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Hessjøgruva Copper-Zinc-Cobalt VMS District

Capella Minerals 100%

Exploration-Stage Copper-Rich VMS in the northern Røros Mining District, Norway

Capella announced the acquisition of a 100% interest in the Hessjøgruva copper-zinc-cobalt (“Cu-Zn-Co”) project from local company Hessjøgruva AS on April 6, 2022.  The Hessjøgruva project is located approximately 20km SW of the Company’s 100%-owned Kjøli Cu-Zn-Co project (Figure 1) and was subject to exploration and drilling by former local mining companies (such as Røros Kobberverk AS) during the 1970’s. The project has essentially remained idle since the early-1980’s.

In early-July, 2022, Capella confirmed the granting of 20 square kilometres (“sq. km”) of exploration claims over the adjacent and past-producing Kongensgruve area. The central portion of the Kongensgruve claim block lies approximately 6km east of the Hessjøgruva project, contains a series of known copper-zinc-cobalt occurrences (including Rødalen, Fjellsjøen, and Muggruva), and also covers the site of a former mineral processing plant and tailings dam. A further application for 25 sq. km of exploration claims was made over open ground located to the south-southwest of the main Kongensgruve claim block and is currently awaiting approval.

Project Snapshot

Location

20km S of Ålen, Trøndelag Province, central Norway

Ownership

100% Capella Minerals Ltd
2.5% NSR to Hessjøgruva AS, with 0.5% purchasable for Euro 1M

Status

Exploration-stage

Deposit types

High-grade copper-rich VMS deposit

Host Rocks

Meta-volcanic and sedimentary sequences

Age

Cambro-Silurian, Ordovician orogeny

Main Economic Elements

Copper, Zinc, Cobalt (minor Silver, Gold)

Access

All weather paved highways and gravel roads

The Hessjøgruva property is favourably located adjacent to the main Trondheim-Røros highway and railway line. Low-cost hydroelectric power is also available in the district.

Hessjøgruva Project - Highlights

  • Capella has acquired a 100% interest in the exploration-stage Hessjøgruva Cu-Zn-Co project.
  • Systematic exploration (including drilling) was completed at Hessjøgruva in the 1970’s by previous operators including former local mining company Røros Kobberverk AS. Historical assaying was focused principally on copper and zinc, but not cobalt.
  • The copper-zinc-cobalt mineralization at Hessjøgruva is lenticular massive-sulfide (“VMS”)-type, identical to the mineralization type being targeted at Kjøli. The Hessjøgruva mineralization occurs primarily in three lenses (A-C, with Lens A hosting most of the high-grade mineralization; Figures 2&3), all of which extend from surface to >400m vertically below surface and all remain open down-dip. Mineralization is dominated by chalcopyrite, pyrite/pyrrhotite, and sphalerite, with Cu content observed to increase with depth in the deposit.
  • The average thickness of the highest-grade Lens A is approximately 10m1, with the thickest and highest-grade intercept reported from the historical drilling being 14.5m @ 4.35% Cu + 1.3% Zn (or 4.8% Cu equivalent2) (approximate true thickness) from 455.5m to 470m downhole in DDH-312. This Cu-Zn-Co mineralization remains open down dip.
  • As part of a due-diligence process, Capella completed a systematic resampling program of the Hessjøgruva drill core stored at the NGU storage facility in Løkken. A total of 113 quarter core samples were taken for analysis and confirmed: i) the reliability of copper and zinc grades reported from historical drilling, and ii) the existence of elevated cobalt concentrations (ranging from below detection limit to 0.1% Co) within the re-assayed core intervals.

1 Geological Survey of Norway Report 2007.023; The Hersjø ore deposit, evaluation of ore potential.
2 Copper equivalent grades have been calculated using 2022 Year-to-Date average copper and zinc prices of USD 9,900/T and USD 3,700/T, respectively, with no adjustment having been made for metallurgical recovery as these are unknown at this time (metal price data: London Metal Exchange,
www.lme.com).


Figure 1. Location map of the Hessjøgruva and Kjøli Projects, central Norway.


Figure 2. Plan view of diamond drill-holes in high-grade copper-zinc-cobalt mineralization in Lens A, with the surface projection of mineralization shown in Figure 4 also indicated (source: Geometric and Qualimetric Modeling of the Hessjø deposit; Nørsett, S.J. 2016; NTNU M.Sc. Thesis).


Figure 3. Section showing high-grade Cu-Zn-Co mineralization in Lens A (source: Geometric and Qualimetric Modeling of the Hessjø deposit; Nørsett, S.J. 2016; NTNU M.Sc. Thesis). Location of a potential future adit to access high-grade mineralized zones is also shown.

Terms of the Hessjøgruva Acquisition

Capella may acquire a 100% interest in the Hessjøgruva Cu-Zn-Co project in return for:

  1. Capella managing and funding exploration / development activities on the project.
  2. Capella paying Hessjøgruva AS a one-time amount of Euro 500,000 upon completion of a positive Bankable Feasibility Study.
  3. Capella providing Hessjøgruva AS with a 2.5% Net Smelter Royalty (“NSR”) on all future metal production from the project, retaining an option to buy-back 0.5% of this NSR at any time prior to the commencement of commercial production for Euro 1,000,000.
  4. Capella to cover the cost of annual property payments and basic administration costs.

Kongensgruve Staking – July 2022

Capella has been granted 20 square kilometres (“sq. km”) of new exploration claims over the adjacent and past-producing Kongensgruve area (Figure 4). The central portion of the Kongensgruve claim block lies approximately 6km east of the Hessjøgruva project, contains a series of known copper-zinc-cobalt occurrences (including Rødalen, Fjellsjøen, and Muggruva), and also covers the site of a former mineral processing plant and tailings dam. A further application for 25 sq. km of exploration claims was made over open ground located to the south-southwest of the main Kongensgruve claim block and is currently awaiting approval (Figure 4).

Figure 4. Capella explorations concessions (granted and pending) in the Kongensgruve area.

2022 and Beyond Work Program

The Company’s expected work plans for the Hessjøgruva project commencing immediately are:

  1. The completion of a Canadian National Instrument 43-101 (“NI 43-101”) compliant Mineral Resource Estimate (“MRE”). In addition to producing a formal MRE, this study would identify those areas where infill drilling is required (in order to potentially upgrade the category of the existing mineral inventory) in addition to determining where step-out drilling would have the highest probability of extending known mineralization.
  2. After the completion of the MRE and further recommended drilling, Capella would initiate a Preliminary Economic Assessment in order to evaluate potential mining, mineral processing, and infrastructure requirements of the project.
  3. Evaluate the possible construction of an adit at around the 700m level from the adjacent Hessdalen Valley, in order to provide direct access to the high-grade mineralized horizons and to facilitate further drill testing from underground.

Technical Report

Capella Minerals Hessjogruva Technical Report