TIDMZNWD
RNS Number : 0627O
Zinnwald Lithium PLC
08 June 2022
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector:
Mining
8 June 2022
Zinnwald Lithium plc
("Zinnwald Lithium" or the "Company")
Operational update
Zinnwald Lithium plc, the German focused lithium development
company, is pleased to provide an operational update as it advances
its 100% owned Zinnwald Lithium Project ('the Project') in
Germany.
HIGHLIGHTS
-- Improved the Project's economics via process testwork
conducted in conjunction with third party engineering groups
-- In-fill drilling programme at the Zinnwald Lithium Deposit to
study the mining scale variability of the ore ready to commence
subject to receipt of final permits
-- Exploration drill campaign planned to test the historic drill
data to determine the resource potential of the Falkenhain
exploration licence as potential feed into the Zinnwald plant
-- Engaged SRK Consulting (UK) Ltd to provide competent person
support for the drill campaign and geometallurgy work
-- Joined the European Union funded Horizon Europe "Exploration
Information Systems" project, focused on developing new exploration
techniques
-- Strengthened the team in Germany, adding skills in several
key disciplines including geology, mining and logistics
-- Advanced plans to deliver a bankable feasibility study based
on the new project parameters within 18 months subject to financing
and continued favourable progress on all major fronts
-- Anticipate providing greater clarity on revised project
parameters in the form of a Preliminary Economic Assessment as soon
as the Company can
-- As at the date of this announcement, the Company has funds on hand of EUR6.1 million
Zinnwald Lithium CEO, Anton du Plessis, said:
"Our objective is to deliver a bankable feasibility study, which
in turn will take us closer to delivering a much-needed supply of
lithium hydroxide to the European market. The secular demand growth
picture underpinned by ambitious, government mandated climate
change goals together with limited supply response continues to
underpin the robust fundamentals for the sector despite broader
economic headwinds.
"To this end, we are very pleased with the continued results
from the Project; not only have we undertaken extensive testwork
focused on producing battery grade lithium hydroxide but also on
optimising all steps of the production process. We are also
optimising the plant layout, mine plan and infrastructure all
driving improved Project Economics.
"I look forward to providing further updates on our progress as
we focus on ensuring the underlying value of our compelling asset
is more fully reflected in our share price."
DETAILS
Zinnwald Lithium has made good progress advancing its 100% owned
Zinnwald Lithium Project in Germany as it looks to become an
important supplier of lithium hydroxide to Europe's fast-growing
battery sector.
1. Testwork related to Production Processes
In March 2022, the Company announced the successful completion
of testwork that demonstrated the technical and economic viability
of producing lithium hydroxide. Over the subsequent period, with
the objective of strengthening the Project's economics, the Company
has successfully carried out a number of additional areas of
testwork on all stages of the production process, further details
of which are set out below.
Mining and Geometallurgy
TheiaX GmbH, a local German company, has completed initial
hyperspectral core scanning tests on both existing drill core from
previous drilling campaigns, and crushed ore samples from the
previous pilot tests. The hyperspectral scanning produced clear
quantitative information on Zinnwaldite (Li-mineral), Muscovite,
Clay minerals and Topaz from both the drill core and the crushed
product. In comparison to standard one metre assay intervals, the
hyperspectral imaging produced information on five cm intervals and
detected lower grade inclusions from the core giving a very clear
indication that online hyperspectral imaging could be used for
value-based bulk or particle sorting of crushed ore.
In a separate campaign, Metso:Outotec / Tomra tested the
amenability of Zinnwaldite ore for particle sorting. All
Zinnwaldite lithologies, ore and waste, were tested. Different
lithologies could easily be distinguished and hence particle
sorting was found to be suitable for Zinnwald ore. Further testwork
will be carried out with a larger representative bulk sample during
Q3 2022.
The objective of these testwork campaigns is to reduce ore
processing costs by removing waste and low-grade material from the
Mineral Processing circuit before the expensive grinding, drying
and magnetic separation stages, as well as minimising the quantity
of fine material produced as by-product.
If successful, this could also lead to an increase in total
Mineral Resources. The current Mineral Resource excludes Ore Type 1
lenses thinner than two meters due to processing cost per tonne
waste rock mined. With better understanding of the small-scale
grade variation and application of sorting process, it may be
possible to lower the Li cut-off grade of Ore Type 1. In addition,
a considerable amount of lithium at the Project is contained in the
"Greisenised Granite" rock, which could potentially be included in
Mineral Resources. This material can be understood as an alteration
halo surrounding the Ore Type 1 and is estimated at 214 Mt at a Li
grade of 1700 ppm. It is currently not included in the Project's
Mineral Resources of 40.4 million tonnes (35.5 million tonnes
measured and indicated plus 4.9 million tonnes inferred), as set
out in the relevant Competent Person's Report in the Company's
admission document published in October 2020.
Pyrometallurgy
Calcination (roasting of pre-treated Zinnwaldite concentrate)
testwork was carried out by IBU-tec Advanced Materials AG. The
calcination testwork focused on pre-treatment of the concentrate
with different additives, agglomeration and roasting of the
agglomerate. The test targeted the possibility of utilising cheaper
additives and a higher leach rate of lithium and potassium from
calcine. The tests for calcine leaching of the calcined material
were carried out by K-UTEC AG Salt Technologies AG ('K-UTEC').
The tests indicated that Flue Gas Desulfurization ('FGD') Gypsum
is suitable for the purpose. FGD Gypsum is readily available and
inexpensive and would represent a cost saving versus using primary
gypsum. The tests also showed an increased lithium recovery rate of
90% (previously 87%) and an increased potassium recovery rate of
70% (previously 50%) from Zinnwaldite ore compared with what was
demonstrated in the previous NI 43-101 Feasibility Study.
Hydrometallurgy
The Company has commissioned K-UTEC to conduct an initial,
scoping level study on upgrading the potassium sulphate ('SOP') and
precipitated calcium carbonate ('PCC') by-products of the
process.
As part of the LiOH test work completed in Q1 2022, the
potential to produce high purity SOP (>99.5%) and industrial
grade (>98.5%) PCC has already been demonstrated. This new study
will evaluate the commercial feasibility of the production of these
high purity by-products. These by-product credits already have a
meaningful impact on the operational cost economics of the Project,
but could be even further improved as, for instance, the price of
high purity SOP has historically been up to double that of
fertilizer grade product.
2. Drill Programmes
Zinnwald Lithium Deposit
The Company is ready to start an in-fill drilling programme at
the Zinnwald Lithium Deposit subject to receipt of final permits.
The purpose of the in-fill drilling programme is to study the
mining scale variability of the ore with the view of applying
larger scale mining methods. The ultimate aim is to accommodate
greater mining capacity for expanded Li-product output.
Zinnwald Lithium has engaged SRK Consulting (UK) Ltd to provide
competent person support for the drill campaign and
geometallurgy.
Permitting of the drilling campaign is at an advanced stage with
the relevant authorities and favourable permissions have already
been received from several landowners.
The Company has signed a contract with GEOPS Bolkan Drilling
Services Ltd, which has committed to have drill rigs available when
drilling is permitted to begin. The Company has also leased and
taken occupancy of new warehouse space in Freiberg that will be
used for core storage and core logging and processing of new drill
core when the drill programme commences. The facility is being
outfitted with the latest safe and environmentally friendly
equipment.
Falkenhain Exploration Licence Area
The Company's Falkenhain exploration licence is located 7km
north from the core Zinnwald Licence. The licence area was
historically extensively explored for occurrences of tin and
tungsten with drilling undertaken most recently from 1963 to 1990.
The Company has performed a detailed review of the historic data
including assaying samples of the surviving core from these
campaigns. The outcome from this work has identified the potential
for a lithium resource. The Company has therefore designed an
exploration drill campaign of ten diamond drill holes to test the
historic drill data and better determine the resource potential of
the licence.
3. Access to Legacy Mining Infrastructure
In March 2022, the Company was granted access to portions of the
existing mining infrastructure in the vicinity of the Project for
inspection purposes. This infrastructure includes a 4km drainage
tunnel, and disused ventilation and access shafts, which
potentially could be used as part of its operations. The
infrastructure was found to be in excellent condition and easily
accessible. The Company continues to develop its plans for the
possible utilisation of this infrastructure to beneficially impact
the Project and is also in discussion with the owners of the assets
for access and usage.
4. Other Operational Matters
ESG
In line with its progressive ESG policy, the Company is
committed to delivering benefits to the local community. The
Company has held several meetings with different stakeholders
regarding its plans for the future. Members of the management team
have met with local and provincial authorities to keep them updated
regarding progress and plans for the Project.
As part of the public engagement effort, an encouraging
consultation and information meeting was held in the village of
Zinnwald in March 2022 to explain the drill programme and plans to
develop the Project. In order to assist in keeping the public and
the authorities informed about the Project, a local project office
will be established for the duration of the drilling campaign.
Occupational Health and Safety ('OHS')
As the team expands and new physical work stages advance, the
OHS aspects have been reconsidered. The Company targets zero
incidents through training, selection of work methods and
continuous auditing.
Horizon Europe
In May 2022, the Company joined the "Exploration Information
Systems" project, part of the EU funded Horizon Europe Research and
Innovation scheme. The research project focuses on developing new
exploration techniques that are based on large datasets, artificial
intelligence and deep learning methods to identify new sources of
raw materials. Precise techniques that can take several factors
into consideration to determine prospectivity of deposits, aim to
lead to more effective exploration decision making and consequently
reduced project development costs.
Zinnwald Lithium believes that such projects are crucial in
securing the necessary materials for future generations and is
proud to contribute to this effort by providing a case study site
in Germany.
Management and Staffing in Germany
Dr Armin Mueller has stepped down from his role as Managing
Director of Zinnwald Lithium's local German subsidiary, Deutsche
Lithium GmbH, in order to pursue other opportunities. He has been
succeeded by Dr Torsten Bachmann. Dr Bachmann is Dipl.-Ing. of
Environmental Technology and has a PhD in Chemistry. He has over 15
years' experience in science and industry in the area of
photovoltaics and inorganic chemistry and long-term experience in
the management of national research projects. He was team leader in
the "Lithium Zinnwald Project" from 2011 to 2015 and since 2017 has
been responsible for "Chemical Processing" aspects of the
Project.
In addition, the Company has further strengthened the team in
Germany, adding skills in several key disciplines including
geology, mining, and logistics.
5. Outlook
Looking forward, the Company's near-term priorities are the
commencement of the in-fill and exploration drill campaigns. In
addition, it is focused on enhancing the Project technically and
economically through increasing the production potential,
re-orienting it towards lithium hydroxide and seeking optimisation
opportunities across all key areas. The Company will provide
investors with greater clarity on revised project parameters in the
form of a Preliminary Economic Assessment as soon as it can.
As at the date of this announcement, the Company has funds on
hand of EUR6.1 million.
*ENDS*
For further information visit www.zinnwaldlithium.com or
contact:
Anton du Plessis Zinnwald Lithium info@zinnwaldlithium.com
Cherif Rifaat plc
David Hart Allenby Capital
Liz Kirchner (Nominated Adviser) +44 (0) 20 3328 5656
---------------------- --------------------------------
Michael Seabrook Oberon Capital Ltd
Adam Pollock (Broker) +44 (0) 20 3179 5300
---------------------- --------------------------------
Isabel de Salis St Brides Partners zinnwald@stbridespartners.co.uk
Catherine Leftley (Financial PR)
---------------------- --------------------------------
Notes
AIM quoted Zinnwald Lithium plc (EPIC: ZNWD.L) is focussed on
becoming an important supplier of lithium hydroxide to Europe's
fast-growing battery sector. The Company owns 100% of the Zinnwald
Lithium Project in Germany, which has an approved mining licence,
is located in the heart of Europe's chemical and automotive
industries and has the potential to be one of Europe's more
advanced battery grade lithium projects.
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