European Metals Holdings Limited Infill Drilling Commenced (1777G)

TIDMEMH

RNS Number : 1777G

European Metals Holdings Limited

25 May 2017

For immediate release

25 May 2017

EUROPEAN METALS HOLDINGS LIMITED

INFILL DRILLING COMMENCED

European Metals Holdings Limited ("European Metals" or "the Company") (ASX and AIM: EMH), is pleased to announce the commencement of a focused infill drilling program at Cinovec South.

HIGHLIGHTS

 
 
        *    Six core drillholes for a total of 2,800m planned. 
 
        *    Infill drilling in two areas where data density low 
             and 'gaps' in the resource model occur. 
 
        *    Expected to add high grade resource at Cinovec South 
             in critical areas where mining will start. 
 
        *    Results will be utilized during the DFS program to 
             optimize the current mine plan. 
 

European Metals Managing Director Keith Coughlan said, "I am pleased to announce that we have started to drill the first of six drillholes planned at Cinovec South this year. The program will close two gaps in our newest block model, where 'n' blocks were established in the new block model due to paucity of data. Our geologic model suggests that this drilling program will convert the no-class blocks and a good part of the Inferred blocks into Indicated category, which will make them available for mine plan optimization. Based on geologic model, the no-class blocks are mostly in greisen and greisenized granite, which means we can expect higher Li and Sn grades. By adding high quality resource in areas of initial mining the economic model for Cinovec will be further optimised."

GEOLOGY

The most recent block model prepared by Widenbar and Associates for the PFS study contains three classes of resource. In addition to Indicated and Inferred Resource, a so called 'no-class' material is defined in two areas at Cinovec South. This forms 'holes', or 'gaps', within the Inferred resource, and is caused by paucity of analytical data at the increased resolution of the most recent resource model (see Figure 1). The 'no-class' material is located in parts of the deposits where greisen and greisenized granite are well developed, and flanked by high grade Li and Sn resource blocks (see Figure 2). The 2017 drill program, which just started, is designed with the view of converting the 'no-class' material to Indicated category, as well as to convert a great part of the Inferred Resource to the Indicated category, particularly in the eastern part of Cinovec South.

The current PFS mine plan utilises only the Indicated Resource. The conversion of the 'no-class' and Inferred Resource in the immediate vicinity of the current mine plan will allow optimisation of the mine plan, in particular with respect to early years of mining, thus positively impacting the overall cost structure.

(Please refer to the announcement on the European Metals Website for the graphic of Figure 1 - Plan view with projected resource blocks, EMH past and planned drill hole locations - www.europeanmet.com.)

(Please refer to the announcement on the European Metals Website for the graphic of Figure 2 - Section view of planned drillhole, filling a gap in resource blocks - www.europeanmet.com.)

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.

The recently completed Preliminary Feasibility Study, conducted by specialist independent consultants, returned a 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:

 
 "beneficiation"       in extractive metallurgy, is any 
  or "benefication"     process that improves (benefits) 
                        the economic value of the ore by 
                        removing the gangue minerals, which 
                        results in a higher grade product 
                        (concentrate) and a waste stream 
                        (tailings) 
 "carbonate"           refers to a carbonate mineral such 
                        as calcite, CaCO(3) 
 "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 
 "g/t"                 gram per metric tonne 
 "grade"               relative quantity or the percentage 
                        of ore mineral or metal content 
                        in an ore body 
 "Indicated"           as defined in the JORC and SAMREC 
  or "Indicated         Codes, is that part of a Mineral 
  Mineral Resource"     Resource which has been sampled 
                        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 
  "Inferred Mineral     Codes, is that part of a Mineral 
  Resource"             Resource for which the tonnage 
                        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) 
 "Measured" or         Measured: a mineral resource intersected 
  Measured Mineral      and tested by drill holes, underground 
  Resources"            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 
 "metallurgical"       describing the science concerned 
                        with the production, purification 
                        and properties of metals and their 
                        applications 
 "micrometer"          (symbol um) is an SI unit of length 
                        equal to one millionth of a metre 
 "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 
 "P80"                 the mill circuit product size in 
                        micrometers 
 "ppm"                 parts per million 
  "PSD"                 particle size distribution 
 "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 
 "run-of-mine"         mined ore of a size that can be 
                        processed without further crushing 
 "semi-autogenous      a method of grinding rock into 
  grinding" or          fine powder whereby the grinding 
  "SAG"                 media consist of larger chunks 
                        of rocks and steel balls 
 "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 
 "glaserite"     A colourless or white crystalline 
                  compound, K(2) SO(4) , used in 
                  glassmaking and fertilisers and 
                  as a reagent in analytical chemistry 
 "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: [phone] 
  Limited                             333 
  Keith Coughlan, Chief               Email: [e-mail] 
  Executive Officer                   Tel: [phone] 
  Kiran Morzaria, Non-Executive       0647 
  Director                            Tel: [phone] 
  Julia Beckett, Company              Email: [e-mail] 
  Secretary 
 Beaumont Cornish (Nomad            Tel: [phone] 
  & Broker)                          3396 
  Michael Cornish                    Email: [e-mail] 
  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

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May 25, 2017 02:00 ET (06:00 GMT)