Levon Resources

Levon Resources Ltd. (TSX:LVN) (“Levon” or “the Company”) is pleased to announce the 2018 updated NI 43-101 mineral resource estimate and a 2018 Preliminary Economic Assessment (“PEA”) for the Cordero  silver, zinc, lead, and gold porphyry project,  located 35 kilometers northeast of Hidalgo Del Parral, Chihuahua State, Mexico.  Levon expects to continue its evaluation of the Cordero flagship project with the intent of advancing it to the prefeasibility or feasibility stage, and to seek a strategic partner. The timeline and estimated capital required to advance the project to the next stage are under review. The 2018 resource update includes the 2014 Cordero NI 43-101 resource (news release of October 20, 2014) and the results of 2017 infill resource drilling (news release of September 26, 2017).

Mineral resources as of February 12, 2018 for the Cordero project are summarized in Table 1 as follows:

Table 1 Cordero Project Mineral Resources ⁽¹⁾

 (1) Totals may not sum due to rounding.

• The 2018 updated Cordero global resource (Table 1) reports indicated & inferred mineral resources of 1,272 million tonnes (t) at a silver equivalent (AgEq) grade of 37.4 g/t AgEq at a cutoff grade of 15 g/t AgEq using metal prices of $ 20/oz Ag, $1.20/lb zinc (Zn), $1.00 /lb lead (Pb) , and $1,250/oz gold (Au).
• The 2018 resource includes 2017 drilling results and represents an increase of the indicated & inferred contained metal compared to the 2014 resource, of 12% Ag ounces, 37% Zn pounds, 10% Pb pounds and 13% Au ounces.

The Cordero resource is porphyry type mineralization hosted by four intrusive and volcanic centers within a central part the Cordero Porphyry Belt (the “Belt”).  The mineralization formed as the Belt was formed.  The resource is exposed at surface within a constructional volcanic topographic ridge that is still preserved.

The project is being evaluated in the context of Cordero PEA Highlights:

1. A sub-set of the indicated and inferred mineral resource was used to develop an open pit mining plan at a rate of 40,000 tonnes of mill feed per day, with flotation processing to create high-quality lead and zinc concentrates.  This mining rate is identical to the mining rate in the 2013 PEA update (news release of May 15, 2013).  Mineral concentrates will be sold to offshore smelters.
2. Average annual production of 8 million ounces of silver, 44,788 tonnes of zinc (99 million lbs) in concentrate, 31,158 tonnes of lead (69 million lbs) in concentrate and 11,900 ounces of gold.
3. Economic analysis for the updated study are based on $20/oz silver, $1.30/lb zinc, $1.00 lead, and $1,300/ oz gold.
4. The updated mine plan for the updated 2018 PEA, which is scheduled over a 29 year mine life includes total mineralized material of 417.5 million tonnes at a 46.5 g/t silver equivalent, producing concentrates containing a total of 231 million ounces silver, 2,863 million pounds of zinc, 1,992 million pounds of lead, and 0.35 million ounces of gold.
5. The waste to mill feed tonnage ratio is 0.98:1 since the resource crops out at the surface. The resource has not been drill delineated on its perimeter, and the modeled strip ratio includes undrilled areas in the modeled open pit as waste. The modeled open pit for the PEA measures –2000 m long x 1300 m wide x 380 maximum depth.
6. Metallurgy is simple (side by side lead and zinc conventional floatation mills) with 88% overall recoveries after three rounds of bench-scale testing.
7. Capital costs estimated at $575 million for initial project capital including mine, plant, TSF, and owners costs, and $295 million for sustaining capital over the mine life.
8. Average annual after-tax cash flow of $55.2 million over 29 years.
9. Average operating mining cost of $1.18 per tonne, a plant operating cost of $6.26 per tonne, and a G&A cost of $1.12 per tonne.  Average annual cash operating costs are $198 million.  The average annual operating cost including royalties.
10. The base case economic estimate is an after tax net present value of $387 million, using a 7.5% discount rate, and an after-tax internal rate of return of 15.7% with a payback period of 4.84 years.
11. An upside silver price of $25/oz yields an after tax net present value of $683 million, using a 7.5% discount rate, and an after-tax internal rate of return of 21.5% with a payback period of 3.9 years.
12. Project infrastructure includes a good road network between Hidalgo del Parral and the mine site.  Power transmission will require a 232 kV extension of 75 km to the mine site substation.  Skilled mine labor is available from Hidalgo del Parral and other nearby communities in southern Chihuahua.
13. Levon owns all claims that cover the Cordero district, which total 37,000 hectares.
14. Please refer to “Non-GAAP Financial Measures” in this press release.

The 2018 Cordero PEA supersedes the 2013 PEA update, which was written before Levon consolidated the current 100% ownership of all claims in the district to complete 2014 drilling and a 2014 resource update (news release of October 20, 2014). The 2018 PEA includes the 2018 resource and re-evaluates the Cordero Project in the context of a long-term silver, zinc, lead, gold project designed to world standards.

The 2018 PEA includes a refined geologic model, the updated 2018 Mineral Resource estimate, updated process recovery, and revised mining and processing costs.  The tailings disposal facilities remain unchanged.  While a portion of the data generated for the 2013 PEA Update study provided support for some of the assumptions incorporated into the 2018 PEA, the mining, processing, geotechnical, hydrological, social, and capital and operating cost parameters are revised and reported in the 2018 PEA report.

The 2018 PEA is preliminary in nature, that it includes inferred 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, and there is no certainty that the preliminary economic assessment will be realized.   Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Independent Mining Consultants (“IMC”) and M3 Engineering and Technology Corporation (“M3”), Tucson, Arizona have been the principle engineering firms on the project since 2010 (after Cordero’s 2009 discovery).  IMC and M3 worked together on the 2018 update;  IMC calculated the updated 2018 resource estimate and  M3 completed the PEA update.

About Levon Resources Ltd.

Levon’s strategy is to explore and develop quality precious metals assets in North America. The Company is listed on the TSX as LVN.

Technical Disclosure

Technical information in this press release has been approved by Daniel H. Neff, P.E., Chairman of the Board of M3, a Qualified Person as defined by NI 43-101.

Mineral Resource estimates reported herein have been classified as Indicated or Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters.  Mineral Resources used for estimating project economics reported herein are based on inputs that include metallurgical performance, geologic and geotechnical characterization, operational costs, and other economic parameters. The company is not currently aware of any known factors that are reasonably likely to have a negative material impact on the Company’s Mineral Resources. The Mineral Resource estimate was prepared in accordance with NI 43-101 and classifications adopted by the CIM Council.

Levon will file a technical report with respect to the updated resource estimate and PEA within 45 days.

For further information, contact the Company IR Direct at 604-682-2991, or main office number 778-379-0040.

ON BEHALF OF THE BOARD

“Ron Tremblay”
_____________________________
Ron Tremblay
President and Chief Executive Officer

Neither the Toronto Stock Exchange (the “TSX“) nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

This news release contains “forward-looking information” and “forward-looking statements” (together, the “forward looking statements”) within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995, including our belief as to the extent and timing of various studies including the PEA, and exploration results, the potential tonnage, grades and content of deposits, timing and establishment and extent of resources estimates. These forward-looking statements are made as of the date of this news release and the dates of technical reports, as applicable. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. While we have based these forward-looking statements on our expectations about future events as at the date that such statements were prepared, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements. 

One of the frustrations of exploration is assembling a highly prospective area, doing the work and realizing that there is a key piece of land which you don’t own. Ron Tremblay, CEO of Levon Resources, (T.LVN) was in exactly that position for several years.

“We didn’t have the central claim. We did a PEA without that land and we came up with an Internal Rate of Return of 18%. But we couldn’t access some of the best material.” said Tremblay.

Tremblay was referring to Levon’s 37,000 hectare, 100% owned, Silver, Gold, Zinc, Lead property in Chihuahua State, Mexico. The Cordero property is five kilometres from a major highway, has a power line running through it and is near a town with a population of at least 150,000 which has been supplying miners for centuries.

The last resource estimate was prepared in 2014 and disclosed; Silver: 488.5 M oz indicated, 44.4 M oz inferred Gold: 1.37 M oz indicated, 84,000 oz inferred Zinc: 9.0 B lbs indicated, 663.3 M lbs inferred and Lead: 4.7 B lbs indicated, 440.3 M lbs inferred. This estimate, and the subsequent PEA, was based on the results of 244 drill holes encompassing 118,937 meters of core drilling.

Even before Levon acquired the central claim on July 9, 2013, the Cordero project was a world-class silver resource and a huge zinc resource, with excellent recoveries in a good jurisdiction with great infrastructure. But the resource estimate and PEA came out during 2014 which was one of the worst periods the junior exploration market has ever experienced.

“The market was just not interested in precious metals,” said Tremblay, “So we didn’t continue to spend money on the property. Our share price had backed off and the market conditions were terrible.”

“A couple of years later the market showed signs of life and the silver price was firming. And we’ve seen an improved price for lead and zinc,” said Tremblay. “Now we have gone back to work.”

“We were able to purchase the central claim for 2 million dollars with no residuals.”

The order of battle is pretty straightforward, “We do more drilling and update the resource estimate. Then we do a revised PEA for the entire resource,” said Tremblay. “We expect that in the new PEA the stripping ratio will improve and we’ll have better grade material. If we improve the strip ratio to .8/1 we’ll improve our Internal Rate of Return. We have excellent metallurgy with high recoveries from testing. Grade is only part of the story.”

“We plan a mill throughput that will project at least a 25-year mine life,” said Tremblay. “We see 40,000 tons per day, ramping up to 80,000 tons after 7 years as the goal with an approximately 90% recovery rate. Our deposit does not need to be ground fine for processing.”

Tremblay is confident that with good recoveries, a low strip ratio and solid grades, the new PEA could see a much improved internal rate of return. “Compared to other, similar, projects our IRR could be substantially higher,” said Tremblay.

With the firming prices of zinc and lead, the Cordero property seems to check all the boxes. “We don’t need to raise capital,” said Tremblay. “We have approximately 10 million US in cash and marketable securities and our drilling program will cost 1-2 million per year. Essentially, this project is a call on silver. But we are not relying on just one metal, 9 billion pounds of zinc is very attractive.”

“What we have here is a big growth curve with no immediate need to finance,” said Tremblay. “But our expertise is in mineral exploration, we’re not miners. We will look for a merger partner with mining expertise.”

A deal with a major is the goal and Levon has been careful to keep its share issuance reasonable, “We have 121 million shares out with 40% being very closely held. I personally hold better than 10%,” said Tremblay.

With the revamped PEA anticipated before Christmas and the metals market and junior market strengthening, a merger scenario is looking very positive.

“Our job now is to make people aware of the project,” said Tremblay. “We are now ready to help them understand the true value of Cordero.”

That value could be parlayed into a straight buy out or a “share deal” but Tremblay is not interested in a joint venture. As the exploration work and the economic feasibility of the project are firmed up Tremblay is confident that a larger company will want to become the operator at Cordero. It is just a matter of the right company seeing the project as a good fit. And because Levon has plenty of cash in the bank, there is no need to rush. Finding the right deal to maximize shareholder value will take as long as it takes. Tremblay wants to do a deal, but only something that makes sense for all involved.

Levon Resources Ltd. (“Levon” or “the Company”) (TSX:LVN)(OTCQX:LVNVF) Levon is pleased to announce results of the 2017 core drill program (news release of May 15, 2017) at the Cordero Ag, Zn, Pb, Au discovery, 35 km north of Hidalgo Del Parral, Chihuahua, Mexico. Complete hole assays have been returned. The drill results are conformable with the grid drilling results of the 2014 Cordero resource (the “Resource”) (news release of May 15, 2017) and extend a Au (gold) enriched sulphide zone in a northern part of the Resource (Figures 1 and 2).

The Company completed a total of 5,655 m of core in 18 infill core holes within the central part of the Resource (Figure 1), aimed at better definition and exploration for improved grades. We have learned that a gold enriched sulphide zone forms a key part of the Resource and extends from the Pozo de Plata Diatreme into the Cordero Felsic Dome toward the higher grade Aida feeder zone identified in past drilling (news release of April 30, 2014).

The 2017 drill holes also tested the youngest rhyolite intrusives within the composite Dome complex to the south, which also returned significant by-product gold results.

The ongoing Resource starter pit studies by independent Mining Consultants (IMC) of Tucson in collaboration with M3 indicate by-product gold within the starter pits has a significant impact on pit shapes, modeled production scheduling and projected starter pit economics.

The gold zone is defined by 3D contouring of the Au block model of the Resource. Inspection of 2017 drill results support projection of the zone through 350m on strike to the NE (Figure 2). The gold zone extension drill results are highlighted by four holes defining the projected extension (Figure 2, Table 1).

Table 1. 2017 drill hole assay composites arranged from SW to NE within the projected Au enriched sulphide zone extension of about 350 m from the Pozo de Plata Diatreme into the Cordero Dome toward the Aida mineralization feeder zone (Figure 2). Widths are drill hole widths reported in meters. True widths are not known. AgEq gpt (silver equivalents gram per tonne) are calculated on the basis of 2014 Resource metal prices, mining costs, projected mill recoveries, transportation charges and NSR deductions used in the 2014 resource calculations considering a $6 NSR cutoff.

Other holes (C17_275, C17_276) began testing the youngest rhyolite intrusives within the composite Cordero felsic dome to the south. The holes also intersected significant near surface by-product grade Au (Figure 1) within the modeled starter pits (Figure 2). Assay composites of the drill hole intercepts are summarized in Table 2.

Table 2. 2017 drill hole assay composites in the southern part of the Cordero Dome (Figure 2). Widths are drill hole widths reported in meters. True widths are not known. AgEq gpt (silver equivalents gram per tonne) are calculated on the basis of 2014 Resource metal prices, mining costs, projected mill recoveries, transportation charges and NSR deductions used in the 2014 resource calculations considering a $6 NSR cutoff.

The 2017 drill results highlight the need for additional infill Resource drilling to completely define the Resource internally. The Resource has yet to be delineated along its perimeter or at depth. Cordero remains an advanced stage exploration project with the Resource, proximal porphyry targets beneath the Resource, and outlying targets, on the 137,000 hectare district scale property owned by Levon.

“As metal prices rebound our strategic focus has been to continue to define and improve the Cordero Resource. We expect the 2017 drill results will extend an Au enriched sulphide zone from the Diatreme into the Dome that will have a positive effect on economic projections in the continuing starter pit analysis. The 2017 Resource infill drilling also adds to our exploration understanding of the deposit. Our next step is to provide a 2017 43-101 compliant Resource update to the market and continue the starter pit evaluation toward producing Preliminary Economic Assessment. We are pleased with the 2017 drill results and the improving metals market, which fit our plans to improve Levon shareholder value. We believe Cordero, our 100% owned key asset, is a remarkable project with upside continuing to be realized” says Ron Tremblay, President and CEO.

The 2017 drill results, including 43-101 compliant quality assurance, quality control sample results (QAQC), are being forwarded to IMC to begin the Resource update. All assays were conducted by ALS Chemex, Chihuahua, Mexico. QAQC referee analyses by an independent lab (ACTLabs, Zacatecas, Mexico) are underway.

IMC is starting to work with the 2017 drill results to provide an updated 43-101 compliant 2017 Cordero resource that will likely be completed by Q4.

Figure 1. Index map of 2017 drilling, 2014 Resource boundary (not yet delineated), 2016 modeled starter open pits being evaluated, and 243 past drill holes defining the 2014 Resource.

To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/1102742_FIGURE-1.pdf

Figure 2. Map highlighting by-product grade Au results of 2017 drilling. The starter open pits being modeled by IMC (Figure 1) show the Au in the Pozo de Plata Diatreme significantly improves projected economics of the pits, as well as their design and mine scheduling in the ongoing, in-house studies. By inspection of drill hole assays, 2017 drill holes will likely extend a by product Au zone from the Pozo de Plata Diatreme into the Cordero Dome Complex toward the Aida Feeder Zone discovered in 2014 drilling.

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/1102742_FIGURE-2.pdf

About Levon Resources Ltd.

Levon is a well-funded gold and precious metals exploration Company, exploring the company’s 100% owned flagship Cordero bulk tonnage silver, gold, zinc, and lead project near Hidalgo Del Parral, Chihuahua, Mexico. Cordero hosts a porphyry Silver, Zinc, Lead, and Gold resource with indicated Resource of 488.5 million ounces of Silver, 9.0 billion pounds of Zinc, 4.7 billion pounds of Lead, and 1.37 million ounces of Gold.

Levon’s most recent mineral resource estimate is contained in a technical report prepared by IMC titled “Cordero Project September 2014 Mineral Resource Update, Chihuahua, Mexico” dated October 15, 2014, which was filed on the Company’s website www.levon.com and under the Company’s profile at www.sedar.com.

Vic Chevillon, AIPG QPG # 11054, the Company’s VP Exploration and a qualified person as such term is defined in NI 43-101 of the Canadian Securities Administrators, has reviewed and approved this news release.

ON BEHALF OF THE BOARD

Ron Tremblay, President and Chief Executive Officer

Neither the Toronto Stock Exchange (“TSX”) nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

This news release contains “forward-looking information” and “forward-looking statements” (together, the “forward looking statements”) within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995, including our belief as to the extent and timing of various studies including the PEA, and exploration results, the potential tonnage, grades and content of deposits, timing and establishment and extent of resources estimates. These forward-looking statements are made as of the date of this news release and the dates of technical reports, as applicable. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. While we have based these forward-looking statements on our expectations about future events as at the date that such statements were prepared, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements.