TIDMEUZ
RNS Number : 5405U
Europa Metals Ltd
30 July 2020
30 July 2020
Europa Metals Ltd
("Europa Metals", the "Company" or the "Group") (AIM, AltX:
EUZ)
Statement re Share Price Increases Post GM
Toral Pb, Zn & Ag Project, Spain
Europa Metals, the European focused lead-zinc and silver
developer, notes the significant increases in the value of the
Company's stock since successful completion of the July General
Meeting ("GM"), the results of which were announced on 15 July
2020, and which concluded, inter alia, the current programme of
cost cutting (via the approval for a management incentive plan),
the amendment to the Company's capital structure resulting in the
share consolidation and amendments to the Company's constitution to
bring its Corporate Governance into line with standard UK
practice.
Since the GM and subsequent consolidation of Europa Metals
shares on AIM, Europa Metals has seen substantial buying activity
on both AIM and the Altx. The Company knows of no reason or
material event not yet disclosed to the market at this time to
explain the increase. However Europa Metals notes the points set
out below:
- Pre-consolidation the stock was highly volatile and pricing
today has returned to roughly that of 12 months ago;
- As a lead, zinc and silver project with high grades, current
and anticipated commodity pricing is favourable to the Toral
project;
- Further work on recoveries and grade is in progress, the
results of which will be announced in a timely manner;
- Europa Metals has recently concluded a series of cost cutting
measures combined with the approval of an incentive plan;
- The recent rise in share price is positive for the potential
exercise of outstanding warrants which would mean further funds for
the Company
- The trading disparity between Altx and AIM continues to be
monitored by the Company, its advisors and the JSE but represents a
comparatively small part of the shares in issue; and
- The new, post share consolidation, pricing normalises Europa
Metals next to the Company's peers and allows easier comparison of
the equity valuation in the context of the Company's core asset,
the Toral lead, zinc and silver project in Spain, which has been
significantly advanced by the Company (Full project details can be
found below in the Notes to Editors' Appendix).
Europa Metals intends to provide in the short term a new
strategic outlook on operational and group activity, once a series
of current workstreams have been completed. The Board of Directors
would like to thank shareholders for their continued support as the
Company progresses a new low capex, high grade lead zinc and silver
project towards development.
For further information on the Company and the Toral lead, zinc
and silver project, please visit www.europametals.com or
contact:
Europa Metals Ltd
Dan Smith, Non-Executive Director and Company Secretary
(Australia)
T: +61 417 978 955
Laurence Read, Executive Director (UK)
T: +44 (0)20 3289 9923
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 (0)20 7409 3494
Turner Pope Investments (TPI) Limited (Broker)
Andy Thacker/Zoe Alexander
T: +44 (0)20 3657 0050
Sasfin Capital Proprietary Limited (a member of the Sasfin
group)
Sharon Owens
T (direct): +27 11 809 7762
Notes to Editors
Appendix : Further information on the Toral Project
JORC (2012) Mineral Resource Estimate
The Toral Project is a traditional polymetallic
(lead-zinc-silver) deposit, which is hosted over 6km of strike
length of the prospective Lower Cambrian Vegadeo Limestone
formation, that is regionally mineralised along more than 40km of
its extent. The deposit represents a carbonate hosted, structurally
controlled deposit type, demonstrating fault-controlled contact,
vein, carbonate replacement and breccia styles of mineralisation
situated close to and along the boundary between footwall slates
and hanging wall limestones and dolomites. Sub-ordinate
lead-zinc-silver mineralisation also occurs wholly within the
hanging wall limestones and dolomites, approaching the contact with
the slates.
Historic drill hole re-logging undertaken by the Company in 2018
provided improved geological, structure, alteration and
weathering/oxidation information, which was incorporated into the
interpreted geological and mineralised models for the current JORC
(2012) mineral resource estimate. Surface mapping and remote data
interpretation by Europa Metals has enabled the development of an
interpreted fault model, also incorporated into the aforementioned
updated geological and mineralised models used in the mineral
resource estimate.
The latest mineral resource estimate (as of 25 October 2019) for
the Toral deposit comprised, at a 4% cut-off :
-- An Indicated resource of approximately 2.7Mt @ 8.9% Zn
Equivalent (including Pb credits), 5% Zn, 4.2% Pb and 32g/t Ag
o Including 130,000 tonnes of zinc, 110,000 tonnes of lead and
2.8 million ounces of silver
-- An Inferred resource of approximately 16Mt @ 7.2% Zn
Equivalent (including Pb credits), 4.5% Zn, 2.9% Pb and 22g/t
Ag
o Including 690,000 tonnes of zinc, 450,000 tonnes of lead and
11 million ounces of silver
-- Total Resources of approximately 18Mt @ 7.4% Zn Equivalent
(including Pb credits), 4.5% Zn, 3.1% Pb and 24g/t Ag
o Including 830,000 tonnes of zinc, 570,000 tonnes of lead and
14 million ounces of silver
--The latest resource update identified potentially economic
mineralisation ranging from surface to approximately 1,100m below
surface. The block model currently extends for a strike length of
3,600m and is still open to the east and west along strike and also
at depth where it has not yet been closed off.
Cut-Off Tonnes Density Zn Zn Eq Zn Pb Ag Contained Contained Ag Troy
Zn Eq (Millions) Eq (PbAg)% % % g/t Zn Tonnes Pb Tonnes Oz (Millions)
(PbAg)% (Pb)% (000s) (000s)
Indicated
6 2.1 3 10 11 6 4.7 35 120 100 2.4
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
5 2.3 2.9 9.6 10 5 4.5 34 130 100 2.6
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
4 2.7 2.9 8.9 9.5 5 4.2 32 130 110 2.8
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
3 3.0 2.9 8.3 8.9 5 3.9 31 140 120 2.9
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
Inferred
6 11 2.9 8.4 8.9 5 3.5 26 550 360 8.8
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
5 12 2.9 7.9 8.4 5 3.2 24 610 400 9.7
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
4 16 2.9 7.2 7.6 5 2.9 22 690 450 11
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
3 18 2.9 6.7 7.1 4 2.7 21 740 480 12
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
Total
6 13 2.9 8.7 9.2 5 3.7 28 670 460 11
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
5 15 2.9 8.2 8.6 5 3.4 26 740 510 12
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
4 18 2.9 7.4 7.9 5 3.1 24 830 570 14
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
3 21 2.9 6.9 7.3 4 2.9 22 880 600 15
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
Transitional Oxide Material Total
4 3 2.9 5.8 6.3 3 3.2 27 87 97 2.6
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
Unweathered Fresh Rock Total
4 15 2.9 7.8 8.2 5 3.1 23 740 470 11
------------ -------- ------- --------- --- ---- ----- ----------- ----------- ---------------
Table 4 : Summary of mineral resources for the Toral property
reported at a 4.0% Zn equivalent cut-off grade (including Pb and Ag
credits) and estimated grade and tonnages at the various cut-off
grades. Figures are rounded to reflect the accuracy of the estimate
and as such totals may not cast.
Notes for table 4:
1. No mineral reserve calculations have been undertaken. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.
2. Numbers are rounded to reflect the fact that an Estimate of
Resources was reported as stipulated by JORC 2012. Rounding of
numbers may result in differences in calculated totals and
averages. All tonnes are metric tonnes.
3. Zn equivalent calculations were based on 3 year trailing
average price statistics obtained from the London Metal Exchange
and London Bullion Market Association giving an average Zn price of
US$2,780/t, Pb price of US$2,200/t and Ag price of US$16.4/oz.
Recovery and selling factors were incorporated into the calculation
of Zn Eq values. It is the Company's opinion that all the elements
included in the metal equivalents calculation (Zinc, Lead and
Silver) have a reasonable potential to be recovered and sold.
4. Zn Eq (PbAg)% is the calculated Zn equivalent incorporating
silver credits as well as lead and is the parameter used to define
the cut-off grade used for reporting resources (Zn Eq (PbAg)% = Zn
+ Pb*0.935 + Ag*0.018).
5. Zn Eq is the calculated Zn equivalent using lead credits and
does not include silver credits (Zn Eq = Zn + Pb*0.935).
6. The mineral resource estimate set out above for the zinc,
lead and silver mineralisation in the Toral Project area is based
on a 3D geologic model and wireframe restricted block model that
integrated the exploration work on the Toral Project up to 30
September 2019. The block model used uniform cell size of 50x4x50m
to best suit the orientation of the mineralisation and sample
spacing. The block model was rotated by 20deg in plan view to best
match the trend of mineralisation. Sub cells were applied to better
fit the wireframe solid models and preserve accurate volume as much
as possible. Cells were interpolated at the parent block scale
using an ordinary kriging.
7. Top cuts were applied to the composite assay grades for 20%
Zn, 17% Pb and 125 g/t Ag, any value above the top cut value was
reduced to that grade.
8. The Indicated and Inferred mineral resource category for the
Toral lead-zinc-silver project set out in Table 2 (at cut-off
grades >=4% Zn Equivalent) comply with the resource definitions
as described in the Australasian Code for the Reporting of
Exploration Results, Mineral Resources and Ore Reserves. The JORC
Code, 2012 Edition. Prepared by: The Joint Ore Reserves Committee
of The Australasian Institute of Mining and Metallurgy, Australian
Institute of Geoscientists and Minerals Council of Australia
(JORC).
9. The tonnes and grades reported at a cut-off grade of 3% Zn
equivalent are below the economic cut-off grade of 4% and as such
should not be considered mineral resources, they are shown here for
comparison purposes only.
Bulk density
The resource database contains 2,373 bulk density measurements,
with a total of 177 within the mineralised wireframe.
The mean for the mineralised domain transitional zone is 2.75
g/cm(3) and the mean for the mineralised domain fresh material is
2.85 g/cm(3) . A broad linear relationship between Pb+Zn grade and
bulk density was identified from scattergrams and the formula 2.75
+ 0.02(Pb+Zn%) used to estimate block density within the block
model.
Second Phase metallurgical test results from Wardell Armstrong
International ("WAI") (April 2020).
The metallurgical results contained arise from a testing
programme that culminated in a second locked cycle test. Such
testwork achieved the following recoveries:
o 83.7% Pb recovery to a 60.0% Pb concentrate;
o 87.1% Ag recovery to 1,350ppm Ag within Pb concentrate;
and
o 77.0% Zn recovery to a 59.1% Zn concentrate.
These results show that the amount of lead recovered has
remained broadly unchanged versus the lead recoveries obtained from
the first locked cycle test. However, there has been a 2.5%
increase in the Pb concentrate grade and zinc recovery has
increased by 6.3% with a 3.3% increase in Zn concentrate grade.
Economic highlights from the Company's selected development
scenario
Estimated economic forecasts for the Toral Project based on the
current level of work (+/-30%) from the Scoping Study (December
2018- excludes subsequent work including resource upgrades,
metallurgical analysis, geotechnical studiees) comprise:
-- US$110 million net present value (NPV) using a discount rate of 8%;
-- 24.4% internal rate of return (IRR);
-- Estimated US$33 million CAPEX for a proposed 450ktpa design
capacity plant, including associated auxiliary costs, with
infrastructure being situated near portal entrance on the north
side of the deposit;
-- Estimated total CAPEX of US$110 million;
-- US$25 per tonne indicative OPEX processing cost at steady state conditions;
-- US$36 per tonne indicative OPEX mining cost utilising mechanised cut and fill; and
-- 15-year production plan, with significant potential for extension.
Basis for announcing economics
The factors that lead the Company to believe that it has a
reasonable basis for announcing a production target and forecast
financial information are detailed in the Scoping Study and can be
summarised as follows:
Three conceptual underground mining development and production
scenarios were considered and developed throughout the Scoping
Study, resulting in the identification of a preferred scenario,
highlights from which are set out below:
-- decline ramp access to the north of the deposit, targeting
mine production within the higher-grade core towards the centre of
the planned mining blocks;
-- entry to mine via a principal decline reaching various levels;
-- series of internal mining inclined ramps constructed to access levels;
-- mechanised cut and fill (MCAF) mining method proposed;
-- 4x4 metre mine standard development size;
-- a ventilation raise would be drilled (raise-bored) to provide
both adequate ambient conditions underground and a second,
emergency means of access/egress into the mine;
-- ore transported to a flotation process plant by conveyor or
haul truck from the mine and crushed to a suitable product for
milling;
-- milled ore floated by standard flotation technology to
provide lead and zinc concentrate, with silver probably reporting
to the lead concentrate for sale as a combined product; and
-- 4% Zn Eq cut-off used with potential for mine life extension.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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