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Variscan Recommences Underground Drilling: A Deep Dive into Zinc’s Future
Variscan Mines Ltd (ASX:VAR) has ignited excitement in the mining sector by recommencing underground drilling at its Udías Mine in northern Spain. This strategic move, marking an early 2026 milestone, underscores the company’s commitment to restarting zinc production at the Novales–Udías Project. As zinc prices show promising signs, with Trading Economics forecasting a price of $3,405.98 in 12 months, Variscan’s recommencement of drilling could be a pivotal step towards capitalizing on the metal’s potential.
The Significance of Underground Drilling
Underground drilling is a meticulous process that provides invaluable insights into the subsurface geology and mineral deposits. Unlike surface drilling, which offers a broader overview, underground drilling allows for targeted exploration and resource definition. This precision is crucial for optimizing mine planning, reducing operational risks, and maximizing the extraction of valuable minerals.
Variscan’s renewed drilling program at the Udías Mine is strategically focused on previously untested zones along existing underground development. The primary objective is to connect the Udías mineralization with the current Mineral Resource Estimate (MRE) and extend it towards the adjacent San José Mine. This approach could potentially unlock new high-grade zinc deposits and significantly expand the project’s overall resource base.
Udías Mine: Untapped Potential
A noteworthy aspect of Variscan’s drilling endeavor is that all drilling activities completed at Udías to date lie outside the existing MRE. This highlights the untapped potential of the mine and suggests that substantial zinc resources remain to be discovered. By systematically exploring these underexplored areas, Variscan aims to demonstrate the true extent of the Udías deposit and its economic viability.
The decision to resume drilling at Udías is underpinned by a series of encouraging underground results reported in 2025. These results, combined with the integration of 3D mine surveys, historical drilling data, face sampling, and recent Variscan drilling data, provide a solid foundation for the current exploration program. The geological similarities between Udías and San José further reinforce the belief that both mines are part of the same mineral system, increasing the likelihood of discovering additional zinc resources.
San José Mine Re-Start Study: A Pragmatic Approach
In parallel with the drilling activities at Udías, Variscan is making significant progress with the San José Mine Re-Start Study, which is approximately 95% complete. This study is a cornerstone of Variscan’s “Explorer–Producer” strategy, which aims to establish a pragmatic, low-capex restart capable of generating early cash flow while supporting scalable production growth and ongoing exploration.
The San José Mine, with its historical production and existing infrastructure, represents a valuable asset for Variscan. The Re-Start Study is designed to optimize the mine’s operations, minimize environmental impact, and ensure compliance with all relevant regulations. By adopting a phased approach, Variscan intends to gradually increase production at San José, generating revenue to fund further exploration and development activities across the Novales–Udías Project.
Zinc Market Dynamics: A Promising Outlook
The recommencement of underground drilling at Udías and the progress of the San José Mine Re-Start Study coincide with a favorable outlook for the zinc market. Zinc prices have been on an upward trend, driven by factors such as increased demand from the construction and automotive industries, supply constraints due to mine closures and production cuts, and growing investor interest in base metals.
According to Trading Economics, zinc rose to $3,229.35 USD/T on January 22, 2026, up 1.94% from the previous day. Over the past month, Zinc’s price has risen 4.16%, and is up 13.47% compared to the same time last year. Zinc is expected to trade at 3247.99 USD/MT by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 3405.98 in 12 months time.
However, it’s important to acknowledge that zinc price forecasts vary across different sources. For instance, Morgan Stanley has a more conservative outlook, forecasting an average zinc price of $2,900/ton in 2026. Despite these differing views, the overall sentiment towards zinc remains positive, with most analysts anticipating continued price strength in the coming years.
Strategic Implications and Future Prospects
Variscan’s decision to recommence underground drilling at Udías and advance the San José Mine Re-Start Study is a testament to the company’s strategic vision and commitment to creating long-term value for its shareholders. By expanding its resource base, optimizing its operations, and capitalizing on favorable market conditions, Variscan is well-positioned to become a significant zinc producer in the Iberian Peninsula.
The Novales–Udías Project, with its extensive land package, historical mining activity, and promising exploration potential, represents a unique opportunity for Variscan. The company’s focus on sustainable mining practices, community engagement, and environmental stewardship further enhances its appeal as a responsible and forward-thinking operator.
As Variscan progresses with its drilling program and mine restart efforts, investors and industry observers will be closely monitoring its progress. The company’s ability to successfully execute its strategy and deliver on its promises will ultimately determine its long-term success and its contribution to the global zinc market.
Navigating the Legal and Regulatory Landscape
Mining operations are subject to a complex web of laws and regulations, encompassing environmental protection, worker safety, and community relations. Variscan must navigate these legal and regulatory requirements diligently to ensure compliance and maintain its social license to operate.
Environmental regulations play a crucial role in shaping mining practices. Variscan must adhere to strict standards for waste management, water usage, and air emissions. The company must also conduct thorough environmental impact assessments and implement mitigation measures to minimize any adverse effects on the surrounding ecosystem.
Worker safety is another paramount concern. Variscan must provide a safe and healthy working environment for its employees, complying with all relevant occupational health and safety regulations. This includes implementing comprehensive safety protocols, providing adequate training, and conducting regular risk assessments.
Community relations are also essential for the success of any mining project. Variscan must engage with local communities, address their concerns, and ensure that they benefit from the project’s economic activities. This involves providing employment opportunities, supporting local businesses, and contributing to community development initiatives.
Failure to comply with these legal and regulatory requirements can result in significant penalties, including fines, project delays, and even the revocation of mining licenses. Therefore, Variscan must prioritize compliance and maintain a strong commitment to responsible mining practices.
Conclusion
Variscan Recommences Underground Drilling marks a significant step for the company. With zinc prices on the rise, Variscan is positioning itself to capitalize on the growing demand for this essential metal. The recommencement of drilling at Udías, coupled with the San José Mine Re-Start Study, reflects Variscan’s commitment to sustainable mining practices and its vision of becoming a leading zinc producer.