TIDMEMH
RNS Number : 5577M
European Metals Holdings Limited
31 July 2017
For immediate release
31 July 2017
EUROPEAN METALS HOLDINGS LIMITED
QUARTERLY ACTIVITIES REPORT - JUNE 2017
HIGHLIGHTS
* Preliminary Feasibility Study confirms Cinovec as
potentially low cost Lithium Carbonate producer
* Grant of permits
* Infill drilling commenced
* Maiden Ore Reserve
* Board changes
* Interim funding
European Metals Holdings Limited ("European Metals" or "the
Company") (ASX & AIM: EMH) is pleased to announce continued
progress in the development of its 100% owned globally significant
Cinovec Lithium/Tin Project in Czech Republic during the three
month period ending June 2017.
PRELIMINARY FEASIBILITY STUDY CONFIRMS CINOVEC AS POTENTIALLY
LOW COST LITHIUM CARBONATE PRODUCER
The Company successfully completed the Preliminary Feasibility
Study and the results highlight that Cinovec can be a low cost
lithium carbonate producer. The highlights of the study are as
follows ($ figures quoted in USD):
$3,483 / tonne
* Net overall cost of production - Li(2) CO(3)
$540 M (post
* Net Present Value (NPV) - tax, 8%)
21% (post tax)
* Internal Rate of Return (IRR) -
* Total Capital Cost - $393 M
20,800 tonnes
* Annual production of Battery Grade Lithium Carbonate
-
* Study based on only 9.9% of defined Indicated Mineral
Resources
The completion of the PFS follows a comprehensive metallurgical
testwork campaign managed by European Metals. The PFS was
undertaken by independent consultants who are specialists in the
required areas of work. These included:
* Resource Estimation - Widenbar and Associates Pty Ltd
* Mining - Bara Consulting Ltd
* Front--End Comminution and Beneficiation ("FECAB") -
Ausenco Limited
* Lithium Carbonate Plant ("LCP") - Hatch Pty Ltd
The study is based upon a mine life of 21 years processing on
average 1.7 Mtpa of ore, producing 20,800 tpa of battery grade
lithium carbonate via a sodium sulphate roast.
GRANT OF PERMITS
The Company was informed in late January that the Cinovec South
resource estimate was added to the Czech State Register of Mineral
deposits, which was the first step towards achieving a mining
licence. As a next step, the Preliminary Mining Permit (PMP)
covering the majority of the Cinovec Project has now been awarded
by the Czech Ministry of Environment.
In addition, the Company was awarded an additional exploration
licence for the ground immediately south of the deposit which will
allow preparatory geotechnical work for the exploration adit,
including excavation of the adit itself when appropriate, to begin.
A de-watering permit has also been obtained from the Ohře River
Authority which will allow the Company to finalise the de-watering
process of the partially flooded underground historic mine shafts
well in advance to the commencement of operations.
INFILL DRILLING COMMENCES
The Company commenced a focused infill drilling program at
Cinovec South. There are six core drill holes for a total of 2,800m
planned in two areas where data density is low and there are 'gaps'
in the resource model. This program is expected to add high grade
resources in critical areas where mining will start and the results
will be utilized during the DFS program to optimize the current
mine plan.
MAIDEN ORE RESERVE
Based upon the Preliminary Feasibility Study undertaken for the
Cinovec Project, the Company declared a maiden Probable Ore Reserve
of 34.5 Mt @ 0.65% Li(2) O, as detailed below. The Probable
Reserves have been declared solely from the Indicated Mineral
Resource category and are classified based on a PFS level of study
and category of Mineral Resource.
CINOVEC ORE RESERVES SUMMARY
-----------------------------------------------------------------
Li(2)
Tonnes Li 0 Sn W
----------------------- ----------- ----- ------ ----- -----
Category (Millions) % % % %
----------------------- ----------- ----- ------ ----- -----
Proven Ore Reserves 0 0 0 0 0
----------------------- ----------- ----- ------ ----- -----
Probable Ore Reserves 34.5 0.30 0.65 0.09 0.03
----------------------- ----------- ----- ------ ----- -----
Total Ore Reserves 34.5 0.30 0.65 0.09 0.03
----------------------- ----------- ----- ------ ----- -----
Notes to Reserves Table.
1. Probable Ore Reserves have been prepared by Bara
International in accordance with the guidelines of the JORC Code
(2012).
2. The effective date of the Probable Ore Reserves is June
2017.
3. All figures are rounded to reflect the relative accuracy of
the estimate.
4. The operator of the project is Geomet S.R.O. a wholly-owned
subsidiary of EMH. Gross and Net Attributable Probable Ore Reserves
are the same.
5. Any apparent inconsistencies are due to rounding errors.
The Ore Reserve was based on the Mineral Resource for the
Cinovec deposit prepared by Widenbar and Associates and issued in
February 2017. The Mineral Resource is reported in the report
Cinovec Resource Estimation published by Widenbar and Associates
and is reported in accordance with the JORC 2012 guidelines. The
table below summarises the Mineral Resource declared:
CINOVEC 2017 RESOURCE
---------------------------------------------------------------
Li(2)
Cutoff Tonnes Li O Sn W
----------- ------- ----------- ----- ------ ----- ------
% (Millions) % % % %
----------- ------- ----------- ----- ------ ----- ------
INDICATED 0.1% 347.7 0.21 0.45 0.04 0.015
----------- ------- ----------- ----- ------ ----- ------
INFERRED 0.1% 308.8 0.18 0.39 0.04 0.014
----------- ------- ----------- ----- ------ ----- ------
TOTAL 0.1% 656.5 0.20 0.43 0.04 0.014
----------- ------- ----------- ----- ------ ----- ------
BOARD CHANGES
Mr Richard Pavlik was appointed to the Board to replace Mr Pavel
Reichl, who resigned on his request to pursue other interests. Mr
Pavlik is the General Manager of Geomet s.r.o., the Company's
wholly owned Czech subsidiary, and is a highly experienced Czech
mining executive. Mr Pavlik holds a Master's Degree in Mining
Engineer from the Technical University of Ostrava in Czech
Republic. He is the former Chief Project Manager and Advisor to the
Chief Executive Officer at OKD. OKD has been a major coal producer
in the Czech Republic. He has almost 30 years of relevant industry
experience in the Czech Republic.
INTERIM FUNDING
The Company is actively engaged in discussions with potential
European strategic partners with regards to the funding and
development of the Cinovec Project. Given the high level of
interest in Europe in the lithium market, the Company is confident
of a successful outcome in the near term in this regard. In order
to allow sufficient time to finalise discussions and properly
assess the various options open to the Company, the Company
arranged an interim funding facility to maintain momentum in
developing the project.
This facility has been provided by an Australian based
sophisticated investor, 6466 Investments Pty Ltd, and allows for
the draw-down of up to AUD 2 million in tranches as required over
12 months. Any funds drawn down will convert to CDI's in the
Company at a 10% discount to the 10 day vwap in the Company's
securities. The funds will be used in the preparation of the
Company's Definitive Feasibility Study, for further drilling and
general working capital. The issue of shares pursuant to draw-downs
does not require shareholder approval.
SUMMARY
European Metals has had another productive quarter with several
key developments which are all very positive. The Company is now
focused on accelerating the project towards development of the
largest lithium resource in Europe through completion of the
definitive feasibility study.
BACKGROUND INFORMATION ON CINOVEC
PROJECT OVERVIEW
Cinovec Lithium/Tin Project
European Metals owns 100% of the Cinovec lithium-tin deposit in
the Czech Republic. Cinovec hosts a globally significant hard rock
lithium deposit with a total Indicated Mineral Resource of 348Mt @
0.45% Li(2) O and 0.04% Sn and an Inferred Mineral Resource of
309Mt @ 0.39% Li(2) O and 0.04% Sn containing a combined 7.0
million tonnes Lithium Carbonate Equivalent and 263kt of tin. An
initial Probable Ore Reserve of 34.5Mt @ 0.65% Li2O and 0.09% Sn
has been declared to cover the first 20 years mining at an output
of 20,800tpa of lithium carbonate.
This makes Cinovec the largest lithium deposit in Europe, the
fourth largest non-brine deposit in the world and a globally
significant tin resource.
The deposit has previously had over 400,000 tonnes of ore mined
as a trial sub-level open stope underground mining operation.
EMH has completed a Preliminary Feasibility Study, conducted by
specialist independent consultants, which indicated a return post
tax NPV of USD540m and an IRR of 21%. It confirmed the deposit is
be amenable to bulk underground mining. Metallurgical test work has
produced both battery grade lithium carbonate and high-grade tin
concentrate at excellent recoveries. Cinovec is centrally located
for European end-users and is well serviced by infrastructure, with
a sealed road adjacent to the deposit, rail lines located 5 km
north and 8 km south of the deposit and an active 22 kV
transmission line running to the historic mine. As the deposit lies
in an active mining region, it has strong community support.
The economic viability of Cinovec has been enhanced by the
recent strong increase in demand for lithium globally, and within
Europe specifically.
CONTACT
For further information on this update or the Company generally,
please visit our website at www. http://europeanmet.com or
contact:
Mr. Keith Coughlan
Managing Director
COMPETENT PERSON
Information in this release that relates to exploration results
is based on information compiled by Dr Pavel Reichl. Dr Reichl is a
Certified Professional Geologist (certified by the American
Institute of Professional Geologists), a member of the American
Institute of Professional Geologists, a Fellow of the Society of
Economic Geologists and is a Competent Person as defined in the
2012 edition of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves and a Qualified Person
for the purposes of the AIM Guidance Note on Mining and Oil &
Gas Companies dated June 2009. Dr Reichl consents to the inclusion
in the release of the matters based on his information in the form
and context in which it appears. Dr Reichl holds CDIs in European
Metals.
The information in this release that relates to Mineral
Resources and Exploration Targets has been compiled by Mr Lynn
Widenbar. Mr Widenbar, who is a Member of the Australasian
Institute of Mining and Metallurgy, is a full time employee of
Widenbar and Associates and produced the estimate based on data and
geological information supplied by European Metals. Mr Widenbar has
sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity that he is undertaking to qualify as a Competent Person as
defined in the JORC Code 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Minerals Resources and Ore
Reserves. Mr Widenbar consents to the inclusion in this report of
the matters based on his information in the form and context that
the information appears.
CAUTION REGARDING FORWARD LOOKING STATEMENTS
Information included in this release constitutes forward-looking
statements. Often, but not always, forward looking statements can
generally be identified by the use of forward looking words such as
"may", "will", "expect", "intend", "plan", "estimate",
"anticipate", "continue", and "guidance", or other similar words
and may include, without limitation, statements regarding plans,
strategies and objectives of management, anticipated production or
construction commencement dates and expected costs or production
outputs.
Forward looking statements inherently involve known and unknown
risks, uncertainties and other factors that may cause the company's
actual results, performance and achievements to differ materially
from any future results, performance or achievements. Relevant
factors may include, but are not limited to, changes in commodity
prices, foreign exchange fluctuations and general economic
conditions, increased costs and demand for production inputs, the
speculative nature of exploration and project development,
including the risks of obtaining necessary licences and permits and
diminishing quantities or grades of reserves, political and social
risks, changes to the regulatory framework within which the company
operates or may in the future operate, environmental conditions
including extreme weather conditions, recruitment and retention of
personnel, industrial relations issues and litigation.
Forward looking statements are based on the company and its
management's good faith assumptions relating to the financial,
market, regulatory and other relevant environments that will exist
and affect the company's business and operations in the future. The
company does not give any assurance that the assumptions on which
forward looking statements are based will prove to be correct, or
that the company's business or operations will not be affected in
any material manner by these or other factors not foreseen or
foreseeable by the company or management or beyond the company's
control.
Although the company attempts and has attempted to identify
factors that would cause actual actions, events or results to
differ materially from those disclosed in forward looking
statements, there may be other factors that could cause actual
results, performance, achievements or events not to be as
anticipated, estimated or intended, and many events are beyond the
reasonable control of the company. Accordingly, readers are
cautioned not to place undue reliance on forward looking
statements. Forward looking statements in these materials speak
only at the date of issue. Subject to any continuing obligations
under applicable law or any relevant stock exchange listing rules,
in providing this information the company does not undertake any
obligation to publicly update or revise any of the forward looking
statements or to advise of any change in events, conditions or
circumstances on which any such statement is based.
LITHIUM CLASSIFICATION AND CONVERSION FACTORS
Lithium grades are normally presented in percentages or parts
per million (ppm). Grades of deposits are also expressed as lithium
compounds in percentages, for example as a percent lithium oxide
(Li(2) O) content or percent lithium carbonate (Li(2) CO(3) )
content.
Lithium carbonate equivalent ("LCE") is the industry standard
terminology for, and is equivalent to, Li(2) CO(3) . Use of LCE is
to provide data comparable with industry reports and is the total
equivalent amount of lithium carbonate, assuming the lithium
content in the deposit is converted to lithium carbonate, using the
conversion rates in the table included below to get an equivalent
Li(2) CO(3) value in percent. Use of LCE assumes 100% recovery and
no process losses in the extraction of Li(2) CO(3) from the
deposit.
Lithium resources and reserves are usually presented in tonnes
of LCE or Li.
The standard conversion factors are set out in the table
below:
Table: Conversion Factors for Lithium Compounds and Minerals
Convert from Convert Convert Convert to
to Li to Li(2) Li(2) CO(3)
O
------------------- ------- -------- ---------- -------------
Lithium Li 1.000 2.153 5.324
Li(2)
Lithium Oxide O 0.464 1.000 2.473
Li(2)
Lithium Carbonate CO3 0.188 0.404 1.000
------------------- ------- -------- ---------- -------------
WEBSITE
A copy of this announcement is available from the Company's
website at www.europeanmet.com.
TECHNICAL GLOSSARY
The following is a summary of technical terms:
"ball and rod Indicies that provide an assessment
indices" of the energy required to grind
one tonne of material in a ball
or rod mill
"carbonate" refers to a carbonate mineral such
as calcite, CaCO(3)
"comminution" The crushing and/or grinding of
material to a smaller scale
"cut-off grade" lowest grade of mineralised material
considered economic, used in the
calculation of Mineral Resources
"deposit" coherent geological body such as
a mineralised body
"exploration" method by which ore deposits are
evaluated
"flotation" selectively separating hydrophobic
materials from hydrophilic materials
to upgrade the concentration of
valuable minerals
"g/t" gram per metric tonne
"grade" relative quantity or the percentage
of ore mineral or metal content
in an ore body
"heavy liquid is based on the fact that different
separation" minerals have different densities.
Thus, if a mixture of minerals
with different densities can be
placed in a liquid with an intermediate
density, the grains with densities
less than that of the liquid will
float and grains with densities
greater than the liquid will sink
"Indicated" as defined in the JORC and SAMREC
or "Indicated Codes, is that part of a Mineral
Mineral Resource" Resource which has been sampled
by drill holes, underground openings
or other sampling procedures at
locations that are too widely spaced
to ensure continuity but close
enough to give a reasonable indication
of continuity and where geoscientific
data are known with a reasonable
degree of reliability. An Indicated
Mineral Resource will be based
on more data and therefore will
be more reliable than an Inferred
Mineral Resource estimate
"Inferred" or as defined in the JORC and SAMREC
"Inferred Mineral Codes, is that part of a Mineral
Resource" Resource for which the tonnage
and grade and mineral content can
be estimated with a low level of
confidence. It is inferred from
the geological evidence and has
assumed but not verified geological
and/or grade continuity. It is
based on information gathered through
the appropriate techniques from
locations such as outcrops, trenches,
pits, working and drill holes which
may be limited or of uncertain
quality and reliability
"JORC Code" Joint Ore Reserve Committee Code;
the Committee is convened under
the auspices of the Australasian
Institute of Mining and Metallurgy
"kt" thousand tonnes
"LCE" the total equivalent amount of
lithium carbonate (see explanation
above entitled Explanation of Lithium
Classification and Conversion Factors)
"lithium" a soft, silvery-white metallic
element of the alkali group, the
lightest of all metals
"lithium carbonate" the lithium salt of carbonate with
the formula Li(2) CO(3)
"magnetic separation" is a process in which magnetically
susceptible material is extracted
from a mixture using a magnetic
force
"metallurgical" describing the science concerned
with the production, purification
and properties of metals and their
applications
"Mineral Resource" a concentration or occurrence of
material of intrinsic economic
interest in or on the Earth's crust
in such a form that there are reasonable
prospects for the eventual economic
extraction; the location, quantity,
grade geological characteristics
and continuity of a mineral resource
are known, estimated or interpreted
from specific geological evidence
and knowledge; mineral resources
are sub-divided into Inferred,
Indicated and Measured categories
"mineralisation" process of formation and concentration
of elements and their chemical
compounds within a mass or body
of rock
"Mt" million tonnes
"optical microscopy" the determination of minerals by
observation through an optical
microscope
"ppm" parts per million
"recovery" proportion of valuable material
obtained in the processing of an
ore, stated as a percentage of
the material recovered compared
with the total material present
"resources" Measured: a mineral resource intersected
and tested by drill holes, underground
openings or other sampling procedures
at locations which are spaced closely
enough to confirm continuity and
where geoscientific data are reliably
known; a measured mineral resource
estimate will be based on a substantial
amount of reliable data, interpretation
and evaluation which allows a clear
determination to be made of shapes,
sizes, densities and grades. Indicated:
a mineral resource sampled by drill
holes, underground openings or
other sampling procedures at locations
too widely spaced to ensure continuity
but close enough to give a reasonable
indication of continuity and where
geoscientific data are known with
a reasonable degree of reliability;
an indicated resource will be based
on more data, and therefore will
be more reliable than an inferred
resource estimate. Inferred: a
mineral resource inferred from
geoscientific evidence, underground
openings or other sampling procedures
where the lack of data is such
that continuity cannot be predicted
with confidence and where geoscientific
data may not be known with a reasonable
level of reliability
"SAGability" testing material to investigate
its performance in a semi-autonomous
grinding mill
"spiral concentration" a process that utilises the differential
density of materials to concentrate
valuable minerals
"stope" underground excavation within the
orebody where the main production
takes place
"t" a metric tonne
"tin" A tetragonal mineral, rare; soft;
malleable: bluish white, found
chiefly in cassiterite, SnO(2)
"treatment" Physical or chemical treatment
to extract the valuable metals/minerals
"tungsten" hard, brittle, white or grey metallic
element. Chemical symbol, W; also
known as wolfram
"W" chemical symbol for tungsten
ADDITIONAL GEOLOGICAL TERMS
"apical" relating to, or denoting an apex
"cassiterite" A mineral, tin dioxide, SnO2. Ore
of tin with specific gravity 7
"cupola" A dome-shaped projection at the
top of an igneous intrusion
"dip" the true dip of a plane is the angle
it makes with the horizontal plane
"granite" coarse-grained intrusive igneous
rock dominated by light-coloured
minerals, consisting of about 50%
orthoclase, 25% quartz and balance
of plagioclase feldspars and ferromagnesian
silicates
"greisen" A pneumatolitically altered granitic
rock composed largely of quartz,
mica, and topaz. The mica is usually
muscovite or lepidolite. Tourmaline,
fluorite, rutile, cassiterite, and
wolframite are common accessory
minerals
"igneous" said of a rock or mineral that solidified
from molten or partly molten material,
i.e., from a magma
"muscovite" also known as potash mica; formula:
KAl(2) (AlSi(3) O(10) )(F,OH)(2)
.
"quartz" a mineral composed of silicon dioxide,
SiO2
"rhyolite" An igneous, volcanic rock of felsic
(silica rich) composition. Typically
>69% SiO(2)
"vein" a tabular deposit of minerals occupying
a fracture, in which particles may
grow away from the walls towards
the middle
"wolframite" A mineral, (Fe,Mn)WO(4) ; within
the huebnerite-ferberite series
"zinnwaldite" A mineral, KLiFeAl(AlSi(3) )O(10)
(F,OH)(2) ; mica group; basal cleavage;
pale violet, yellowish or greyish
brown; in granites, pegmatites,
and greisens
ENQUIRIES:
European Metals Holdings Tel: +61 (0) 419 996
Limited 333
Keith Coughlan, Chief Email: keith@europeanmet.com
Executive Officer Tel: +44 (0) 20 7440
Kiran Morzaria, Non-Executive 0647
Director Tel: +61 (0) 6141 3504
Julia Beckett, Company Email: julia@europeanmet.com
Secretary
Beaumont Cornish (Nomad Tel: +44 (0) 20 7628
& Broker) 3396
Michael Cornish Email: corpfin@b-cornish.co.uk
Roland Cornish
The information contained within this announcement is considered
to be inside information, for the purposes of Article 7 of EU
Regulation 596/2014, prior to its release.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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