May 16 2019
Solitario Zinc Corp. (("Solitario") is pleased to announce that Nexa Resources ("Nexa") has begun the 2019 phase of the most aggressive surface drilling program in the history of the Florida Canyon zinc project. Three core rigs with helicopter support will be utilized for the 2019 program. The Florida Canyon Project in northern Peru is held in a joint venture between Solitario (39%) and Nexa (61%), the world's fourth largest zinc miner.
The 2019 program consists of drilling about 35 core holes totaling approximately 15,000 meters (49,000 feet). Proposed drilling is designed to test highly prospective resource expansion opportunities and is focused on near-vertical zinc-lead replacement bodies and significant gaps and offsets within nearly horizontal manto-style mineralization. All targets are within and around the currently defined high-grade zinc-sulfide resource. In addition to drilling, Nexa is funding a significant road building program that will upgrade 31 kilometers of previously constructed road, add another 10 kilometers that will complete access to mineralized areas, and construct first-ever road access to important community centers within the project area. Nexa is the manager of the project.
Significant progress in interpreting Florida Canyon mineralization was made in 2018 with the relogging of all previously drilled core totaling 117,000 meters in 487 core holes. An informative video found here describes the conceptual drilling program and the local and property-wide exploration potential.
Chris Herald, President and CEO of Solitario, commented:
This aggressive and highly prospective drilling program has the potential to increase the size of the deposit as well as enhance the confidence level of the resource. We look forward to a steady stream of positive results throughout much of 2019. This program is the culmination of an intensive 18-month effort to better understand the geometry of existing mineralization and expand the potential scale of the project, which we believe is significantly larger than is currently defined. We are excited about the impact this drilling could have on project economics. We are very pleased with the cooperation and support that the local communities have confirmed with the signing of a new long-term community agreement."
Mr. Walt Hunt, COO for Solitario Zinc Corp., who is a qualified person as defined by National Instrument 43-101, has reviewed the technical information contained within this release.
Terms of the Florida Canyon Joint Venture
The Florida Canyon Project is held in a joint venture between Solitario (39%) and Nexa Resources (61%) (("Nexa") NYSE: NEXA; TSX: NEXA), the world's fourth largest zinc miner. Nexa can earn a 70% interest in the Florida Canyon project by continuing to fund all project expenditures and committing to place the project into production based upon a positive feasibility study. After earning 70%, and at the request of Solitario, Nexa has further agreed to finance Solitario's 30% participating interest for construction through a project loan. Solitario will repay the loan facility through 50% of its net cash flow distributions from production. To accelerate the development of the Florida Canyon project, Solitario and Nexa have agreed to jointly fund, 30%-70% respectively, the cost for the 2018/2019 drilling program. Funding that Solitario contributes towards this drilling program will be fully credited towards repayment of the construction loan facility that Nexa provides to Solitario for project construction.