Blackheath Resources – Tungsten Exploration & Development in Portugal
Overview
Blackheath Resources Inc. (TSXV:BHR) is focused on tungsten exploration and development in Portugal and holds interests in its maiden property, the past producing Covas tungsten mine in northern Portugal – a country with a highly attractive geological setting conducive to the discovery of mineral deposits and with a supportive legislative environment. Blackheath has excellent connections in Portugal and will continue to seek additions to its mineral portfolio to grow to a premier base metal developer.
Blackheath’s management are seeking to repeat similar objectives: Tungsten development in Portugal and to return shareholder value through successful exploration, acquisition of additional attractive projects as well as M&A activity. Management’s previous involvement in Primary Metals grew shareholder value significantly from its IPO at 15 cents in 2003 to an all-cash buyout in less than 4 years at $3.65/share.
Investment Highlights
- Strong board and management team with proven mine operating and deal making experience with tungsten in Portugal
- Management’s previous involvement in Primary Metals grew shareholder value significantly from its IPO at 15 cents in 2003 to an all-cash buyout in less than 4years at $3.65/share.
- Project has easy earn in terms (no cash or share payments) for 85% of Covas Tungsten Project in Portugal
- Historical resources of 923,000 tonnes at 0.78% WO3 at Covas
- Significant expansion of Tungsten resources is possible, also previously unrecognized Gold potential
- Attractive capital structure with management owning 38%
- Drilling program to confirm and expand resource underway
Key Properties
Covas Tungsten Project
Covas is a past producer of tungsten and historic resources (indicated and inferred) on the property have been estimated at 922,900 tonnes of 0.78 per cent WO3 (tungsten trioxide), and mineralization is open to expansion. The price of tungsten has doubled over recent years and is currently approximately $36 per kilogram of contained tungsten trioxide. (These resources are historic in nature and have not been verified by the company or its consultants but are believed to be relevant although not compliant with current NI 43-101 standards. The resource estimates are reported as they exist in the historic records. The company has not done sufficient work to classify the historical resources as current mineral resources and therefore is not treating the historical Covas resources as current resources.)
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The property is located about 100 kilometres north of Porto, Portugal’s second largest city. Historic records show that past production from the mine between 1951 and 1974 totalled 366,000 tonnes at 0.61 per cent WO3. Ore was mined from an open pit and shallow underground workings, and processed using gravity and flotation methods, producing separate wolframite and scheelite mineral concentrates. Subsequent exploration by Union Carbide and others, from 1974 to 1980 when the price of tungsten plummeted, included 329 diamond drill holes, testing part of the property and resulting in the determination of the historic resource estimates in the so-called Skarn Ring. Little work has been undertaken since that time, and extensions of these zones will be tested in the current program.
Recent work in the central Covas Dome area, within the Skarn Ring, has confirmed geophysical magnetic anomalies and also surface geochemical anomalies for tungsten, which were not previously known. Also, recently identified surface soil anomalies for gold, together with very limited rock sampling to date, have indicated the potential for a related gold system. These are new targets for exploration and will also be tested in the current program.
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Blackheath holds an option from Avrupa Minerals Ltd. to earn up to an 85-per-cent interest in a joint venture in the project, after incurring minimum exploration expenditures of $1-million in two stages to earn a 70-per-cent interest followed by completion of a prefeasibility study to earn the additional 15-per-cent interest.
Over the life of exploration of the Covas tungsten project, it is estimated that Union Carbide and other companies expended millions of dollars. As an index of partial expenditures, the 329 drill holes totaling approximately 26,000 meters, would cost, in terms of present drilling costs at Can $150 per meter of core, approximately Can$ 3.9 million. This does not include geological, geophysical or geochemical studies, metallurgical work and other engineering costs. The mines included at least five open pits (Cerdeirinha, Fervenca and Valdarcas, (Geomina Limitada), Mina de Fraga and Lapa Grande (Gaudencio Valente and Faria Lda.), and underground workings (Valdarcas). Numerous geological reports and detailed geological plans and sections which have described much of the geological value of the work expended are available in files belonging to INETI and other government departments. Blackheath has access to a large database of technical information.
Bejanca Tungsten/Tin Project
The Bejanca tungsten/tin project is located about 12 kilometres northwest of Viseu in northern Portugal. The concession encompasses several historic mines that produced tin and tungsten concentrates until their closure in 1985. No exploration work or drilling has been undertaken since that time and Blackheath will re-assess Bejanca for its mineral potential. The Bejanca property is held by Mineralia — Minas, Geotecnia e Construcoes, Lda. through an exploration concession granted by the Government of Portugal. The project area covers 89 square kilometres and is granted for an initial period of two years renewable for a further three years in one year increments, after which it may be converted into a preliminary exploitation license and a final exploitation license successively.
The mines at Bejanca operated from the early 1900′s until 1985 when tungsten prices resulted in their closure. Available historic records show production of tungsten concentrates between 1911 and 1939 as well as production of both wolframite (tungsten) concentrates and cassiterite (tin) concentrates between 1963 and 1985.
Borralha Tungsten Project
In October 2012, the company entered into a Letter of Intent for an option to acquire up to a 100% interest in the past-producing Borralha Tungsten Project. The project covers an area of 127.5 square kilometres and is located about 35 kilometres northeast of Braga in northern Portugal. At one time, the Borralha property was Portugal’s second largest tungsten mine after Panasqueira until its closure in 1985 as a result of a decline in tungsten price. No exploration work or drilling has been undertaken since 1985 and Blackheath will re-assess the Borralha property and the surrounding area for its mineral potential.
The Borralha mine operated from 1903 until 1985 when tungsten prices resulted in closure. Available historic records show production of tungsten in wolframite concentrates between 1907 and 1939 with some production of separate tin concentrates as a by-product. In the 1960′s and 1970′s, the mine produced high-quality wolframite concentrates and also lesser amounts of additional scheelite (tungsten) concentrates. Work by Blackheath will focus on exploration of two large, partially-developed tungsten-bearing breccia zones and also on relatively untested sub-horizontal tungsten and tin bearing veins.
Summary
Blackheath Resources Inc. has a strong board and management team with experience in Tungsten and mining operations in Portugal through their past involvement with Primary Metals and the Panasqueira Tungsten Mine. The company currently holds a JV earn-in option (no cash or share payments) for 85% of the Covas Tungsten Project in Portugal which has historical resources of 923,000 tonnes at 0.78% WO3. A drilling program to confirm and expand the tungsten resource is underway. Evaluation of the newly-acquired past-producing Bejanca and Borralha Projects is also underway. Blackheath Resources plans to increase shareholder value, by furthering project acquisitions, and successful development.
Management
James Robertson, B.SC., P.Eng. – President, CEO, and Director
Mr. Robertson holds a B.Sc. in Metallurgy from the University of Nottingham and is a Professional Engineer in the Province of British Columbia. He has been actively involved in the mining industry and public resource companies for over 40 years and founded several companies, two of which graduated to full listings on the London Stock Exchange. Mr. Robertson is the principal and owner of Midas Management Inc., a private management company that provides services to junior resource companies seeking public listing and financing and to established companies in maintaining their corporate obligations. He was a founding director and Vancouver manager of Primary Metals Inc., a TSX Venture Exchange-listed company owning the operating Panasqueira tungsten mine in Portugal before its sale in 2007 to a subsidiary of the major Japanese conglomerate, Sojitz Inc.
Kerry Spong – Secretary, CFO, and Director
Mr. Spong is a self-employed accountant with over 20 years’ experience in accounting practice for private and public resource companies. He was a director and CFO for Primary Metals Inc., a TSX Venture Exchange-listed company owning a Portuguese tungsten producer, from October 2004 to October 2007 and is currently CFO for other junior public companies.
Jonathan Carter – Director
Mr. Carter is a businessman with over 35 years of experience in marketing and metal sales with particular experience in tungsten. He was previously employed by Minorco plc and Waller Metals Inc. as Sales Manager with particular reference to the sale and trading of tungsten concentrates and products. He was President and a director of Primary Metals Inc., a TSX Venture-listed company owning the operating Panasqueira tungsten mine in Portugal before its sale in 2007 to a subsidiary of the major Japanese conglomerate, Sojitz Inc.
J. Merfyn Roberts, B.SC., M.SC., CA – Director
Mr. Roberts has over 30 years of experience in fund and portfolio management. Until recently, he was a Senior Portfolio Manager with CQS Management of London, United Kingdom. He is a member of the Institute of Chartered Accountants of England and Wales and holds a Bachelor’s degree in Geology from the University of Liverpool and a Master’s degree in Geochemistry from the University of Oxford. Mr. Roberts currently serves as a director of Toronto Stock Exchange-listed companies Agnico-Eagle Mines Ltd., and Eastern Platinum Limited, and of other TSX Venture Exchange-listed companies.
Marshall Farris – Director
Mr. Farris has been actively involved in assisting public and private companies with corporate operations, capital development, corporate communications and regulatory compliance activities for over 20 years. Mr. Farris is a co-founder and principal of Ascenta Finance Corp. and has completed the Investment Funds Institute of Canada’s Exempt Market Products Course. He is currently a director of other TSX Venture Exchange-listed resource companies.
Alexander Langer – VP of Corporate Development
Mr. Langer has over nine years of experience in corporate development and capital markets in the resource sector. Mr. Langer started his career as an Investment Advisor with Canaccord Wealth Management. Most recently, Mr. Langer was Vice President Capital Markets for a TSX listed exploration company and has worked with numerous publically traded companies in various senior management positions including: Corporate Development, Investor Relations, Corporate Communications and Marketing. To date, Mr. Langer has helped raise over $200 million for junior and mid-sized resource companies through various means of financing including: equity, debt, royalty, off-take, and bond agreements.
George Cavey, B.Sc., P.Geo. – Advisory Committee
Mr. Cavey has over 35 years of experience in geological consulting for resource companies and, as the principal of OreQuest Consultants, was responsible for technical reports on Portugal’s Panasqueira tungsten mine. He is a past President of the Canadian Council of Professional Geoscientists and has been a consultant to the BC Securities Commission and the TSX Venture Exchange.
Jonathan Henry – Advisory Committee
Mr. Henry has over 18 years of experience in the international mining industry including the responsibility for execution of exploration, development and M & A activities. He currently serves as President and CEO of Gabriel Resources Ltd. and is a former CEO of London-listed Avocet Mining PLC with responsibilities including the managment of the spin-off of all tungsten assets into Primary Metals Inc.
Stuart Omsen – Investor Relations, Mammoth Market Advisory Corp.
