization in Lens A (source: Geometric and Qualimetric Modeling of the Hessjø deposit; Nørsett, S.J.
2016; NTNU M.Sc. Thesis). (CNW Group/Capella Minerals Limited)
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For further information:
Capella Contacts: Eric Roth, Email: [email protected]; Karen Davies, +1.604.314.2662
CO: Capella Minerals Limited
CNW 07:50e 06-APR-22