Developing One of the World’s Largest Known Silver Resources
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Levon Resources Ltd. (TSX:LVN, QTCQX:LVNVF) is a Canadian exploration company advancing Cordero, a silver-gold-zinc-lead porphyry project, in the northwest state of Chihuahua, Mexico. Cordero is a global scale, bulk tonnage discovery still in its advanced exploration stage with an updated resource estimate and preliminary economic assessment (PEA) released in April 2018. The Company will be advancing the project through to prefeasibility next. The Cordero discovery is presently one of the world’s largest silver resources, containing an indicated and inferred 595.2 million ounces of silver. Value in the resource is also associated to an indicated and inferred 12.7 billion pounds of zinc, 5.6 billion pounds of lead and about 1.6 million ounces of gold. The mineral resource comes to the surface and is contained within a single large scale, modeled open pit measuring 3 kilometers long and 2.3 kilometers wide and up to 1 kilometer deep. The resource is not drilled off and is still open. The PEA focuses on the first stage of mining 40,000 tonnes per day for 29 years.
In July 2013, Levon consolidated 100% ownership of all the mining claims in the district by acquiring the 16-hectare Aida claim in the center of the resource that had not been drill tested. Exploration and grid drilling of the entire claim in 2013 and 2014 established the resource crops out at the surface at its apex and has a higher-grade core at depth. Since then, the company conducted further drilling over the course of 2017, with the goal of improving starter pit economic projections. Results from the drilling included the extension of a gold enriched sulphide zone presenting values which included 70.5 g/t silver, 1.12 percent zinc, 1.41 percent lead and 0.23 g/t gold over 48 meters.
An updated resource estimate was released in April 2018 for the Cordero Project, providing the current resource for the project. The new resource estimate took into account all of the results of the company’s 2017 drilling program and showing an increase in resources from the previous estimate released in 2014.
- 2018 Resource Estimate Highlights 990 million tonnes grading 12.81 g/t silver, 0.37 percent zinc, 0.17 percent lead and 0.04 g/t gold
- April 2018 updated PEA outlines after-tax NPV (7.5 percent) of $438 million and after-tax IRR of 16.5 percent with 4.8-year payback period
- The resource is open to expansion on strike and at depth with additional drill targets
- Aida Claim exploration presented improved project economics
- Strong, experienced management team
Cordero Project—Chihuahua, Mexico
The Cordero Project is located in the State of Chihuahua in north central Mexico 180 km south of the city of Chihuahua and 35 km northeast of the mining town of Hidalgo del Parral. The 37,000-hectare property is wholly owned by Levon Resources and is one of Mexico’s premier porphyry targets for silver, gold, zinc and lead.
Levon first began exploration at Cordero in February 2009. During that year, geological mapping defined the existence of two large scale belts of porphyry mineralization showings: the Porfido Norte Belt and the Cordero Belt. The Company’s subsequent exploration has focused mainly within the Cordero Project Porphyry Belt in a southern tier of the main claim block which has been expanded to cover the entire mining district. Three bulk tonnage silver-gold-zinc-lead discoveries have been made and grid drilled in the central part of the Belt. The grid drilling confirms that the Pozo de Plata Diatreme, the Josefina Mine Zone, the Aida Claim zone and the Cordero Project Porphyry Zone discoveries merge into a single large scale, bulk tonnage, mineral resource.
The 2014 resource estimates were further updated in 2018, following the company’s 2017 drill program, which was launched with the goal of improving starter pit economic projections. The program covered 5,655 meters across 18 holes within the central part of the resource and uncovered grades which included 70.5 g/t silver, 1.12 percent zinc, 1.41 percent lead and 0.23 g/t gold over 48 meters and 63.1 g/t silver, 0.75 percent zinc, 1.12 percent lead and 0.21 g/t gold over 94 meters.
The updated report gives an indicated resource estimate of 407,761,000 ounces silver, 1,273,000 ounces of gold, 8 billion pounds zinc and 3.77 billion pounds of lead in 990 million tonnes of material grading 31.92 silver equivalent g/t that includes 12.81 g/t silver, 0.04 g/t gold, 0.37 percent zinc, and 0.17 percent lead, at a cut-off grade of 15 g/t silver equivalent.
The inferred resource estimate highlights include: 187,461,000 ounces of silver, 363,000 ounces of gold, 4.66 billion pounds of zinc, 1.86 billion pounds of lead within 282.2 million tonnes of material grading 56.43 g/t silver equivalent including 20.66 g/t silver, 0.04 g/t gold, 0.75 percent zinc, and 0.30 percent lead at a cut off grade of 15 g/t silver equivalent.
The 2018 updated resource estimate shows an increase from the combined indicated and inferred resource released in 2014. This includes a 12 percent growth in silver ounces, a 37 percent increase in zinc pounds, a 10 percent increase in lead pounds and a 13 percent raise in gold ounces. The resource remains open to expansion through step out delineation and infill drilling, on strike and beneath the modeled open pit. The open pit measures 3.0 kilometers by 2.3 kilometers, with a depth of 600 meters.
Preliminary Economic Assessment (PEA)
Superseding a PEA published in 2013, Levon’s most recent PEA for the Cordero project was released in April 2018. The updated PEA used the same open-pit mining plan with a rate of 40,000 tonnes of mill feed per day with prices of $20 per ounce silver, $1.3 per pound of zinc, $1.0 per pound of lead and $1,300 per ounce of gold.
Highlights from the 2018 PEA include the following:
- After-tax NPV (7.5 percent) of $438 million
- After-tax IRR of 16.5 percent
- Mine life of 29 years with total mineralized material of 417.5 million tonnes at 46.5 g/t silver equivalent
- Initial project capital costs estimated at $570 million
- Average after-tax cash flow of $77.4 million per year over entirety of mine life
- Average operating mining cost of $2.34 per tonne
Ron Tremblay — President, Chief Executive Officer, and Director
Mr. Tremblay brings to Levon over 30 years’ experience in finance and management. In his seven years as Levon Resources’ President, he has raised approximately $80M for the company and advanced the Cordero project to its current world-class status. He has taken Levon from a market cap of $5M to over $100M (exceeding $400M in 2011) and guided the company through very difficult markets. In 2015, he brought diversification to the company through an arrangement with biotech company SciVac Ltd. while maintaining Levon’s 100% ownership of the Cordero project and laying the groundwork for the project’s next round of exploration and development.
Vic Chevillon, M.Sc., C.P.G. — VP of Exploration and Director
M.Sc., C.P.G. Mr. Chevillon is a consulting exploration geologist with 36 years of exploration experience working with major mining companies within the U.S. including Noranda, Homestake, Placer Dome and Barrick Gold. He has held key exploration roles in Placer Dome’s (Barrick) Gold Mines, Nevada, where he conducted a geologic assessment that lead to the Getchell Gold Mine acquisition. In addition, he directed the exploration assessment of the Bald Mountain Gold Mine, now being realized by Barrick Gold. Mr. Chevillon was also involved in the Noranda acquisition at New World, Montana and developed an exploration model at the Blackbird deposit, Idaho.
Daniel Vickerman — Chairman
Daniel Vickerman is a seasoned institutional sales and corporate finance professional with 20 years of experience in the financial industry and formerly, Managing Partner, Head of UK of Edgecrest Capital UK. Prior to joining Edgecrest Capital UK, Mr. Vickerman was Managing Director, Co-Head of Canadian Equity Sales UK at Canaccord Genuity Corp. Mr. Vickerman also formerly worked at Thomas Weisel where he served as Senior Vice President. Mr. Vickerman has extensive experience working with mineral exploration and development companies listed on the TSX. Mr. Vickerman holds a Bachelor of Arts, Economics from the University of Western Ontario.
JoAnne Odette – Chief Financial Officer
JoAnne Odette, CPA, CA, CPA (Illinois), has over 25 years of financial experience both in Canada and internationally. Since moving to Vancouver in 2010, she has worked with several public companies in senior financial roles.
JoAnne began her career with Deloitte in Edmonton before accepting an opportunity to work with EY in Bermuda. She then spent 14 years working in both Bermuda and the U.S. in progressive roles to Vice President Accounting for a large international group of companies.
Edward Karr – Director
Edward Karr is based in Geneva, Switzerland and has more than 20 years of capital markets experience as a financial analyst, money manager and investor. He is the Chief Executive Officer and Founder of three private Swiss financial management companies; Strategic Asset Management SA, Strategic Swiss Advisors Sarl and Rampartners SA. His former capital markets experience includes positions at Parthian Securities, SA, Prudential Securities Inc., and Rauscher Pierce Refsnes, Inc.
Gary Robertson — Director
A Certified Financial Planner, Mr. Robertson has worked in the financial industry for the past 20 years. He presently serves on the board of several private companies as well as on the board of six Canadian junior gold mining companies including Bralorne Gold Mines Ltd., Avino Silver & Gold Mines Ltd., Coral Gold Resources Ltd., Mill Bay Ventures Inc., and Sage Gold Inc.
Christina Boddy – Corporate Secretary
Christina Boddy is a member of the Canadian Society of Corporate Secretaries and has acted as Corporate Secretary for a number of public companies in recent years, including Nevada Sunrise Gold Corporation (TSXV.NEV), Eureka Resources Inc. (TSXV.EUK), Resinco Capital Partners Inc. (TSXV.RIN), and Teslin River Resources Corp. (TSXV:TLR). Ms. Boddy acts as a consultant to public and private companies through Rhodanthe Corporate Services, a BC-based private company. Ms. Boddy holds a Bachelor of Science from the University of Northern British Columbia.
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