TIDMZNWD
RNS Number : 2818Q
Zinnwald Lithium PLC
17 October 2023
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
17 October 2023
Zinnwald Lithium plc ('Zinnwald Lithium' or the 'Company')
Operational Update
Zinnwald Lithium plc, the European focused lithium company
developing the integrated Zinnwald Lithium Project (the 'Project')
in Germany, is pleased to provide an operational update on its
recent activities.
HIGHLIGHTS
-- Completed a 84 hole, 27km in-fill drill campaign with
positive results supporting the Company's expectations of a
significant increase in the size of the Zinnwald resource.
-- Ongoing drilling and mineral processing testwork supports
inclusion of Albite Granite ("AG") into the Mineral Resource
Estimate ('MRE'), anticipated to be published in Q4 2023.
-- Average lithium mineralisation true widths within the AG zone
have a vertical thickness of 113 metres.
-- Commenced detailed mine design based on large dimension lithological units.
-- Completed confirmatory Mineral Processing bench scale
testwork by Metso, and now carrying out pilot scale tests of the
material.
-- Advanced regional exploration strategy with the granting of
the Bärenstein exploration license, the acquisition of the drill
core and geological data from the previous holders of the Sadisdorf
exploration license, and the start of further exploration drilling
at Falkenhain.
-- Marko Uhlig to be appointed as Managing Director of Zinnwald
Lithium GmbH, as part of further strengthening of Owners' team in
Germany.
-- Bankable Feasibility Study ('BFS') remains targeted for
completion early in the first half of 2024.
Zinnwald Lithium CEO, Anton du Plessis, commented : "We are
delighted with the progress that has been made in recent months
post the fundraise. Completing the drill campaign is a major
milestone which, together with our forthcoming expanded MRE, will
form a firm foundation on which to base our BFS. The geological
work is supported by the ongoing metallurgical testwork programme
being undertaken in conjunction with a frontrunner in sustainable
technologies, Metso, where early mineral processing results are
extremely encouraging.
"The significant scale of the deposit indicated by the results
of the campaign thus far reinforce our view that the Zinnwald
Lithium Project can be a major supplier to the European battery
sector and a meaningful economic contributor to the region and
local community. This is amplified by the exciting potential of our
other exploration licenses , which may further expand one of
Europe's largest lithium opportunities."
OPERATIONAL UPDATE
Zinnwald Lithium continues to make significant progress in the
development of its flagship Zinnwald Lithium Project in
Germany.
In-fill and Resource Delineation Drill Programme
On 15 September 2023, the Company finished its drill programme
at its core Zinnwald License area, totalling 26,969m of diamond
core drilling across 84 drill holes. This campaign has more than
doubled the total number of holes completed in the license area,
including the historic drill campaigns. The map below charts the
location of all drilled holes across the various drill campaigns.
The Company was able to deploy up to six drill rigs simultaneously,
which allowed the completion of the programme within a tight
timeframe. The Company's purpose-built core facility allowed the
processing of more than 400 metres of core per week with the
achievement of greater than 95% core recovery.
The results of the infill drilling campaign have, as expected,
increased the Company's level of confidence in the geological model
of the orebody ( see relevant graphics (Fig. 1, 2 and 3) included
at the end of this
release ). As previously noted, the Company's objectives for the programme were to:
-- Increase drillhole and data density in all parts of the
deposit to further optimise the geological model (Fig. 1) to
support Bankable Feasibility Study ('BFS') level mine planning,
metallurgical and geotechnical engineering workstreams;
-- Raise the confidence level of the previous geological model
and eventually generate solid Indicated and Measured Mineral
Resources that can be converted to Mineral Reserves in the BFS
applying all economic factors generated during the next few
months;
-- Prove the existence of two mineral domains and optimise the
geological model accordingly (Fig. 2&3):
o An upper high-grade Quartz-Mica-Greisen ('HG', previously Ore
type 1) with a maximal thickness of 75 m. The average Li grade is
3,062 ppm (0.66 % Li2O);
o A lower greisenised Albite-Granite ('AG', previously Ore type
2) that reflects the shape of the granite cupola and an average
vertical thickness of 133 m. The average Li grade is 2,176 ppm
(0.42 % Li2);
-- Generate additional geological and geometallurgical data to
support inclusion of the AG-lithology in order to upgrade the
existing MRE;
-- Improve resolution of the extents of the high grade Greisen mineralisation ('HGG'); and
-- Improve confidence in available existing historical drillhole data.
The Company is currently finalising the updating of the
geological and mineralisation/domaining model and anticipates
publishing the updated MRE in Q4 2023. SRK Consulting (UK) ('SRK')
has been commissioned to complete this updated MRE.
Additionally, the Company carried out extensive surveying
programmes such as a LIDAR underground survey of existing/historic
mine workings and a geotechnical investigation of drill core was
undertaken to assist in mine planning. The Company has also
completed underground structural mapping comparing structural data
from both drill core and in situ surveys. These have corresponded
closely and will assist in the completion of a detailed mine
model.
The latest results from the current drill and survey programme
have improved the confidence in the geological model Significant
recent drill intersections and assay results include:
-- ZGLi 047/2023:
o HGG: 19.55 m (88.45-108.00 m) @ 0.71 % Li2O
o AG: 163.18 m (112.82 m - 276.00) @0.44 % Li2O
-- ZGLi 050/2023:
o HGG : 41.91 m (75.42-117.33 m) @ 0.66 % Li2O
o AG: 122.0 m (133.0-255.0 m) @ 0.46 % Li2O
-- ZGLi 063/2023:
o HGG : 30.85 m (113.6-144.45m) @ 0.78 % Li2O
o AG: 98.9 m (145.1-244.0m) @ 0.50 % Li2O
-- ZGLi 068/2023:
o HGG : 42.75 m (87.25-130.0m) @ 0.70 % Li2O
o AG: 117 m (144.0-261.0m) @ 0.42 % Li2O
-- ZGLi 085/2023:
o HGG : 66.1 m (171.0-237.1m) @ 0.94 % Li2O
o AG: 103.13 m (237.1-340.23m) @ 0.52 % Li2O
Hydrogeology
In September 2023, the Company started a hydrogeology drilling
programme to produce a hydrogeological underground and surface
model. This represents an essential piece of work for both
technical and planning as well as environmental impact assessment
('EIA') permitting requirements.
As part of this programme, seven groundwater ('GW') monitoring
wells will be completed, of which five deep drillings reach the
granite dome of Zinnwald, and two shallow drillings penetrate the
Ryolite rock of the hanging wall. It is currently anticipated that
the drilling programme will be completed in February 2024 and the
Company has deployed two drill rigs for the purpose. As at the date
of this release, three have been completed, of which two have been
converted to GW monitoring wells, while the other is under ongoing
geophysical and hydrogeological investigation. The Company is
supported by a group of consultants in this effort, including SRK,
Geologische Landesuntersuchung Freiberg GmbH ('GLU'), Fugro, and
CSA Global.
Mine Planning
Inclusion of the laterally and vertically extensive Albite
Granite domain has the potential to not only significantly increase
the Project's Mineral Resource base but will also allow
consideration of higher productivity mining methods.
As the drilling programme, geological modelling, geotechnical
investigations, and minerals processing testwork progressed,
strategic mine planning was started by SRK. Large scale sub-level
stoping with subsequent backfill has been determined to be the
optimal mining method. Sub-level stoping offers higher capacity,
lower operating expenditure and easier backfill process than Room
and Pillar-method assumed in the earlier studies.
The large dimensions of the currently assumed lithological
domains will allow substantially higher Lithium grade than the
life-of-mine average during the early production years.
The detailed mine design commenced in October.
Metallurgical Process Development / Testwork
The Company is undertaking a confirmatory metallurgical testwork
programme together with Metso.
Bench scale minerals processing testwork was completed by Metso
during September 2023. This clearly indicated that Lithium recovery
and concentrate mass pull from the previously untested Albite
Granite-lithology are suitable for a simple flow sheet consisting
of a comminution circuit and a rougher-scavenger wet magnetic
separation circuit.
The material used in the tests was from a representative sample
selected in consultation with SRK earlier this year and
incorporates a mix of both HGG and AG. The main findings were:
-- A simple flow can be applied;
-- A simulated Run of Mine sample Li-recovery is c.85 % with a mass pull of c.20%;
-- Li-recovery from HGG is clearly above 85%;
-- Li-recovery from AG is clearly above 80%;
-- The same flow sheet is suitable for both of the ore types; and
-- Both of the ore types can be processed individually or at any
mix without compromising the recoveries.
Pilot scale tests of the material are currently being carried
out by UVR-FIA in its facilities in Freiberg, Germany under
supervision by Metso.
The pilot test will produce sufficient zinnwaldite concentrate
to confirm the earlier calcination testwork and enough quartz sand
to be tested for environmental qualities. The material for both
tests will be available in October 2023.
Exploration Licenses
Whilst the primary focus is on the development of its core
Zinnwald License, the Company continues to develop its other highly
prospective exploration license areas that surround the Zinnwald
license. The Company now has licenses over almost 10,000 hectares
in an area that has been one of the mainstays of German mining for
almost 800 years. The Company believes that these license areas
offer highly prospective opportunities for the longer-term
expansion of the Zinnwald Project as a whole and potentially
provide a Phase 2 production opportunity to further expand one of
Europe's largest lithium opportunities.
Falkenhain
As noted in the previous operational update, the Company has
already completed its first of 10 permitted exploration drill holes
as well as re-assayed available historic core from the license
area. The first hole showed the potential for a significant lithium
resource (140m depth had 51m grading at 3,421 ppm li) in an area
that lies within 2.5 km of the location under consideration for the
mineral processing site. The Company has now commenced drilling the
first of the next block of three additional exploration drill holes
and will publish the results of these holes when available in Q1
2024.
Altenberg
This license area contains the step out from the core Zinnwald
mining license. The Company has identified 80 historic mining areas
within this license, as well as 42 Greisen occurrences and 25
lithium anomalies. The Company will continue to develop its
long-term exploration plans for this area.
Sadisdorf
The Company has now acquired the historic core and other data
from the previous owners of the Sadisdorf license, which it will
now re-test and evaluate to support its plans for a potential
exploration programme. In 2017, the previous owners published a
JORC compliant inferred resource of 25Mt with an average grade of
0.45% Li(2) O (average 2,053 ppm Li).
Bärenstein
On 6 July 2023, the Company announced that it had been granted
the Bärenstein exploration Licence covering approximately 4,933.9
hectares. As shown in the map below, the Bärenstein Licence closes
the gap between Falkenhain and Altenberg Exploration licences. This
greenfield Licence holds significant mineral potential and was
historically mined for tin and silver between the 15th and 19th
centuries. The Bärenstein Licence area includes land that is being
evaluated for the future mining and processing operations of the
Project.
Infrastructure
The work defining the optimal solutions for the required
infrastructure has continued based on the potential for higher
production levels supported by the results of the drilling campaign
and the metallurgical testwork carried out. The Company will hire a
major German consulting group with experience concerning materials
handling, road, and rail infrastructure as well as all civil works
in October 2023. The group will, using trade-off studies, evaluate
the most suitable, economical and environmentally friendly options
for all surface facilities. It is anticipated to start the
infrastructure part of the BFS by the end of October 2023.
Sustainability / ESG Matters
Zinnwald continues to comply with the QCA corporate governance
code and its guidance on sustainability matters and today publishes
its annual QCA Corporate Governance statement. The Company views
sustainability as a guiding principle of its development strategy
and is dedicated to delivering on the commitments to its
shareholders, future investors, clients, employees, local
communities, and other stakeholders. It believes that transparency
and ethical behaviour are central to any successful group and
undertakes all development with respect for the environment and
neighbouring communities.
Environmental
The Saxony Mining Authority ("SOBA") is the ultimate permitting
authority for the mandatory Framework Operating Permit ('MFOP'),
which will cover all matters that require permitting under the
national mining act. As previously announced, the Company formally
submitted its Scoping Document to SOBA on 21 April 2023, which
started the formal permitting process for the construction and
operation in Germany. Based on information in the Scoping Document,
SOBA arranged a Scoping Meeting with Stakeholders on 22 August
2023. The meeting served as a platform to discuss the Project plans
and to receive the first feedback from Stakeholders on all aspects
of the Project. The feedback will be taken forward in subsequent
formal application stages. Based on the Scoping Meeting feedback,
the Company engaged with the State Directorate, department for
spatial planning, in Dresden, and initiated the process of "Early
Spatial Planning Procedure". This will ensure that the Company
remains on track with the upcoming public hearings and in the
permitting process.
The Project's permitting has been supported by GLU, which has
extensive experience of mine and resource project permitting in the
region. The Company has maintained international best practice in
the permitting by keeping a transparent approach to project
development and stakeholder engagement as well as community
relations. The Company also anticipates engaging another
environmental and social consulting group to cover aspects of
social impacts under United Nations Framework Classification for
Resources (UNFC) standards.
Social
Engagement with the local community of Zinnwald has always been
a high priority to the Company. In May 2023, the Company held a
well-attended information event at the Zinnwald town hall that
outlined the on-going drill-campaign as well as future development
plans. The next Town Hall meeting will be held in the village of
Bärenstein in October 2023.
Over the last few months, the Company has operated with six
drill rigs in the town and its vicinity, often drilling in
residents' gardens and the general reception has been positive. The
Company is currently completing the rehabilitation of the drilling
area. A dedicated community relations campaign accompanies the
drilling programme until full completion and will continue during
the hydrogeology drilling campaign. The Company applies the highest
standards and international best practice with regards to health
and safety measures for drilling campaigns.
Personnel
The Company is pleased to announce that Marko Uhlig will be
joining the team as Managing Director of Zinnwald Lithium GmbH.
Marko is a seasoned professional manager with a wealth of
commercial experience gained over a career of more than 30 year. He
has worked in Germany as well as internationally for companies
including ThyssenKrupp AG and SKW Metallurgie AG and is a graduate
of Freiberg University.
In addition, the Company continues to expand its Owners' team in
Germany and has made a number of critical hires across several
functional areas including process engineering and permitting.
These hires all have extensive experience within Germany and
abroad, working in both large and more entrepreneurial early-stage
companies. The local Project team now comprises sixteen full time
staff of which five are female. In total the Company has twenty
full-time professionals working across disciplines in both the
Freiberg and London office locations.
Governance
The Company continues to develop its formal engagement process
with its main stakeholders and the development of its Materiality
Risk Assessment for the Project. This will enable the Company to
better tailor its operational policies, activities and reporting to
the risks identified.
The Company has completed its formal rebranding of the Group and
its subsidiary, previously known as Deutsche Lithium GmbH, under
the banner of Zinnwald Lithium to reflect the strong ties to the
local community and the town bearing its name, as well as its
positioning it as a German project established to serve the German
car industry. The Company's shareholder base also continues to
evolve towards an ultimate majority German and EU ownership.
EU MARKET DEVELOPMENTS
The EU has continued to develop its response to the US Inflation
Reduction Act and, on 14 September 2023, the EU Parliament formally
passed the Critical Raw Materials Act ('CRMA'), which was
originally announced in March 2023 and defines Lithium as both a
"Critical and Strategic" raw material. The CRMA proposes benchmarks
of 10% of the EU's annual consumption of Lithium for extraction and
50% for processing; proposals to simplify permitting procedures;
and a plan to identify selected strategic projects to benefit from
EU financial support. Whilst the CRMA has not yet identified any
specific strategic projects, the Company believes it has a strong
case to meet the four key criteria for classification, namely:
-- Contribute to security of EU's supply of critical raw
materials. The Project's PEA has already identified annual
production of 12,000 tonnes of Lithium, enough for more than
320,000 EVs per annum. The Company hopes to increase this potential
production in its BFS.
-- Be or become technically feasible within a reasonable
timeframe. The Company has already proven that it can produce
battery grade lithium hydroxide from a flowsheet developed in
conjunction with internationally renowned engineering groups and
using well established processes.
-- Be implemented sustainably. The Project is being developed along internationally best practice sustainability lines and will be permitted under some of the most stringent environmental legislation. The Project's process is a relatively benign, low waste operation utilising existing infrastructure with multiple potential uses for its waste streams, including the production of high-grade fertiliser.
-- Have cross border benefits beyond member state concerned
(including downstream). The Project envisions purchasing both
equipment and engineering services from other member states, as
well as likely sourcing of reagent raw materials from local
suppliers cross-border.
OUTLOOK
The strategy of the Company is to deliver a Project that is
meaningful in terms of scale, attractive in terms of its economic
attributes and is based on a robust technical foundation. It is the
Board's view that a project that delivers these attributes stands
the greatest chance of attracting the necessary financing and
support to achieve successful construction. The current and ongoing
work streams are fundamental to this, with some important progress
already made and several key milestones coming up. These include
the publication of an updated MRE within the current quarter,
ongoing metallurgical testwork, continued work on its
hydrogeological drill campaigns, detailed mining planning, and a
BFS that brings all of these work streams together in the first
half of 2024. Alongside this, the team is working on permitting and
commercial aspects. The Company remains well financed with a
current cash position of EUR16.6m and the Board looks forward to
updating the market on progress on all of these fronts as the
Company's various work streams continue.
Figure 1 Overview map indicating the Zinnwald licence area
with all collar points (black: historic drillings; blue: Drilling
campaign 2012 to 2017; red: Drilling campaign 2022 to 2023)
of the drill holes drilled to date. The highlighted stars
visualise the drill holes whose intersections were published
in this RNS. The profile sections along the black lines shown
in Figures 2 and 3 provide a more detailed view.
Figure 2 The NW-SE profile section presents the drill holes
of the past drilling campaigns (between 2012 and 2017) with
a blue collar point and the drill holes of the 2022 to 2023
drilling campaign (red collar point). The drill holes shown
are colour-coded according to the lithologies and show the Li2O%
values of each drill hole. The reported intersections in the
two domains (green: greisenised albite granite, blue: HG Greisen)
are highlighted.
Figure 3 The W-E profile section presents the drill holes of
the past drilling campaigns (between 2012 and 2017) with a blue
collar point and the drill holes of the 2022 to 2023 drilling
campaign (red collar point). The drill holes shown are colour-coded
according to the lithologies and show the Li2O% values of each
drill hole. The reported intersections in the two domains (green:
greisenised albite granite, blue: HG Greisen) are highlighted.
The technical information relating to geology, the drill
programme, mining and processing in this announcement has been
reviewed on behalf of Zinnwald Lithium by Martin Pittuck CEng, FGS,
MIMMM of SRK Consulting. Mr Pittuck is a Corporate Consultant of
SRK Consulting Ltd. Mr Pittuck has sufficient experience relevant
to the style of mineralisation and type of deposit under
consideration, and to the activity which he is undertaking to
qualify as a Competent Person in accordance with the guidance note
for Mining, Oil & Gas Companies issued by the London Stock
Exchange in respect of AIM Companies, which outlines standards of
disclosure for mineral projects. Mr Pittuck consents to the
inclusion in this announcement of the matters based on his
information in the form and context in which it appears.
*ENDS*
For further information visi t www.zinnwaldlithium.com or
contact:
Anton du Plessis Zinnwald Lithium info@zinnwaldlithium.com
Cherif Rifaat plc
David Hart Allenby Capital
Dan Dearden-Williams (Nominated Adviser) +44 (0) 20 3328 5656
---------------------- --------------------------------
Oberon Capital
Michael Seabrook Ltd
Adam Pollock (Joint Broker) +44 (0) 20 3179 5300
---------------------- --------------------------------
Tamesis Partner
Richard Greenfield LLP
Charles Bendon (Joint Broker) +44 (0) 20 3882 2868
---------------------- --------------------------------
Isabel de Salis St Brides Partners zinnwald@stbridespartners.co.uk
Paul Dulieu (Financial PR)
---------------------- --------------------------------
Notes
AIM quoted Zinnwald Lithium plc (EPIC: ZNWD.L) is focused 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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