For immediate release
20 December 2024
SIGNIFICANT INCREASE IN
PLANNED LITHIUM PRODUCTION
European Metals Holdings Limited (ASX & AIM: EMH, OTCQX:
EMHXY and EMHLF) ("European Metals" or the
"Company") is pleased to announce a significant
increase in the planned annual production of lithium chemicals from
the Cinovec Project ("Cinovec" or
"the
Project").
Highlights
· Planned production of battery-grade lithium hydroxide
monohydrate increased by 42% to 41,658 tpa or 36,670 tpa of
battery-grade lithium carbonate.
· Planned run-of-mine ore production increased by 42% taking the
Project production rate from 2.25 mtpa to 3.20 mtpa, without
processing plant head grade, the Life of Mine or plant recovery
being significantly impacted.
· This
planned increase in production enables the Project to benefit from
significant economies of scale which will be confirmed in the
Definitive Feasibility Study ("DFS") now due for completion in mid-2025.
Keith Coughlan, Executive Chairman, commented:
"This
work on the production increase was carried out
by Bara as part
of its Mining DFS and is another example of the important work
being done to improve the economics of the Cinovec Project during
the extended timeframe for the DFS. This significant increase in
planned lithium output will lead to additional
recognition of how important the Cinovec Project is and the role
the Project will play in enabling the EU to reach its goals of
lithium self-sufficiency by 2030."
Increase in Planned Mine and Battery Grade End-Product Lithium
Chemicals Production
The assessment of production
capacity capabilities for the Project has now been completed with
the result being that the run-of-mine production
("ROM") has been increased from
2.25 million tonnes per annum ("mtpa") to 3.2 mtpa.
The substantial increase in ROM has
resulted in an increase in the planned production of lithium
hydroxide monohydrate from 29,385 tonnes per annum
("tpa") to 41,658 tpa or 36,670
tpa of lithium carbonate without the need to increase the size of
footprint of the underground mine at surface. This 42%
increase in ROM production is expected to result in considerable
economic benefits to be gained due to the economies of scale
flowing through to the lithium chemical plant.
In the past the critical constraint
on mine production capacity for the Project was the size of the
proposed Dukla processing plant site, at 24 hectares. The Prunéřov
EPR1 site which is now to be used is 36 hectares and enables
increased ROM production.
Bara Consulting, the mining adviser
to the Project, was instructed to review options for an increase in
ROM production. This review was at Concept Study level, building on
the previous mining Pre-Feasibility Study ("PFS") published on 19th January 2022 and subsequent
DFS-level of work as part of the overall DFS.
The limitations placed on ROM
capacity review by the Project team were that the mine portal area
could not increase in size or change position and that the box-cut
and twin decline system would remain the same as designed for the
PFS and as a result not materially impact the environmental
footprint.
The results of increasing planned
mine production levels when compared with the PFS mine production
levels are set out in the table below:
|
|
|
New Plan
|
PFS
|
|
Annual ROM production at capacity,
mtpa
|
+42%
|
3.20
|
2.25
|
|
Production Years (LOM)
|
|
26
|
25
|
|
Production Years excluding
ramp-up/down
|
|
21
|
22
|
|
Total Mining Inventory mined over
LOM, mt
|
+36%
|
74.0
|
54.5
|
|
Mining Inventory in Measured &
Indicated JORC Resource, mt
|
|
55.0
|
54.5
|
|
Mining Inventory in Inferred JORC
Resource, mt
|
|
19.0
|
0.0
|
|
Percentage of 708.2mt JORC Resource
extracted
|
|
10.4
|
7.7
|
|
Average LOM ore grade, Li
%
|
-7%
|
0.262
|
0.281
|
|
Lithium hydroxide monohydrate
production, tpa
|
+42%
|
41,658
|
29,386
|
|
LCE production, tpa
|
+42%
|
36,670
|
25,868
|
|
Lithium recovery to
concentrate
|
|
91.5%
|
90%
|
|
Lithium recovery in chemical
plant
|
|
89.5%
|
91%
|
|
Overall lithium recovery
|
|
81.9%
|
82%
|
The mine plan for the new 3.2mtpa
ROM planned production level is the same as the mine plan for the
PFS producing 2.25mtpa, except that it is mined faster and Inferred
JORC Resources are brought into production in the last eight years
of mining (Years 21 to 28), including three ramp-down years). No
Inferred Resources are included in the mine plan in Years 1 to
20.
Assumed Lithium Recovery Levels
The lithium recovery to concentrate
used in this Study represents the recovery from a Front-End
Comminution and Beneficiation circuit ("FECAB") design which is 100%
flotation. As detailed in the Company's announcements of
31st July 2024 and 27th November 2024, the
repeatable lithium recoveries for un-deslimed flotation achieved in
bench-scale testing are >94%. The FECAB recovery rate of 91.5%
used in the table above incorporates allowances for full scale-up /
industrial plant performance.
DFS
Status Update
As noted in the Cinovec Project
Update announcement of 27th November 2024, results of
the DFS are expected to be released in mid-2025. The increased
planned ROM and battery grade lithium product levels will not
impact this timeline.
European Metals, in developing the
Cinovec Lithium Project, is well positioned to meet the rising
demand for battery materials in the European Union ("EU") and to
support the EU's objectives to secure supply of Critical Minerals
including lithium within the EU. The Cinovec Project is the largest
hard rock lithium project in the EU and Europe and is centrally
located on the Czech Republic's border with Germany. The project
has excellent ESG credentials underpinning the production of
battery grade lithium hydroxide and/or carbonate with low
CO2 emissions in a global context.
This announcement has been approved
for release by the Board.
CONTACT
For further information on this
update or the Company generally, please visit our website at
www.europeanmet.com
or see full contact details at the end of this
release.
BACKGROUND INFORMATION ON
CINOVEC
PROJECT OVERVIEW
Cinovec Lithium Project
Geomet s.r.o. controls the mineral
exploration licenses awarded by the Czech State over the Cinovec
Lithium Project. Geomet has been granted a preliminary mining
permit by the Ministry of Environment and the Ministry of Industry.
The company is owned 49% by EMH and 51% by CEZ a.s. through its
wholly owned subsidiary, SDAS. Cinovec hosts a globally significant
hard rock lithium deposit with a total Measured Mineral Resource of
53.3Mt at 0.48% Li2O, Indicated Mineral Resource of
360.2Mt at 0.44% Li2O and an Inferred Mineral Resource
of 294.7Mt at 0.39% Li2O containing a combined 7.39
million tonnes Lithium Carbonate Equivalent (refer to the Company's ASX/ AIM release dated
13 October 2021)
(Resource Upgrade at
Cinovec Lithium Project).
An initial Probable Ore Reserve of
34.5Mt at 0.65% Li2O reported 4 July 2017
(Cinovec
Maiden Ore Reserve - Further Information) has been declared to cover the first 20 years mining at an
output of 22,500tpa of lithium carbonate (refer to the Company's ASX/ AIM release dated
11 July 2018) (Cinovec Production Modelled
to Increase to 22,500tpa of Lithium
Carbonate).
This makes Cinovec the largest hard
rock lithium deposit in Europe and the fifth largest non-brine
deposit in the world.
The deposit has previously had over
400,000 tonnes of ore mined as a trial sub-level open stope
underground mining operation.
On 19 January 2022, EMH provided an
update to the 2019 PFS Update. It confirmed the deposit is amenable
to bulk underground mining (refer to the Company's ASX/ AIM release
dated 19 January 2022) (PFS Update delivers
outstanding results). Metallurgical
test-work has produced both battery-grade lithium hydroxide and
battery-grade lithium carbonate at excellent recoveries. In
February 2023 DRA Global Limited ("DRA") was appointed to complete the Definitive Feasibility Study
("DFS").
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. The deposit lies in an active
mining region.
The economic viability of Cinovec
has been enhanced by the recent push for supply security of
critical raw materials for battery production, including the strong
increase in demand for lithium globally, and within Europe
specifically, as demonstrated by the European Union's Critical Raw
Materials Act (CRMA).
BACKGROUND INFORMATION ON
CEZ
Headquartered in the Czech Republic,
CEZ a.s. is one of the largest companies in the Czech Republic and
a leading energy group operating in Western and Central Europe.
CEZ's core business is the generation, distribution, trade in, and
sales of electricity and heat, trade in and
sales of natural gas, and coal extraction. The foundation of power
generation at CEZ Group are emission-free sources. The CEZ
strategy named Clean Energy for Tomorrow is based on ambitious
decarbonisation, development of renewable sources and nuclear
energy. CEZ announced that it would move forward its climate
neutrality commitment by ten years to 2040.
The largest shareholder of its
parent company, CEZ a.s., is the Czech Republic with a stake
of approximately 70%. The shares of CEZ a.s. are traded on the
Prague and Warsaw stock exchanges and included in the PX and
WIG-CEE exchange indices. CEZ's market capitalization is
approximately EUR 20.3 billion.
As one of the leading Central
European power companies, CEZ intends to develop
several projects in areas of energy storage and battery
manufacturing in the Czech Republic and in
Central Europe.
CEZ is also a market leader for
E-mobility in the region and has installed and operates a network
of EV charging stations throughout Czech Republic. The automotive
industry in the Czech Republic is a significant contributor to GDP,
and the number of EV's in the country is expected to grow
significantly in the coming years.
COMPETENT PERSONS AND QUALIFIED PERSON FOR THE PURPOSES OF THE
AIM NOTE FOR MINING AND OIL & GAS COMPANIES
Information in this release that relates to the FECAB metallurgical testwork
is based on, and fairly reflects, technical data and supporting
documentation compiled or supervised by Mr Walter Mädel, a
full-time employee of Geomet s.r.o an associate of the Company. Mr
Mädel is a member of the Australasian Institute of Mining and
Metallurgy ("AUSIMM") and a mineral
processing professional with over 27 years of experience in
metallurgical process and project development, process design,
project implementation and operations. Of his experience, at least
5 years have been specifically focused on hard rock pegmatite
Lithium processing development. Mr Mädel consents to the inclusion
in the announcement of the matters based on this information in the
form and context in which it appears. Mr Mädel is a
participant in the long-term incentive plan of the
Company.
Information in this release that
relates to exploration results is based on, and fairly reflects,
information and supporting documentation compiled by
Dr Vojtech Sesulka. Dr Sesulka is a Certified Professional
Geologist (certified by the European Federation of Geologists), a
member of the Czech Association of Economic Geologist, and a
Competent Person as defined in the JORC Code 2012 edition of the
Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Dr Sesulka has provided his prior
written consent to the inclusion in this report of the matters
based on his information in the form and context in which it
appears. Dr Sesulka is an independent consultant with more than 10
years working for the EMH or Geomet companies. Dr Sesulka does not
own any shares in the Company and is not a participant in any
short- or long-term incentive plans of the
Company.
Information in this release that
relates to metallurgical test work and the process design criteria
and flow sheets in relation to the LCP is based on, and fairly
reflects, information and supporting documentation compiled by Mr
Grant Harman (B.Sc Chem Eng, B.Com). Mr Harman is an independent
consultant and the principal of Lithium Consultants Australasia Pty
Ltd with in excess of 14 years of lithium chemicals experience. Mr
Harman has provided his prior written consent to the inclusion in
this report of the matters based on his information in the form and
context that the information appears. Mr Harman is a participant in
the long-term incentive plan of the Company.
The information in this release that
relates to Mineral Resources and Exploration Targets is
based on, and fairly reflects, information
and supporting documentation prepared by Mr Lynn Widenbar. Mr
Widenbar, who is a Member of the Australasian Institute of Mining
and Metallurgy and a Member of the Australasian Institute of
Geoscientists, 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 has
provided his prior written consent to the inclusion in this report
of the matters based on his information in the form and context
that the information appears. Mr Widenbar does not own any shares
in the Company and is not a participant in any short- or long-term
incentive plans of the Company.
The Company confirms that it is not
aware of any new information or data that materially affects the
information included in the original market announcement and, in
the case of estimates of Mineral Resources or Ore Reserves, that
all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and
have not materially changed. The Company confirms that the form and
context in which the Competent Person's findings are presented have
not been materially modified from the original market
announcement.
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 (Li2O) content or
percent lithium carbonate (Li2CO3)
content.
Lithium carbonate equivalent
("LCE") is the industry standard
terminology for, and is equivalent to,
Li2CO3. 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
Li2CO3 value in percent. Use of LCE assumes
100% recovery and no process losses in the extraction of
Li2CO3 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 to Li
|
Convert to Li2O
|
Convert to Li2CO3
|
Convert to LiOH.H2O
|
|
Lithium
|
Li
|
1.000
|
2.153
|
5.325
|
6.048
|
|
Lithium Oxide
|
Li2O
|
0.464
|
1.000
|
2.473
|
2.809
|
|
Lithium Carbonate
|
Li2CO3
|
0.188
|
0.404
|
1.000
|
1.136
|
|
Lithium Hydroxide
|
LiOH.H2O
|
0.165
|
0.356
|
0.880
|
1.000
|
|
Lithium Fluoride
|
LiF
|
0.268
|
0.576
|
1.424
|
1.618
|
WEBSITE
A copy of
this announcement is available from the Company's website at
www.europeanmet.com/announcements/.
ENQUIRIES:
|
European Metals Holdings Limited
Keith Coughlan, Executive
Chairman
Kiran Morzaria, Non-Executive
Director
Henko Vos, Company
Secretary
|
Tel: +61 (0) 419 996 333
Email: keith@europeanmet.com
Tel: +44 (0) 20 7440 0647
Tel: +61 (0) 400 550 042
Email: cosec@europeanmet.com
|
|
Zeus Capital Limited (Nomad & Broker)
James Joyce / Darshan
Patel
(Corporate Finance)
Harry Ansell (Broking)
|
Tel: +44 (0) 203 829 5000
|
|
BlytheRay (Financial PR)
Tim Blythe
Megan Ray
Chapter 1 Advisors (Financial PR - Aus)
David Tasker
|
Tel: +44 (0) 20 7138 3222
Tel: +61 (0) 433 112
936
|
The information contained within
this announcement is deemed by the Company to constitute inside
information under the Market Abuse Regulation (EU) No. 596/2014
("MAR") as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 and is disclosed in accordance
with the Company's obligations under Article 17 of MAR.
JORC Code, 2012 Edition -
Table 1
Section 1 Sampling Techniques and Data
|
Criteria
|
JORC Code explanation
|
Commentary
|
|
Sampling
techniques
|
·
Nature and
quality of sampling (eg cut channels, random chips, or specific
specialised industry standard measurement tools appropriate to the
minerals under investigation, such as down hole gamma sondes, or
handheld XRF instruments, etc). These examples should not be taken
as limiting the broad meaning of sampling.
·
Include
reference to measures taken to ensure sample representivity and the
appropriate calibration of any measurement tools or systems
used.
·
Aspects of the
determination of mineralisation that are Material to the Public
Report.
·
In cases where
'industry standard' work has been done this would be relatively
simple (eg 'reverse circulation drilling was used to obtain 1 m
samples from which 3 kg was pulverised to produce a 30 g charge for
fire assay'). In other cases more explanation may be required, such
as where there is coarse gold that has inherent sampling problems.
Unusual commodities or mineralisation types (eg submarine nodules)
may warrant disclosure of detailed information.
|
· Between 2014 and 2021, the
Company commenced a core drilling program and collected samples
from core splits in line with JORC Code
guidelines.
· Sample intervals honour
geological or visible mineralisation boundaries and vary between
50cm and 2m. The majority of samples are 1m in
length.
· The samples are half or
quarter of core; the latter applied for large diameter
core.
· Between 1952 and 1989, the
Cinovec deposit was sampled in two ways: in drill core and
underground channel samples.
· Channel samples, from drift
ribs and faces, were collected during detailed exploration between
1952 and 1989 by Geoindustria n.p. and Rudne Doly n.p., both
Czechoslovak State companies. Sample length was 1m, channel 10x5cm,
sample mass about 15kg. Up to 1966, samples were collected using
hammer and chisel; from 1966 a small drill (Holman Hammer) was
used. 14179 samples were collected and transported to a crushing
facility.
· Core and channel samples
were crushed in two steps: to -5mm, then to -0.5mm. 100g splits
were obtained and pulverized to -0.045mm for
analysis.
|
|
Drilling
techniques
|
·
Drill type (eg
core, reverse circulation, open-hole hammer, rotary air blast,
auger, Bangka, sonic, etc) and details (eg core diameter, triple or
standard tube, depth of diamond tails, face-sampling bit or other
type, whether core is oriented and if so, by what method,
etc).
|
· In 2014, three core holes
were drilled for a total of 940.1m. In 2015, six core holes were
drilled for a total of 2,455.0m. In 2016, eighteen core holes were
drilled for a total of 6,459.6m. In 2017, six core holes were
drilled for a total of 2697.1m. In 2018, 5 core holes were drilled
for a total of 1,640.3 and in 2020, 22 core holes were drilled for
a total of 6,621.7m.
· In 2014 and 2015, the core
size was HQ3 (60mm diameter) in upper parts of holes; in deeper
sections the core size was reduced to NQ3 (44mm diameter). Core
recovery was high (average 98%). Between 2016 and 2021 up to four
drill rigs were used, and select holes employed PQ sized core for
upper parts of the drillholes.
· Historically only core
drilling was employed, either from surface or from
underground.
· Surface drilling: 149 holes,
total 55,570 meters; vertical and inclined, maximum depth 1596m
(structural hole). Core diameters from 220mm near surface to 110 mm
at depth. Average core recovery 89.3%.
· Underground drilling: 766
holes for 53,126m; horizontal and inclined. Core diameter 46mm;
drilled by Craelius XC42 or DIAMEC drills.
|
|
Drill sample
recovery
|
·
Method of
recording and assessing core and chip sample recoveries and results
assessed.
·
Measures taken
to maximise sample recovery and ensure representative nature of the
samples.
·
Whether a
relationship exists between sample recovery and grade and whether
sample bias may have occurred due to preferential loss/gain of
fine/coarse material.
|
· Core recovery for historical
surface drill holes was recorded on drill logs and entered into the
database.
· No correlation between grade
and core recovery was established.
|
|
Logging
|
·
Whether core and
chip samples have been geologically and geotechnically logged to a
level of detail to support appropriate Mineral Resource estimation,
mining studies and metallurgical studies.
·
Whether logging
is qualitative or quantitative in nature. Core (or costean,
channel, etc) photography.
·
The total length
and percentage of the relevant intersections
logged.
|
· In 2014-2021, core
descriptions were recorded into paper logging forms by hand and
later entered into an Excel database.
· Core was logged in detail
historically in a facility 6km from the mine site. The
following features were logged and recorded in paper logs:
lithology, alteration (including intensity divided into weak,
medium and strong/pervasive), and occurrence of ore minerals
expressed in %, macroscopic description of congruous intervals and
structures and core recovery.
|
|
Sub-sampling techniques and
sample preparation
|
·
If core, whether
cut or sawn and whether quarter, half or all core
taken.
·
If non-core,
whether riffled, tube sampled, rotary split, etc and whether
sampled wet or dry.
·
For all sample
types, the nature, quality and appropriateness of the sample
preparation technique.
·
Quality control
procedures adopted for all sub-sampling stages to maximise
representivity of samples.
·
Measures taken
to ensure that the sampling is representative of the in situ
material collected, including for instance results for field
duplicate/second-half sampling.
·
Whether sample
sizes are appropriate to the grain size of the material being
sampled.
|
· In 2014-21, core was washed,
geologically logged, sample intervals determined and marked then
the core was cut in half. Larger core was cut in half and one half
was cut again to obtain a quarter core sample. One half or
one quarter samples was delivered to ALS Global for assaying after
duplicates, blanks and standards were inserted in the sample
stream. The remaining drill core is stored on site for
reference.
· Sample preparation was
carried out by ALS Global in Romania, using industry standard
techniques appropriate for the style of mineralisation represented
at Cinovec.
· Historically, core was
either split or consumed entirely for analyses.
· Samples are considered to be
representative.
· Sample sizes relative to
grain sizes are deemed appropriate for the analytical techniques
used.
|
|
Quality of assay data and
laboratory tests
|
·
The nature,
quality and appropriateness of the assaying and laboratory
procedures used and whether the technique is considered partial or
total.
·
For geophysical
tools, spectrometers, handheld XRF instruments, etc, the parameters
used in determining the analysis including instrument make and
model, reading times, calibrations factors applied and their
derivation, etc.
·
Nature of
quality control procedures adopted (eg standards, blanks,
duplicates, external laboratory checks) and whether acceptable
levels of accuracy (ie lack of bias) and precision have been
established.
|
· In 2014-21, core samples
were assayed by ALS Global. The most appropriate analytical methods
were determined by results of tests for various analytical
techniques.
· The following analytical
methods were chosen: ME-MS81 (lithium borate fusion or 4 acid
digest, ICP-MS finish) for a suite of elements including Sn and W
and ME-4ACD81 (4 acid digest, ICP-AES finish) additional elements
including lithium.
· About 40% of samples were
analysed by ME-MS81d (ME-MS81 plus whole rock package). Samples
with over 1% tin are analysed by XRF. Samples over 1% lithium were
analysed by Li-OG63 (four acid and ICP finish).
· Standards, blanks and
duplicates were inserted into the sample stream. Initial tin
standard results indicated possible downgrading bias; the
laboratory repeated the analysis with satisfactory
results.
· Historically, Sn content was
measured by XRF and using wet chemical methods. W and Li were
analysed by spectral methods.
· Analytical QA was internal
and external. The former subjected 5% of the sample to repeat
analysis in the same facility. 10% of samples were analysed
in another laboratory, also located in Czechoslovakia. The QA/QC
procedures were set to the State norms and are considered adequate.
It is unknown whether external standards or sample duplicates were
used.
· Overall accuracy of sampling
and assaying was proved later by test mining and reconciliation of
mined and analysed grades.
|
|
Verification of sampling and
assaying
|
·
The verification
of significant intersections by either independent or alternative
company personnel.
·
The use of
twinned holes.
·
Documentation of
primary data, data entry procedures, data verification, data
storage (physical and electronic) protocols.
·
Discuss any
adjustment to assay data.
|
· During the 2014-21 drill
campaigns Geomet indirectly verified grades of tin and lithium by
comparing the length and grade of mineral intercepts with the
current block model.
|
|
Location of data
points
|
·
Accuracy and
quality of surveys used to locate drill holes (collar and down-hole
surveys), trenches, mine workings and other locations used in
Mineral Resource estimation.
·
Specification of
the grid system used.
·
Quality and
adequacy of topographic control.
|
· In 2014-21, drill collar
locations were surveyed by a registered surveyor.
· Down hole surveys were
recorded by a contractor.
· Historically, drill hole
collars were surveyed with a great degree of precision by the mine
survey crew.
· Hole locations are recorded
in the local S-JTSK Krovak grid.
· Topographic control is
excellent.
|
|
Data spacing and
distribution
|
·
Data spacing for
reporting of Exploration Results.
·
Whether the data
spacing and distribution is sufficient to establish the degree of
geological and grade continuity appropriate for the Mineral
Resource and Ore Reserve estimation procedure(s) and
classifications applied.
·
Whether sample
compositing has been applied.
|
· Historical data density is
very high.
· Spacing is sufficient to
establish Measured, Indicated and Inferred Mineral Resource
Estimates.
· Areas with lower coverage of
Li% assays have been identified as Exploration
Targets.
· Sample compositing to 1m
intervals has been applied mathematically prior to estimation but
not physically.
|
|
Orientation of data in
relation to geological structure
|
·
Whether the
orientation of sampling achieves unbiased sampling of possible
structures and the extent to which this is known, considering the
deposit type.
·
If the
relationship between the drilling orientation and the orientation
of key mineralised structures is considered to have introduced a
sampling bias, this should be assessed and reported if
material.
|
· In 2014-21, drill hole
azimuth and dip was planned to intercept the mineralized zones at
near-true thickness. As the mineralized zones dip shallowly
to the south, drill holes were vertical or near vertical and
directed to the north. Due to land access restrictions, certain
holes could not be positioned in sites with ideal drill
angle.
· Geomet has not directly
collected any samples underground because the workings are
inaccessible at this time.
· Based on historic reports,
level plan maps, sections and core logs, the samples were collected
in an unbiased fashion, systematically on two underground levels
from drift ribs and faces, as well as from underground holes
drilled perpendicular to the drift directions. The sample
density is adequate for the style of deposit.
· Multiple samples were taken
and analysed by the Company from the historic tailing repository.
Only lithium was analysed (Sn and W too low). The results
matched the historic grades.
|
|
Sample
security
|
·
The measures
taken to ensure sample security.
|
· In the 2014-21 programs,
only Geomet's employees and contractors handled drill core and
conducted sampling. The core was collected from the drill rig each
day and transported in a company vehicle to the secure Geomet
premises where it was logged and cut. Geomet geologists
supervised the process and logged/sampled the core. The
samples were transported by Geomet personnel in a company vehicle
to the ALS Global laboratory pick-up station. The remaining core is
stored under lock and key.
· Historically, sample
security was ensured by State norms applied to exploration.
The State norms were similar to currently accepted best practice
and JORC guidelines for sample security.
|
|
Audits or
reviews
|
·
The results of
any audits or reviews of sampling techniques and
data.
|
· Review of sampling
techniques was carried out from written records. No flaws
found.
|
Section 2 Reporting of Exploration Results
(Criteria listed in section 1 also
apply to this section.)
|
Criteria
|
JORC Code explanation
|
Commentary
|
|
Mineral tenement and land
tenure status
|
·
Type, reference
name/number, location and ownership including agreements or
material issues with third parties such as joint ventures,
partnerships, overriding royalties, native title interests,
historical sites, wilderness or national park and environmental
settings.
·
The security of
the tenure held at the time of reporting along with any known
impediments to obtaining a licence to operate in the
area.
|
· In
June 2020, the Czech Ministry of the Environment granted Geomet
three Preliminary Mining Permits which cover the whole of the
Cinovec deposit. The permits are valid until 2028.
· Geomet plans to amalgamate
these into a single Final Mining Permit.
|
|
Exploration done by other
parties
|
·
Acknowledgment
and appraisal of exploration by other parties.
|
· There has been no
acknowledgment or appraisal of exploration by other
parties.
|
|
Geology
|
·
Deposit type,
geological setting and style of mineralisation.
|
· Cinovec is a granite-hosted
tin-tungsten-lithium deposit.
· Late Variscan age,
post-orogenic granite intrusion tin and tungsten occur in oxide
minerals (cassiterite and wolframite). Lithium occurs in
zinnwaldite, a Li-rich muscovite.
· Mineralization in a small
granite cupola. Vein and greisen type. Alteration is
greisenisation, silicification.
|
|
Drill hole
Information
|
·
A summary of all
information material to the understanding of the exploration
results including a tabulation of the following information for all
Material drill holes:
o easting and northing of the
drill hole collar
o elevation or RL (Reduced
Level - elevation above sea level in metres) of the drill hole
collar
o dip and azimuth of the
hole
o down hole length and
interception depth
o hole
length.
·
If the exclusion
of this information is justified on the basis that the information
is not Material and this exclusion does not detract from the
understanding of the report, the Competent Person should clearly
explain why this is the case.
|
· Reported
previously.
|
|
Data aggregation
methods
|
·
In reporting
Exploration Results, weighting averaging techniques, maximum and/or
minimum grade truncations (eg cutting of high grades) and cut-off
grades are usually Material and should be stated.
·
Where aggregate
intercepts incorporate short lengths of high grade results and
longer lengths of low grade results, the procedure used for such
aggregation should be stated and some typical examples of such
aggregations should be shown in detail.
·
The assumptions
used for any reporting of metal equivalent values should be clearly
stated.
|
· Reporting of exploration
results has not and will not include aggregate
intercepts.
· Metal equivalent not used in
reporting.
· No grade truncations
applied.
|
|
Relationship between
mineralisation widths and intercept lengths
|
·
These
relationships are particularly important in the reporting of
Exploration Results.
·
If the geometry
of the mineralisation with respect to the drill hole angle is
known, its nature should be reported.
·
If it is not
known and only the down hole lengths are reported, there should be
a clear statement to this effect (eg 'down hole length, true width
not known').
|
· Intercept widths are
approximate true widths.
· The mineralization is mostly
of disseminated nature and relatively homogeneous; the orientation
of samples is of limited impact.
· For higher grade veins care
was taken to drill at angles ensuring closeness of intercept length
and true widths.
· The block model accounts for
variations between apparent and true dip.
|
|
Diagrams
|
·
Appropriate maps
and sections (with scales) and tabulations of intercepts should be
included for any significant discovery being reported These should
include, but not be limited to a plan view of drill hole collar
locations and appropriate sectional views.
|
· Appropriate maps and
sections have been generated by Geomet and independent consultants.
Available in customary vector and raster outputs and partially in
consultant's reports.
|
|
Balanced
reporting
|
·
Where
comprehensive reporting of all Exploration Results is not
practicable, representative reporting of both low and high grades
and/or widths should be practiced to avoid misleading reporting of
Exploration Results.
|
· Balanced reporting in
historic reports guaranteed by norms and standards, verified in
1997 and 2012 by independent consultants.
· The historic reporting was
completed by several State institutions and cross
validated.
|
|
Other substantive exploration
data
|
·
Other
exploration data, if meaningful and material, should be reported
including (but not limited to): geological observations;
geophysical survey results; geochemical survey results; bulk
samples - size and method of treatment; metallurgical test results;
bulk density, groundwater, geotechnical and rock characteristics;
potential deleterious or contaminating
substances.
|
· Data available: bulk density
for all representative rock and ore types; (historic data + 92
measurements in 2016-21 from current core holes); petrographic and
mineralogical studies, hydrological information, hardness, moisture
content, fragmentation etc.
|
|
Further
work
|
·
The nature and
scale of planned further work (eg tests for lateral extensions or
depth extensions or large-scale step-out
drilling).
·
Diagrams clearly
highlighting the areas of possible extensions, including the main
geological interpretations and future drilling areas, provided this
information is not commercially sensitive.
|
· Grade verification sampling
from underground or drilling from surface.
Historically-reported grades require modern validation in order to
improve resource classification.
· The number and location of
sampling sites will be determined from a 3D wireframe model and
geostatistical considerations reflecting grade
continuity.
· The geologic model will be
used to determine if any infill drilling is
required.
· The deposit is open down-dip
on the southern extension, and locally poorly constrained at its
western and eastern extensions, where limited additional drilling
might be required.
· No large-scale drilling
campaigns are required.
|
Section 3 Estimation and Reporting of Mineral
Resources
(Criteria listed in section 1, and
where relevant in section 2, also apply to this
section.)
|
Criteria
|
JORC Code explanation
|
Commentary
|
|
Database
integrity
|
·
Measures taken
to ensure that data has not been corrupted by, for example,
transcription or keying errors, between its initial collection and
its use for Mineral Resource estimation purposes.
·
Data validation
procedures used.
|
· Assay and geologic data were
compiled by Geomet staff from primary historic records, such as
copies of drill logs and large scale sample location
maps.
· Sample data were entered
into Excel spreadsheets by Geomet staff.
· The database entry process
was supervised by a Professional Geologist who works for
Geomet.
· The database was checked by
independent competent persons (Lynn Widenbar of Widenbar &
Associates).
|
|
Site visits
|
·
Comment on any
site visits undertaken by the Competent Person and the outcome of
those visits.
·
If no site
visits have been undertaken indicate why this is the
case.
|
· The site was visited by Dr.
Pavel Reichl who identified the previous shaft sites, tails dams
and observed the mineralisation underground through an adjacent
mine working and was previously the Competent Person for
exploration results.
· The current Competent Person
for exploration results, Dr. Vojtech Sesulka, has visited the site
on multiple occasions and has been involved in 2014 to 2021
drilling campaigns.
· The site was visited in June
2016 by Mr. Lynn Widenbar, the Competent Person for Mineral
Resource Estimation. Diamond drill rigs were viewed, as was core; a
visit was carried out to the adjacent underground mine in Germany
which is a continuation of the Cinovec Deposit.
|
|
Geological
interpretation
|
·
Confidence in
(or conversely, the uncertainty of) the geological interpretation
of the mineral deposit.
·
Nature of the
data used and of any assumptions made.
·
The effect, if
any, of alternative interpretations on Mineral Resource
estimation.
·
The use of
geology in guiding and controlling Mineral Resource
estimation.
·
The factors
affecting continuity both of grade and geology.
|
· The overall geology of the
deposit is relatively simple and well understood due to excellent
data control from surface and underground.
· Nature of data: underground
mapping, structural measurements, detailed core logging, 3D data
synthesis on plans and maps.
· Geological continuity is
good. The grade is highest and shows most variability in
quartz veins.
· Grade correlates with degree
of silicification and greisenisation of the host
granite.
· The primary control is the
granite-country rock contact. All mineralization is in the
uppermost 200m of the granite and is truncated by the
contact.
|
|
Dimensions
|
·
The extent and
variability of the Mineral Resource expressed as length (along
strike or otherwise), plan width, and depth below surface to the
upper and lower limits of the Mineral Resource.
|
· The Cinovec Deposit strikes
north-south, is elongated, and dips gently south parallel to the
upper granite contact. The surface projection of
mineralization is about 1km long and 900m wide.
· Mineralization extends from
about 200m to 500m below surface.
|
|
Estimation and modelling
techniques
|
·
The nature and
appropriateness of the estimation technique(s) applied and key
assumptions, including treatment of extreme grade values,
domaining, interpolation parameters and maximum distance of
extrapolation from data points. If a computer assisted estimation
method was chosen include a description of computer software and
parameters used.
·
The availability
of check estimates, previous estimates and/or mine production
records and whether the Mineral Resource estimate takes appropriate
account of such data.
·
The assumptions
made regarding recovery of by-products.
·
Estimation of
deleterious elements or other non-grade variables of economic
significance (e.g. sulphur for acid mine drainage
characterisation).
·
In the case of
block model interpolation, the block size in relation to the
average sample spacing and the search employed.
·
Any assumptions
behind modelling of selective mining units.
·
Any assumptions
about correlation between variables.
·
Description of
how the geological interpretation was used to control the resource
estimates.
·
Discussion of
basis for using or not using grade cutting or
capping.
·
The process of
validation, the checking process used, the comparison of model data
to drill hole data, and use of reconciliation data if
available.
|
· Block estimation was carried
out in Micromine 2021.5 using Ordinary Kriging
interpolation.
· A geological domain model was
constructed using Leapfrog software with solid wireframes
representing greisen, granite, greisenised granite and the
overlying barren rhyolite. This was used to both control
interpolation and to assign density to the model (2.57 for granite,
2.70 for greisen and 2.60 for all other
material).
· Analysis of sample lengths
indicated that compositing to 1m was necessary.
· Search ellipse sizes and
orientations for the estimation were based on drill hole spacing,
the known orientations of mineralisation and
variography.
· An "unfolding" search
strategy was used which allowed the search ellipse orientation to
vary with the locally changing dip and strike.
· After statistical analysis,
a top cut of 5% was applied to Sn% and W%; a 1.2% top cut is
applied to Li%.
· Sn% and Li% were then
estimated by Ordinary Kriging within the mineralisation
solids.
· The primary search ellipse
was 150m along strike, 150m down dip and 7.5m across the
mineralisation. A minimum of 4 composites and a maximum of 8
composites were required.
· A second interpolation with
search ellipse of 300m x 300m x 12.5m was carried out to inform
blocks to be used as the basis for an exploration
target.
· Block size was 10m (E-W) by
10m (N-S) by 5m
· Validation of the final
resource has been carried out in a number of ways including section
comparison of data versus model, swath plots and production
reconciliation. All methods produced satisfactory
results.
|
|
Moisture
|
·
Whether the
tonnages are estimated on a dry basis or with natural moisture, and
the method of determination of the moisture
content.
|
· Tonnages are estimated on a
dry basis using the average bulk density for each geological
domain.
|
|
Cut-off
parameters
|
·
The basis of the
adopted cut-off grade(s) or quality parameters
applied.
|
· A series of alternative
cutoffs was used to report tonnage and grade: Lithium 0.1%, 0.2%,
0.3% and 0.4%.
· The final reporting cutoff
of 0.1% Li was chosen based on underground mining studies carried
out By Bara Consulting in 2017 while developing an initial Probable
Ore Reserve Estimate.
|
|
Mining factors or
assumptions
|
·
Assumptions made
regarding possible mining methods, minimum mining dimensions and
internal (or, if applicable, external) mining dilution. It is
always necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider potential
mining methods, but the assumptions made regarding mining methods
and parameters when estimating Mineral Resources may not always be
rigorous. Where this is the case, this should be reported with an
explanation of the basis of the mining assumptions
made.
|
· Mining is assumed to be by
underground methods, with fill.
· An updated Preliminary
Feasibility Study prepared in 2019 established that it was feasible
and economic to use large-scale, long-hole sub-level open stope
mining.
· The 2022 updated Preliminary
Feasibility Study establishes that it is feasible and economic to
mine using long hole open stoping with paste
backfill.
· Using a total processing
cost of $41/t and a recovery of 77% of Li grade in ROM ore, a gross
payable value per ROM ore tonne of $96/t ($55/t net margin) has
been assumed before inclusion in the 2022 PFS mine
plan.
|
|
Metallurgical factors or
assumptions
|
·
The basis for
assumptions or predictions regarding metallurgical amenability. It
is always necessary as part of the process of determining
reasonable prospects for eventual economic extraction to consider
potential metallurgical methods, but the assumptions regarding
metallurgical treatment processes and parameters made when
reporting Mineral Resources may not always be rigorous. Where this
is the case, this should be reported with an explanation of the
basis of the metallurgical assumptions made.
|
· Successful locked-cycle tests ("LCTs") carried out in 2022, a
pilot programme carried out in 2023 and further optimisation LCTs
post-pilot programme carried out in 2024 demonstrate the Cinovec
project's ability to produce battery-grade lithium
carbonate.
• European Metals has also demonstrated that
Cinovec battery grade lithium carbonate can be easily converted
into lithium hydroxide monohydrate with a commonly utilised liming
plant process.
• Six LCTs were run in 2022 and the crude lithium
carbonate from LCTs 4, 5 and 6 was successfully converted to
battery grade lithium carbonate.
• Lithium recoveries of up to 93% were achieved in
the LCTs performed.
• The LCTs and the pilot programme tested
zinnwaldite concentrate from the southern part of Cinovec,
representative of the
first five years of
mining.
· The 2023 pilot
programme successfully demonstrated the
hydrometallurgical process flowsheet on a semi-industrial
batch-continuous basis.
· Nine LCTs performed at
Nagrom Laboratories in 2024 successfully demonstrated that the
sodium sulphate roast reagent can be replaced with the mixed
sulphate waste stream. These LCT results were incorporated into the
SysCAD software model, which determined 89.5% overall lithium
recovery for the LCP flowsheet.
· Extensive testwork was
conducted on Cinovec ore in the past. Testing culminated with a
pilot plant trial in 1970, where three batches of Cinovec ore were
processed, each under slightly different conditions. The best
result, with a tin recovery of 76.36%, was obtained from a batch of
97.13t grading 0.32% Sn. A more elaborate flowsheet was also
investigated and with flotation produced final Sn and W recoveries
of better than 96% and 84%, respectively.
· Historical laboratory
testwork also demonstrated that lithium can be extracted from the
ore (lithium carbonate was produced from 1958-1966 at
Cinovec).
|
|
Environmental factors or
assumptions
|
·
Assumptions made
regarding possible waste and process residue disposal options. It
is always necessary as part of the process of determining
reasonable prospects for eventual economic extraction to consider
the potential environmental impacts of the mining and processing
operation. While at this stage the determination of potential
environmental impacts, particularly for a greenfields project, may
not always be well advanced, the status of early consideration of
these potential environmental impacts should be reported. Where
these aspects have not been considered this should be reported with
an explanation of the environmental assumptions
made.
|
· Cinovec is in an area of
historic mining activity spanning the past 600 years. Extensive
State exploration was conducted until 1990.
· The property is located in a
sparsely populated area, most of the land belongs to the State. Few
problems are anticipated with regards to the acquisition of surface
rights for any potential underground mining
operation.
· The envisaged mining method
will see much of the waste and tailings used as underground
fill.
· Waste rock will be disposed
of by re-sale to offtakers in the region.
· Tailings will be disposed of
in a dry-stack facility located at Severočeské doly's (SD) Doly
Nástup Tušimice coal mine near Chomutov.
|
|
Bulk
density
|
·
Whether assumed
or determined. If assumed, the basis for the assumptions. If
determined, the method used, whether wet or dry, the frequency of
the measurements, the nature, size and representativeness of the
samples.
·
The bulk density
for bulk material must have been measured by methods that
adequately account for void spaces (vugs, porosity, etc), moisture
and differences between rock and alteration zones within the
deposit.
·
Discuss
assumptions for bulk density estimates used in the evaluation
process of the different materials.
|
· Historical bulk density
measurements were made in a laboratory.
· The following densities were
applied:
· 2.57 for
granite
· 2.70 for
greisen
· 2.60 for all other
material
|
|
Classification
|
·
The basis for
the classification of the Mineral Resources into varying confidence
categories.
·
Whether
appropriate account has been taken of all relevant factors (i.e.
relative confidence in tonnage/grade estimations, reliability of
input data, confidence in continuity of geology and metal values,
quality, quantity and distribution of the data).
·
Whether the
result appropriately reflects the Competent Person's view of the
deposit.
|
· The new 2014 to 2021
drilling has confirmed the Lithium mineralisation model and allowed
the Mineral Resource to be classified in the Measured, Indicated
and Inferred categories.
· The detailed classification
is based on a combination of drill hole spacing and the output from
the kriging interpolation.
· Measured material is located
in the south of the deposit in the area of new infill drilling
carried out between 2014 and 2021.
· Material outside the
classified area has been used as the basis for an Exploration
Target.
· The Competent Person (Lynn
Widenbar) endorses the final results and
classification.
|
|
Audits or
reviews
|
·
The results of
any audits or reviews of Mineral Resource
estimates.
|
· Wardell Armstrong
International, in their review of Lynn Widenbar's initial resource
estimate stated "the Widenbar model appears to have been prepared
in a diligent manner and given the data available provides a
reasonable estimate of the drillhole assay data at the Cinovec
deposit".
|
|
Discussion of relative
accuracy/ confidence
|
·
Where
appropriate a statement of the relative accuracy and confidence
level in the Mineral Resource estimate using an approach or
procedure deemed appropriate by the Competent Person. For example,
the application of statistical or geostatistical procedures to
quantify the relative accuracy of the resource within stated
confidence limits, or, if such an approach is not deemed
appropriate, a qualitative discussion of the factors that could
affect the relative accuracy and confidence of the
estimate.
·
The statement
should specify whether it relates to global or local estimates,
and, if local, state the relevant tonnages, which should be
relevant to technical and economic evaluation. Documentation should
include assumptions made and the procedures used.
·
These statements
of relative accuracy and confidence of the estimate should be
compared with production data, where available.
|
· In 2012, WAI carried out
model validation exercises on the initial Widenbar model, which
included visual comparison of drilling sample grades and the
estimated block model grades, and Swath plots to assess spatial
local grade variability.
· A visual comparison of Block
model grades vs drillhole grades was carried out on a sectional
basis for both Sn and Li mineralisation. Visually, grades in the
block model correlated well with drillhole grade for both Sn and
Li.
· Swath plots were generated
from the model by averaging composites and blocks in all 3
dimensions using 10m panels. Swath plots were generated for the Sn
and Li estimated grades in the block model, these should exhibit a
close relationship to the composite data upon which the estimation
is based. As the original drillhole composites were not available
to WAI. 1m composite samples based on 0.1% cut-offs for both Sn and
Li assays were
· Overall Swath plots
illustrate a good correlation between the composites and the block
grades. As is visible in the Swath plots, there has been a large
amount of smoothing of the block model grades when compared to the
composite grades, this is typical of the estimation
method.
|
