TIDMEMH
RNS Number : 6551D
European Metals Holdings Limited
28 April 2017
For immediate release 28April 2017
EUROPEAN METALS HOLDINGS LIMITED
QUARTERLY ACTIVITIES REPORT - MARCH 2017
HIGHLIGHTS
* Drilling program completed & appointment of Czech
Country Manager
* Initial steps towards mining licence achieved
* Final drilling results
* Substantial increase in Indicated Resource at Cinovec
* Preliminary Feasibility Study confirms Cinovec as
potentially low cost lithium carbonate producer
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 March 2017.
DRILL PROGRAM COMPLETED & APPOINTMENT OF CZECH COUNTRY
MANAGER
The planned core drillhole programme was completed in
mid-January 2017 on time and on budget and without time loss
incidents. In total 17 drillholes were drilled to a summary depth
of 6,081 meters.
The Company also announced the appointment of Richard Pavlik, a
highly experienced mining executive to the role of Country Manager.
Mr Pavlik holds a Masters 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.
Mr Pavlik also has experience as a Project Analyst at Normandy
Capital in Sydney as part of a postgraduate programme from
Swinburne University. Mr Pavlik has held previous senior positions
within OKD and New World Resources as Chief Engineer, and as Head
of Surveying and Geology. He has also served as the Head of the
Supervisory Board of NWR Karbonia, a Polish subsidiary of New World
Resources (UK) Limited. Mr Pavlik's primary responsibilities will
be to manage the in-country aspects of the Cinovec development
programme, coordinate technical work and liaise with Government
authorities on permitting and licensing of the project.
INITIAL STEPS TOWARDS MINING LICENCE ACHIEVED
The Company was informed in late January that the Cinovec South
resource estimate was approved by a Committee of Experts and was
subsequently added to the Czech State Register of Mineral deposits,
which is the first step towards achieving a mining licence.
FINAL DRILLING RESULTS
The analytical results from the final seven drillholes were
received by early February and they were excellent in terms of
Lithium grade and the length of the mineralised intervals. A
summary of the results are as follows:
* Hole CIW-22 contains the best lithium intercept to
date from the Company's drill programme of 264.5m
averaging 0.54% Li(2) O. This hole, collared in the
central part of Cinovec main, also contains
significant tin, tungsten, niobium and tantalum
mineralisation. An unexpected bonus was the
high-grade zone of tungsten, intersected by drillhole
CIW-22 at 238m depth which graded almost 3% of
tungsten
* Centrally located, hole CIW-25 contains the Company's
longest lithium intercept to date with a length of
361.5m averaging 0.43% Li(2) O, including a high
grade lithium interval of 14.7m averaging 0.93% Li(2)
O, and significant intervals of Sn and W
* Hole CIW- 23, also located in the central part of
Cinovec main, returned an interval of 261.1m
averaging 0.50% Li(2) O
* Hole CIW-26, located at the western edge of the
deposit, returned an interval of 236.25m averaging
0.49% Li(2) O
* Hole CIW-10, also located at the western edge of the
deposit, returned an interval of 233.9m averaging
0.43% Li(2) O
* Hole CIW-27, located in the central part of Cinovec
main, retuned a Li intercept of 235m averaging 0.49%
Li(2) O incl. high grade zones of 14m @ 0.97% Li(2) O
and 2m @ 1.79% Li(2) O
* Hole CIW-06, also centrally located, returned a Li
intercept of 258.5 m averaging 0.44% Li(2) O
including high grade zones of 3m at 1.11% Li(2) O,
2.75m at 0.91% Li(2) O and 2m at 1.03% Li(2) O
SUBSTANTIAL INCREASE IN INDICATED RESOURCE AT CINOVEC
On completion of the extensive seven-month drilling program, the
Company has successfully been able to increase the confidence in
the resource base and substantially upgrade a significant part of
the resource from the Inferred category to the higher confidence
JORC compliant Indicated Mineral Resource category as follows;
* Lithium Indicated Resource increased 50% to 3.9 Mt
LCE, contained in 347.7 Mt @ 0.45% Li(2) O and 0.04%
Sn (0.1% Li cut-off)
* Lithium Total Resource increased 11.8% to 7.0 Mt LCE,
contained in 656.5 Mt @0.43 % Li(2) O and 0.04% Sn
(0.1% Li cut-off)
* Total contained tin in the Total Mineral Resource
increased to 262,600 tonnes
* Lithium Exploration Target remains 350 to 450 Mt @
0.39% to 0.47% for 3.4 Mt to 5.3 Mt of LCE
DEVELOPMENTS POST REPORTING PERIOD
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.
SUMMARY
It has been another productive quarter for European Metals with
a number of key developments which are very positive for the
company. These developments indicate significant enhancements to
the economics of the Cinovec Project which have now been reflected
in the Preliminary Feasibility Study. The company will now move
directly into a definitive feasibility study to accelerate the
project towards development.
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 is an historic mine incorporating a
significant undeveloped lithium-tin resource with by-product
potential including tungsten, rubidium, scandium, niobium and
tantalum and potash. 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.
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 European Metals Director 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 of the energy
indices" 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 minerals have
separation" 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 Codes, is that
or "Indicated part of a Mineral Resource which has been sampled
Mineral Resource" 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 Codes, is that
"Inferred Mineral part of a Mineral Resource for which the tonnage
Resource" 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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