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Deep-South Resources Inc
Symbol DSM
Shares Issued 145,449,100
Close 2021-06-11 C$ 0.223
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Deep-South's application to renew Haib licence rejected

2021-06-16 16:02 ET - News Release

Mr. Pierre Leveille reports

UPDATE ON DEEP-SOUTH HAIB COPPER LICENCE RENEWAL

Deep-South Resources Inc. has received notice from the Ministry of Mines and Energy of Namibia informing the company that its application for the renewal of exclusive prospecting licence No. 3140 has been denied, citing the company's inability to advance the licence to prefeasibility and complete the proposed drilling program as planned. The company has requested an urgent meeting with the Minister of Mines and Energy to review and reverse the decision. The company is convinced it is a misunderstanding. The minister has accepted a meeting to discuss the matter. The meeting should take place early next week.

The company maintains that the ministry was kept well apprised, with no objection on its part, of a proposed change from the prefeasibility study to an upgraded preliminary economic assessment and the commencement of a full feasibility study. Moreover, the ministry issued all permits required for the drilling program and is well aware that Deep-South has completed the drilling program.

Pierre Leveille, president and chief executive officer of Deep-South, stated: "In the context that the company is well funded and moving ahead with a large development program, the decision of the minister is surprising and certainly not in the best interest of the development of the mineral resources of Namibia. We believe that a meeting with the minister will remove any possible misunderstanding and the situation will be rectified in the shortest time frame possible. We are hopeful that our efforts to meet with the minister will reach a positive outcome."

In its application for renewal and subsequent representations made to the ministry, the company has clearly demonstrated that it adequately meets the criteria under the Minerals (Prospecting and Mining) Act (Namibia) to justify the renewal of its licence. Accordingly, the company is of the opinion that the refusal is unreasonable.

The company has demonstrated to the minister that during the past two tenures (from April, 2017, to April, 2021), it has invested $2-million with the completion of, among other things: a National Instrument 43-101 resource estimate; a preliminary economic assessment; a large two-ton sampling and heap-leach test; geological mapping; modelling; and an upgraded preliminary economic assessment. Furthermore, in its renewal application, the company has proposed a feasibility study program with a budget of $7.1-million. The program was under way with three drills and 42 employees on site. METS and CSIRO (Commonwealth Scientific and Industrial Research Organisation) of Australia have also begun metallurgical tests, bioleaching, high-pressure grinding roller tests and a flowsheet optimization program in two laboratories in Australia. Knight Piesold also has four scoping studies under way, covering: water usage; alternative power solutions; leach pad assessment; and environmental path to the ESIA. The company has also informed the ministry that at the completion of the feasibility study, it is planning to build a pilot plant on site for an estimated cost of $25.5-million.

As a result of the minister's refusal to renew the licence, the company has immediately suspended all work on site and hopes that the retrenchment of its employees will be avoided.

About Deep-South Resources Inc.

Deep-South Resources is a mineral exploration and development company. Deep-South's growth strategy is to focus on the exploration and development of quality assets in significant mineralized trends and in proximity to infrastructure in stable countries. In using and assessing environmentally friendly technologies in the development of its copper project, Deep-South embraces the Green Revolution.

We seek Safe Harbor.

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