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Deep-South Resources Inc
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Close 2021-06-09 C$ 0.205
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Deep-South drills 156 m of 0.46% CuEq at Haib

2021-06-10 08:04 ET - News Release

Mr. Pierre Leveille reports


Deep-South Resources Inc. has provided the second batch of assay results from its current drilling program at its Haib copper project in southern Namibia.

Significant copper and molybdenum intersections include:

  • HM03: 0.46 per cent copper equivalent over 156 metres, including 24 metres at 0.65 per cent copper equivalent;
  • HM02: 0.39 per cent CuEq over 74 metres, including six metres at 0.73 per cent CuEq;
  • HM04: 0.43 per cent CuEq over 26 metres, including four metres at 0.87 per cent CuEq.

Pierre Leveille, president and chief executive officer of Deep-South, stated: "We continue to have success with our active drill program identifying thick, higher-grade zones. We are consistently intercepting significantly higher grades than the average grade of our NI [National Instrument] 43-101 indicated resource that stands at 0.31 per cent Cu. The higher-grade zone in pit 2 extends significantly further west and at depth than previously demonstrated. It's increasingly apparent that the use of vertical drilling in the past missed many of the near-vertical structures contained within the broader mineralization of the project. Those near-vertical structures so far are proving to be associated with a higher grade of copper than contained within the current resource. Additionally, the presence of molybdenum has been confirmed with high Mo grades obtained in association with structures and alterations."

These three holes for which assay results have been received cover about 684.11 metres and were drilled on the central mineralized portion of the deposit to better delineate the extension of this zone to other mineralized areas located to the northwest and southwest. The holes have successfully encountered intercepts of mineralization from bedrock or near bedrock surface. Assay results for the holes are in the attached table.

                              SIGNIFICANT CU INTERSECTIONS

Hole                    From          To       Width  (1)   CuEq (2)      Cu          Mo
No.    Zone               (m)         (m)         (m)         (%)         (%)         (%)

HM02   Main               64          86          22         0.4         0.4       0.001
       Including          80          84           4        0.95        0.95       0.001
       Main              110         184          74        0.39        0.35       0.013
       Including         118         124           6        0.72        0.66       0.017
       Including         162         168           6        0.73        0.56        0.05
       Main              216         238          22        0.43         0.4       0.009
HM03   Main               26       182.5       156.5        0.46        0.41       0.015
       Including          26          38          12        0.61        0.59       0.006
       Including         100         130          30        0.58         0.5       0.023
       Including         136         148          12         0.6        0.57        0.01
       Including         152         176          24        0.65        0.64       0.004
HM04   Main              176         182           6         0.5        0.44       0.017
       Main              194         204          10        0.41        0.41       0.001
       Main              212         238          26        0.43         0.4       0.008
       Including         232         236           4        0.87        0.76       0.034

1. Width refers to intersection width; true widths have not been determined. 

2. CuEq (copper equivalent) has been used to express the combined value of copper and 
   molybdenum and is provided for illustrative purposes only. No allowances have been 
   made of recovery losses that may occur should mining eventually result. Calculations 
   use metal prices of $3 (U.S.) per pound copper, $10 (U.S.)/lb molybdenum using the 
   formula: CuEq per cent is equal to Cu per cent plus (Mo per cent ($10 divided by $3)). 

Borehole locations

From a figure available on-line it can be seen that all three holes were located in the pit 2 target with HM03 testing the westward extension of the higher-grade portions and HM02 and HM04 the extension of the same northwestward toward the pit 3 target. These drill holes have significantly widened (up to 70 m) the 0.3 per cent and 0.4 per cent Cu pit shells within the top 250 m of the resource.

Holes HM02 and HM03

Located on a north-south section line on the western edge of the pit 2 target, HM03 was positioned to test the westward extension of the higher-grade portion of this target while HM02 tested the extension toward pit 3 to the northeast.

HM03 encountered good grades almost from surface, which continued for over 156 m to the end of the hole. HM02 shows that the higher-grade zone in pit 2 extends significantly farther west than previously demonstrated as well as with depth. Mo grades are highly variable from a low of 0.001 per cent to a high of 0.149 per cent, but averaging 0.014 per cent over the full length.

Results from HM02 show that although the 0.3 per cent Cu contour extends unbroken between pit 2 and pit 3, the 0.4 per cent Cu contour does not. Additionally, the 0.3 per cent Cu contour extends about 40 m farther toward the northeast than demonstrated previously, as well as with depth. Mo grades are muted for most of the hole (mean of 0.006 per cent) with two intervals returning Mo grades of over 0.05 per cent.

Hole HM04

Also drilled on the pit 2 target, HM04 was planned to test the extension of the 0.4 per cent Cu contour northward as well as the continuity of the contour between pit 2 and pit 3. Results were very similar to HM02, demonstrating that (1) the 0.4 per cent Cu contour is broken between pit 2 and pit 3; (2) the limit of the 0.3 per cent Cu contour is significantly larger than previously demonstrated; and (3) the 0.3 per cent Cu contour is continuous with depth. Significant Mo grades are almost entirely absent with the hole and had a mean Mo grade of 0.003 per cent for its full length.

Drill program update

Three drill rigs are active on the property. Nineteen holes have been completed and two holes are currently in progress. Results for eight holes have been received and released. A further 11 holes have been completed, processed and submitted to the lab for assay with results pending. The program is planned for 10,000 metres, of which 40 per cent has been completed to date. The Haib copper deposit is one of the oldest porphyry deposits in the world at 1.8 billion years old (Archean). Over time, it has seen several transformations resulting in shearing and faulting events. Those events have concentrated the mineralization along the shears and faults.

The specific focus of this drilling campaign is to further delineate and grow the higher-grade zone(s) of the Haib deposit uncovered by Deep-South in 2019 with the ultimate goal of establishing a measured resource over that higher-grade section of the deposit. The company also plans to drill a number of holes to depths greater than 350 metres to test the vertical extent of the deposit.

The MSA Group of South Africa has been appointed to provide an updated NI 43-101 resource estimation after the drilling program completion.

Quality control

All drill cores are logged, photographed and cut in half with a diamond saw. Half of the cores are bagged and sent to ALS Laboratories Ltd. in Johannesburg, South Africa, for analysis (SANAS Accredited Testing Laboratory, No. T0387), while the other half is quartered with one-quarter archived and stored on site for verification and reference purposes while the other quarter will be used for metallurgical test work. Thirty-three elements are analyzed by induced coupled plasma (ICP), utilizing a four-acid digestion, and gold is assayed using a 30-gram fire assay method. Duplicate samples, blanks and certified standards are included with every batch and are actively used to ensure proper quality assurance and quality control.

About the Haib copper deposit

The Haib copper project hosts a porphyry copper deposit containing an NI 43-101-compliant indicated resource estimate of 457 million tonnes at 0.31 per cent Cu for 3.12 billion lb copper and an inferred resource estimate of 342 million t at 0.29 per cent Cu for 2.19 billion lb copper. Deep-South disclosed a robust preliminary economic assessment (PEA) on Dec. 15, 2020. The press release disclosing the NI 43-101 resource estimation and the PEA reports can be seen at the company's website.

Please note that:

  • Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for minability, selectivity, mining loss and dilution. These mineral resource estimates are based on indicated mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. However, there is no certainty that these indicated mineral resources will be converted to measured categories through further drilling, or into mineral reserves, once economic considerations are applied.
  • There is no certainty that the preliminary economic assessment will be realized.

Qualified person

Dean Richards, PrSciNat, MGSSA -- BSc (honours), geology, is the qualified person for the Haib project as defined by National Instrument 43-101 and has approved the technical disclosure contained in this news release.

About Deep-South Resources Inc.

Deep-South Resources is a mineral exploration and development company. Deep-South holds 100 per cent of the Haib copper deposit in the south of Namibia. Haib is one of the largest undeveloped copper deposits in Africa.

The recent preliminary economic assessment showed that at a price of copper of $3/lb, it generates an after-tax net present value of $950-million and an after-tax IRR (internal rate of return) of 30 per cent. At $4/lb, it generates an after-tax NPV of $1,650-million and an after-tax IRR of 42 per cent. (See the press release available on the company's website.)

Deep-South's growth strategy is to focus on the exploration and development of quality assets in significant mineralized trends and close to infrastructures in stable countries. In using and assessing environmental friendly technologies in the development of its copper project, Deep-South embraces the green revolution.

We seek Safe Harbor.

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