TIDMEUZ
RNS Number : 3029B
Europa Metals Ltd
07 October 2020
7 October 2020
Europa Metals Ltd
("Europa Metals", the "Company" or the "Group") (AIM, AltX:
EUZ)
Final Results for the Year Ended 30 June 2020
Europa Metals, the European focused lead-zinc and silver
developer, is pleased to announce its final results for the year
ended 30 June 2020.
A pdf copy of the full Annual Report and Accounts is available
at the following link:
http://www.europametals.com/site/news-announcements/annual-reports-archive
and will be posted to shareholders in due course.
For further information on the Company, 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, Chief Executive Officer (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
T: +44 (0) 203 657 0050
Sasfin Capital Proprietary Limited (a member of the Sasfin
group)
Sharon Owens
T (direct): +27 11 809 7762
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014.
Key Extracts from the Company's audited Report and Accounts are
set out below:
Chairman's Statement
Throughout the last financial year, we have continued to advance
Europa Metals Ltd's ("Europa", "Europa Metals" or the "Company")
wholly owned Toral lead, zinc and silver project located in the
province of Castilla y León, north west Spain (the "Toral Project"
or "Toral").
Our efficient and cost effective approach to exploration and
development has included the successful prosecution of several
drilling campaigns designed to extract maximum value and
information from each drill hole. This approach has also seen
Europa Metals successfully complete several phases of exciting
metallurgical test work and oversee an increasing level of
confidence in the pre-existing mineral resource estimate via the
commissioning of regular independent updates.
In the first half of the financial year, the Company completed
an oversubscribed fundraising of GBP1 million (gross), thereby
enabling us to fund further development work which was efficiently
targeted towards both increasing our levels of confidence in the
resource from the inferred to indicated category and to securing a
further metallurgical sample to facilitate ongoing work to better
define potential future processing routes.
During the financial year, we announced our first indicated
resource at Toral, which we achieved with the first drilling
campaign of 2019. This area of higher tenor mineralisation on the
deposit was further substantiated later in 2019 with the successful
drilling of hole TOD-025, intersecting 7.70m @ 17.3% ZnEq(PbAg)
from 483.6m to 491.3m, including 4 .3m @ 25.6% ZnEq(PbAg) from
486.3m to 490.6m. This also delivered a 40% increase in the
indicated inventory defining 3.8Mt @ 8.3% ZnEq (including Pb
credits), which is a very good result serving to demonstrate the
efficiency of Europa's project team's drill targeting.
The metallurgical test work commissioned and conducted on
material from Toral during and subsequent to the reporting period
involved two key objectives, firstly the accumulation of further
mineralisation representivity across the deposit and, secondly, the
initiation of X-ray transmission ("XRT") ore sorting test work. The
results obtained proved to be excellent on both fronts, with the
high grade intersection from hole TOD-025 performing very well
through flotation to prove up a globally significant lead
concentrate of 79.2%. The XRT programme delivered very exciting
results illustrating the capacity to upgrade low grade ore by a
factor of 2 - 4x, which could prove transformational in how we
approach potential future mining operations at Toral.
The achievement of such milestones is important to the future
development of the Company as more financing options become
available to us on the back of increasing confidence levels in the
deposit. Further drilling should enable Europa to grow the size of
the current indicated resource estimate which will feed into
updated economic parameters for the Toral Project. In addition, the
successful metallurgical test work has provided an understanding of
potential future concentrate products and, with the retention of
third-party marketers, such as Conrad Partners from Hong Kong, we
will be able to engage in preliminary marketing discussions with
potential third party concentrate buyers.
As Europa progresses through the next 12 month period, with its
planned activities having been financed by the recent post year end
fundraising of GBP2 million (gross), further drilling and
metallurgical work will feed into an updated production flow sheet,
and assist the project team in identifying efficiencies versus the
initial 2018 Scoping Study's findings. We are also advancing the
key components of a pre-feasibility study ("PFS") with work
commencing on hydrogeology, waste management and geotechnical
analysis, while continuing with environmental baseline studies and
community engagement. The first half of 2020 saw Europa acclimatise
to the new and challenging global environment stemming from the
COVID-19 pandemic. We implemented appropriate procedures at an
early stage in the onset of the pandemic in order to mitigate its
effects on the group's workplaces and activities and will continue
to monitor events as they unfold.
I would like to take this opportunity to thank all of our
shareholders, advisers and other stakeholders for their continued
support and interest in our activities and look to reporting
further progress in due course.
Myles Campion
Executive Chairman
6 October 2020
Chief Executive Officer's Operational and Financial Review
I would firstly like to express our appreciation for the entire
Europa team's hard work and dedication during and post the
reporting period in what has been a highly challenging environment
due to the Coronavirus global health emergency. The safety of our
workforce is at the forefront of everything we do and the
operational team's response to ensure that all best practice
instructions and guidance has been fully adopted and adhered to,
with respect to COVID-19, is a testament to their
professionalism.
Notwithstanding the significant challenges posed by, and the
Board's actions to mitigate the impact of, COVID-19, the financial
year to 30 June 2020 and subsequent period has seen significant
progress for Europa Metals at all levels. Going into the financial
year, Europa Metal's core strategy was to develop the surety of an
economically robust mining model, for a flagship project situated
in the EU, that can be developed within the boundaries of the
defined JORC 2012 resource. Potential expansion of the existing
resource to extend the planned future mine life is a clear option
that can be pursued at a future date, subject to the relevant
permissions, on the basis of high levels of certainty around a mine
development plan or even during future production itself.
Whilst the Toral Project is open towards its eastern boundary
and at the approximate 1,000 metre depth mark, over the course of
the last fifteen months we have focused our resources on increasing
continuity and our understanding of the existing block model and in
recovering sufficient mineralised samples to conduct our first
programme of metallurgical testing, which was undertaken by Wardell
Armstrong International ("WAI").
As Europa Metal's team has pursued the group's stated strategy,
we have continuously reviewed each area of work following our own
analysis of the lead, zinc and silver marketplace and feedback from
third party groups. Europa regularly engages with a range of
industry groups within the metals sector and shares appropriate
project information on a number of levels ranging from publicly
available reported results to granting access to a comprehensive
data room following execution of a suitable non-disclosure
agreement. Such engagement is ongoing as we continue to update and
enhance our knowledge of Toral and de-risk additional elements of
the project with each new work programme.
In summary, as of September 2020, I am delighted to report that
we have experienced no Coronavirus cases amongst our personnel and
have implemented a full community relations programme including
submission of initial documentation in respect of the requisite
stakeholder consultation process that will eventually form part of
our mining licence application. Operationally, we have achieved a
significant amount in a very efficient manner, including; defining,
and then increasing, Toral's initial indicated resource, completion
of three distinct phases of metallurgical analysis (including the
implementation of an ore sorting process) which has seen excellent
grade and recovery results for all metals, reporting of the highest
grade lead, zinc and silver intersections obtained by Europa to
date and the signing of a concentrate marketing agreement with
Conrad Partners. The results from such activities will be utilised
in the completion of an economic update, currently underway, on the
project that will bring together all of the findings from the key
workflows completed since the 2018 Scoping Study. We have also
recently secured further funds to progress the key components of a
PFS, with work already underway on the ground ahead of the
anticipated grant of a new, three year, investigation permit for
Toral by the Junta of Castillia y León. The application for such
permit was compiled and submitted in close consultation with the
Junta itself and, over the last three years, Europa has fully
complied with its statutory obligations and commitments with
respect to all work conducted on the project. The application was
made for a new investigation permit as Europa's team believes that
significant enhancements can still be made to a prospective
mining application to the same authorities, to demonstrate and
support the long-term economic potential of a future mining
operation at the Toral Project.
Corporately, in mid July 2020, Europa's shareholders passed the
requisite resolutions to enable the Company to, inter alia, make
certain amendment's to it's Constitution to bring the Company into
greater alignment with more UK market standard corporate governance
practices, recognising that AIM is now the primary exchange for the
Company's shares following its delisting from the ASX in March
2019. The Company also implemented a share consolidation as part of
the proposals at the meeting on the basis of a 500:1 ratio in order
to reduce the number of shares in issue to a more appropriate level
versus the Company's peer group and thereby improve investor
perception and volatility in the Company's share price. As a matter
of course, the Company continues to regularly identify, review and
evaluate other projects and opportunities that could potentially
add value to the group, but no such opportunities are currently
being actioned/pursued.
Group Highlights
Coronavirus
- During March 2020, the Company responded to all instructions
and best practice guidance from the relevant authorities with
regards to ensuring the safety of its work force in Spain, the UK
and Australia by implementing a series of operational procedures
and monitoring initiatives. Europa Metals puts the safety of its
workforce ahead of all other considerations and continues to
operate strictly within the parameters of social distancing.
Operational - Toral Pb, Zn & Ag Project, Spain
- Diamond drilling campaign completed in September 2019
targeting approximately 750 metres of previously unassayed areas of
the deposit. Key results were:
o Structural demonstration that the lead, zinc and silver
mineralisation currently comprises at least two, and possibly
three, plunging high-grade shoots with higher grade mineralisation
usually identified at 400 metres from surface with the majority of
the currently defined resource estimate present in distinct areas
down to 1,000 metres from surface (where the deposit remains open
at depth).
o Mineralised samples from both the parent and the daughter
holes were collated and processed by WAI with the first series of
results, obtained in December 2019, analysing the metallurgical
characteristics of Toral and ascertaining potential concentrate
types for future production and sale.
- A formal stakeholder engagement process for the Toral Project
was initiated during August 2019 with an initial document being
submitted to all key administration stakeholders in connection with
the planned eventual securing of an exploitation licence for the
project following a development decision. Further to a series of
local consultation sessions, the Company responded to local
stakeholder feedback and, in November 2019, launched a dedicated
information sharing website for the Toral Project available at:
europametals.es and proyectotoral.com.
- An updated JORC (2012) compliant resource estimate was
completed in October 2019 which included the first indicated
category of resource for Toral.
- A further drilling campaign commenced in November 2019
resulting in the highest grade intersection recovered by the
Company to date: 7.70m @ 17.3% ZnEq (PbAg) from 483.6m to 491.3m,
including 4.3m @ 25.6% ZnEq (PbAg) from 486.3m to 490.6m from drill
hole TOD-025. Further samples were obtained for additional
metallurgical testwork by WAI.
- An initial hydrogeological study was concluded in February
2020 resulting in positive assessment of the sub-surface
hydrogeological conditions, namely:
o Toral Project hosted in limestones but does not have developed
levels of drainage created from the dissolution of sedimentary
material (likely seal against the surrounding water table).
o 245.55l/s flow across the proposed mineable project area falls
well within acceptable levels for economic mine development;
further work, including a borehole test, will need to be undertaken
to enable a PFS.
o The results of this desktop study are being tested with a
hydrogeological progamme at Toral.
- An application for a new, three-year, investigation permit in
respect of the Toral Project was submitted to the Junta of Castilla
y Leo n in June 2020. The Investigation Permit renewal application
was prepared in close consultation with the relevant bodies of the
Junta, whose involvement in the submission process served to
reinforce the Company's decision to apply. The Company currently
anticipates that a decision in respect of the grant of a new
Investigation Permit will occur prior to the scheduled expiry of
the existing permit (being November 2020).
Corporate
- A fundraising of GBP1,000,000 gross was completed, at an issue
price of 0.025 pence per share, on 30 September 2019. In addition,
one warrant exercisable for a period of 2 years at a subscription
price of 0.0375 pence per share was issued to all participants in
the fundraising for every two new ordinary shares subscribed. The
funds were deployed towards additional drilling of the Toral
Project, mining engineering and processing work and general working
capital purposes.
- A General Meeting was convened for mid July 2020 to seek and
obtain shareholder approval for a series of resolutions, including
the implementation of a share consolidation, in order to support
the Company's ongoing cost reduction strategy and more closely
align Europa Metals' corporate governance framework and
Constitution with those of other AIM quoted companies following due
consultation with certain shareholders and advisers.
Post Period (1 July 2020 - present)
- All resolutions successfully passed by shareholders at the
abovementioned General Meeting leading to the implementation of a
500:1 consolidation of the Company's ordinary shares, certain
amendments to the Company's Constitution to enhance shareholder
protections, and support for an incentive plan for directors and
employees further to ongoing cost reduction measures in light of
the Coronavirus health emergency.
- In early August 2020, Colin Bird stepped down from the Board
as Non-Executive Chairman, with Myles Campion assuming the role of
Executive Chairman and myself being confirmed as CEO.
- Following a period of assessment of the Toral Project, a
product marketing agreement was signed with Conrad Partners, Hong
Kong, for them to work with the Company to source commercial terms
for the potential future supply and sale of concentrate products
from Toral.
- Updated JORC (2012) mineral resource estimate including a 40%
increase in the Indicated Resource.
- In mid August 2020, post the share consolidation, successful
fundraising of GBP2,000,000 gross completed at an issue price of
12.75 pence per share to facilitate certain key PFS workstreams,
including:
-- Hydrogeological studies to further ascertain sub surface water conditions;
-- Additional drilling targeting further increases in the
confidence level of the overall mineable resource for Toral;
and
-- Further metallurgical, geotechnical, waste management and environmental work components.
- In late August 2020, third phase metallurgical testwork
completed by WAI incorporating an ore sorting analysis. The results
are now being utilised, along with all other key work completed
since the 2018 Scoping Study, as part of a comprehensive,
independent, economic update for the Toral Project to establish and
set updated economic parameters for the PFS.
- PFS work underway with further operational updates anticipated in Q4 2020.
Laurence Read
CEO
6 October 2020
Consolidated Statement of Profit and Loss and Other
Comprehensive Income
For the year ended 30 June 2020
2020 2019
Note $ $
---------------------------------------- ----- ------------ ------------
Revenue 3(a) 3 42
Other income 3(b) - 7,212
Administration expenses 3(c) (1,000,227) (974,577)
Occupancy expenses (2,824) (32,489)
Exploration expenditure (1,375,442) (1,390,379)
Foreign exchange gain/(loss) 15,830 (1,979)
Loss before taxation (2,362,660) (2,392,170)
Income tax benefit / (expense) 5 - -
Loss after income tax for the
year from continuing operations (2,362,660) (2,392,170)
------------ ------------
Net loss for the year (2,362,660) (2,392,170)
Other comprehensive income
Items that may be reclassified
subsequently to profit or loss
Net exchange gain on translation
of foreign operation 171,072 62,293
Other comprehensive income for
the year, net of tax 171,072 62,293
Total comprehensive loss for the
year (2,191,588) (2,329,877)
------------ ------------
Net loss for the year attributable
to:
Equity holders of the Parent (2,191,588) (2,329,877)
(2,191,588) (2,329,877)
------------ ------------
Total comprehensive loss for the
year attributable to:
============ ============
Equity holders of the Parent (2,191,588) (2,329,877)
(2,191,588) (2,329,877)
------------ ------------
Cents per Cents per
Loss per share share share
Basic loss for the year attributable
to ordinary equity holders of
the Parent 7 (0.02) (0.03)
Diluted loss for the year attributable
to ordinary equity holders of
the Parent 7 (0.02) (0.03)
The above Consolidated Statement of Profit or Loss and Other
Comprehensive Income should be read in conjunction with the
accompanying notes in the full Report and Accounts.
Consolidated Statement of Financial Position
As at 30 June 2020
2020 2019
Note $ $
------------- -------------
Assets
Current assets
Cash and short term deposits 8 700,642 1,052,411
Trade and other receivables 9 210,866 291,201
Total current assets 911,508 1,343,612
------------- -------------
Non-current assets
Plant and equipment 24,073 31,657
Other receivables 9 193,096 -
Right of use assets 39,035 -
Capitalised exploration expenditure 10 1,577,953 1,423,943
Total non-current assets 1,834,157 1,455,600
------------- -------------
Total assets 2,745,665 2,799,212
------------- -------------
Liabilities and equity
Current liabilities
Trade and other payables 11 207,462 91,709
Lease liability 22,328 -
Total current liabilities 229,790 91,709
------------- -------------
Non-current liabilities
Lease liability 16,505 -
------------- -------------
Total non-current liabilities 16,505 -
------------- -------------
Total liabilities 246,295 91,709
------------- -------------
Net assets 2,499,370 2,707,503
------------- -------------
Equity
Contributed equity 12 42,489,962 40,572,924
Accumulated losses 15 (43,121,940) (40,759,280)
Reserves 14 3,131,348 2,893,859
Total equity 2,499,370 2,707,503
------------- -------------
The above Consolidated Statement of Financial Position should be
read in conjunction with the accompanying notes in the full Report
and Accounts.
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
2020 2019
Note $ $
------------ ------------
Cash flows used in operating activities
Interest received 3 42
Exploration and evaluation expenditure (1,507,897) (1,387,317)
Payments to suppliers and employees (828,272) (1,337,373)
Net cash flows used in operating
activities 19 (2,336,166) (2,724,648)
------------ ------------
Cash flows used in investing activities
Payments for plant and equipment (5,953) -
Net cash flows used in investing
activities (5,953) -
------------ ------------
Cash flows from financing activities
Lease principal repayments (49,096) -
Proceeds from issue of shares 2,212,254 2,684,170
Transaction costs on issue of shares (183,506) (184,832)
Net cash flows from financing activities 1,979,652 2,499,338
------------ ------------
Net (decrease)/increase in cash
and cash equivalents held (362,468) (225,310)
Net foreign exchange difference 10,699 5,394
Cash and cash equivalents at 1 July 1,052,411 1,272,327
Cash and cash equivalents at 30
June 8 700,642 1,052,411
------------ ------------
The above Consolidated Statement of Cash Flows should be read in
conjunction with the accompanying notes in the full Report and
Accounts which can be accessed via the following link:
http://www.europametals.com/site/news-announcements/annual-reports-archive
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