Buchans acquires surface rights over portion of Plymouth manganese deposit

    




 Trading Symbol: TSXV: BMC Shares Outstanding: 166,283,160 

 WINDSOR, NS, July 26, 2012 /CNW/ - Buchans Minerals Corporation  ("Buchans Minerals" or the "Company"), is pleased to announce the  acquisition, through its wholly-owned subsidiary, Canadian Manganese  Company Inc. ("CMC"), of property representing the surface rights over  a portion of the Plymouth manganese deposit on the Company's Woodstock  property in New Brunswick, Canada. The acquired property covers an area  of 130 acres of forested land and was acquired from four vendors for  aggregate consideration of $380,000, an upfront bonus of $10,000 and  40,000 warrants ("Warrants"). Each Warrant is exercisable into one  common share of the Company at a price of $0.10 for five years from the  date of issuance. In addition, CMC has granted to the vendors,  collectively, a one percent gross sales royalty upon commencement of  commercial production on the acquired property. CMC retains certain  rights to buyback half of the royalty. The transaction is subject to  the approval of the TSX Venture Exchange. All securities issued  will  be subject to a hold period of four months and a day from the date of  issuance. The Plymouth deposit is one of three deposits acquired by the Company in  2010 and located within the Company's 100% owned Woodstock Manganese  mineral claims covering an area of 14,331.8 acres (5,800 hectares). 

 Project Overview Based on historical work, these deposits potentially represent one of  the largest undeveloped manganese resources in North America.  In 1957,  previous operators, Strategic Manganese Corporation, estimated a  non-43-101 compliant, historic, uncategorized resource estimate of 51.2  million short tons (46.5 million tonnes) averaging 10.9% Mn (manganese)  and 13.3% Fe (iron) for the Plymouth deposit.  In addition, Strategic  Manganese Corporation estimated the North Hartford deposit to contain  50 million short tons (45 million tonnes) grading 8% Mn and 12% Fe, and  the South Hartford deposit to contain 50 million short tons grading 8%  Mn and 12% Fe((1)). 

 Buchans Minerals is evaluating the Plymouth deposit with a view to  potentially producing electrolytic manganese metal ("EMM") by utilizing  hydrometallurgical leaching technologies that are currently in common  use throughout the EMM industry. To date Thibault & Associates Inc. of  Fredericton, New Brunswick ("Thibault") has completed a comprehensive  bench scale hydrometallurgical program on behalf of Buchans Minerals  that successfully demonstrated that, at optimum leach conditions, leach  recoveries averaging 96.6% (range of 94% to 98%) could be achieved  using a single stage sulphuric acid leach (see May 3(rd), 2012 news release). In addition, the leach solution purification  portion of the test program resulted in the production of a high purity  manganese sulphate electrolyte, which is expected to produce high grade  EMM, based on Evan's Diagram predictions, at greater than 99.7%  manganese content. Based on the results of the bench scale test program  and mass balance modeling of the proposed hydrometallurgical process,  the overall recovery of manganese is expected to be approximately 90%. 

 Based on the bench scale test program results and with the use of many  conventional unit operations in the design of the process block  diagram, Thibault have established ore grinding requirements, estimated  reagent consumption levels, developed block diagrams, established  theoretical energy requirements and produced a dynamic economic model  which simulates the process flowsheet and quantifies conceptual  operating and capital costs. The model has proven invaluable in  optimizing conditions that may maximize the predicted economics of the  project. A treatment rate of 3,000 tpd producing about 100,000 tpa EMM  over thirty years is currently being evaluated. Thibault have  identified a number of additional process refinements that may further  optimize the technical and economic viability of the hydrometallurgical  process. Buchans Minerals intends to pursue such refinements in the  near future. 

 Minco Evaluation Following an announcement on April 30, 2012, Buchans Minerals has  granted Minco plc. ("Minco") the exclusive right, for a period of six  months (ending October 31(st), 2012), the right to conduct a full evaluation and due diligence on the  Woodstock manganese property with a view to potentially entering into a  joint-venture agreement with Buchans to develop the Woodstock manganese  project. Minco has paid Buchans Minerals $1 million for the exclusive  six month option, which funds may be used during the option period  primarily for the advancement of the Woodstock property. 

 Minco are currently reviewing the Company's reports on the Woodstock  property that include a Marketing report by the CPM Group, a  hydrometallurgical report by Thibault and an economic evaluation report  by Thibault. If during the exclusive Woodstock option period Minco  elects to develop the Woodstock project, the form and terms of a  joint-venture agreement will be negotiated between Minco and Buchans  prior to the expiry of the Woodstock Option. 

 Electrolytic Manganese Metal Market: ((2) (3)) The EMM market began to significantly expand in 2000 when stainless  steel production in China began to make use of EMM as a replacement for  nickel with great success. Since 2002 development of chrome-manganese  stainless steel production has been swift, dramatically increasing  demand for manganese and accelerating development of the EMM industry,  particularly in China. Worldwide demand rose from 250,000 tonnes in  2002 to over 1,532,000 tonnes in 2011, a 513% increase in 9 years, with  China supplying 97% of demand, primarily from low grade manganese  carbonate ores.( )The average manganese content of Chinese carbonate ores currently being  treated is 14% and declining at a rate of 1% manganese every two years.  ((3) )EMM world demand is forecast to steadily rise from over 1,532,000 tonnes  in 2011 to almost 2,839,000 tonnes in 2021(an average increase of  nearly 131,000 tpa) with the price predicted to increase from $1.53/lb  to $2.30/lb over the same period((2)). Mineralogical examination and sulphuric acid leach tests have shown  that the manganese contained in the Plymouth deposit 2011 drill core  composite sample occurs primarily as manganese carbonate. 

 There are currently a number of factors affecting the Chinese EMM  industry that highlight an opportunity for the launch of foreign EMM  production outside of China. These include diminishing tonnage and  grade of Chinese manganese carbonate deposits, high electricity costs  ($0.08/kwh) and erratic supply, high average mining costs ($86/t ore  average) due to narrow vein underground ore sources and open pit ore  sources with high stripping ratios  and increasing environmental  standards that are unattainable by the vast majority of small  processors in China. The Shanghai Metals Market identify in their  "China Manganese Industry Chain Analysis Annual Report for 2010" that  they believe production of Chinese carbonate ores will face increased  restrictions of production for the reasons identified above. 

  





    References:

    (1)  Historic resource estimates from an article written by K.O.J.
         Sidwell, 1957: The Woodstock, N.B., Iron-Manganese Deposits.
         Transactions of the Canadian Institute of Mining and Metallurgy,
         volume LX, 1957, pages 231-236. The article reports; the Plymouth
         resource estimate was compiled from data acquired from a total of
         17,388 feet (5,300 metres) of drilling; the North Hartford
         resource estimate was compiled from data acquired from a total of
         13 drill holes totaling 5,381 feet (1,640 metres) of drilling as
         well as gravimetric geophysical data, and; the South Hartford
         resource estimate was compiled from data acquired from a total of
         9 drill holes (footage undisclosed) as well as gravimetric
         geophysical data.

    (2)   Manganese Market Outlook, February 2012, CPM Group, New York,
         USA.

    (3)  China Manganese Industry Chain Analysis for 2010 and for
         2011-2012, Shanghai Metals Market.

          






 Qualified Persons and Quality Assurance and Quality Control:  J. Dean Thibault, P. Eng., Senior Process Chemical Engineer and  Principal of Thibault & Associates Inc., of Fredericton, New Brunswick,  is acting as a Qualified Person in compliance with National Instrument  43-101, with respect to the metallurgical bench scale test program  information contained in this release and has reviewed the contents for  accuracy. 

 Paul Moore, MSc, PGeo (NL), Vice-President Exploration for Buchans  Minerals Corporation, is acting as a Qualified Person in compliance  with National Instrument 43-101 with respect to the geological  technical information contained in this release and has reviewed and  approved the contents for accuracy. Much of the geological information  contained herein is, however, historical in nature and relies entirely  on data provided by other sources which have not and cannot be  independently verified at this time. As such, the historical resource  data discussed herein should not be relied upon, but are presented as  an indication of the exploration potential of the mineralization  described. 

 About Buchans Minerals  Buchans Minerals is an Atlantic Canada based resource company that has  three main assets that include its base metal properties near Buchans  in Central Newfoundland, its manganese property located near Woodstock  in New Brunswick and its 50% owned gold & copper Long Range Property in  central Newfoundland. 

 Forward Looking Statements  Information set forth in this news release may involve forward-looking  statements under applicable securities laws. Forward-looking statements  are statements that relate to future, not past, events. In this  context, forward-looking statements often address expected future  business and financial performance, and often contain words such as  "anticipate", "believe", "plan", "estimate", "expect", and "intend",  statements that an action or event "may", "might", "could", "should",  or "will" be taken or occur, or other similar expressions. All  statements, other than statements of historical fact, included herein  including, without limitation, statements about the potential of the  Woodstock project, are forward-looking statements. In addition, all  statements in this news release that address estimated resource  quantities, grades and contained metals, possible future mining, and  exploration and development activities are forward-looking statements. 

 By their nature, forward-looking statements involve known and unknown  risks, uncertainties and other factors which may cause our actual  results, performance or achievements, or other future events, to be  materially different from any future results, performance or  achievements expressed or implied by such forward-looking statements.  Such factors include, among others, the following risks: the need for  additional financing; operational risks associated with mineral  exploration; fluctuations in commodity prices; title matters;  environmental liability claims and insurance; reliance on key  personnel; the potential for conflicts of interest among certain  officers, directors or promoters with certain other projects; the  absence of dividends; competition; dilution; the volatility of our  common share price and volume and the additional risks identified the  management discussion and analysis section of our interim and most  recent annual financial statement or other reports and filings with the  TSX Venture Exchange (the "Exchange") and applicable Canadian  securities regulations. Forward-looking statements are made based on  management's beliefs, estimates and opinions on the date that  statements are made and Buchans Minerals undertakes no obligation to  update forward-looking statements if these beliefs, estimates and  opinions or other circumstances should change, except as required by  applicable securities laws. Investors are cautioned against attributing  undue certainty to forward-looking statements. 

 Neither the Exchange nor its Regulation Services Provider (as that term  is defined in the policies of the Exchange) accepts responsibility for  the adequacy or accuracy of this release, and no securities regulatory  authority has either approved or disapproved of the contents of this  release. 

   

BUCHANS MINERALS CORP.


CONTACT:  Buchans Minerals Corporation.Warren MacLeod, President & CEOPh: [phone]Windsor, Nova Scotiawww.buchansminerals.com 


    

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