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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| European Metals Holdings Limited | LSE:EMH | London | Ordinary Share | VGG3191T1021 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.75 | 4.48% | 17.50 | 17.00 | 18.00 | 17.50 | 16.55 | 16.75 | 461,291 | 09:01:46 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Miscellaneous Metal Ores,nec | 1.12M | -5.93M | -0.0286 | -7.69 | 45.61M |
From Apr 2019 to Apr 2024
TIDMEMH
RNS Number : 3353V
European Metals Holdings Limited
02 November 2017
For immediate release
2 November 2017
EUROPEAN METALS HOLDINGS LIMITED
SIGNIFICANT LITHIUM GRADES AND WIDTHS INTERSECTED
European Metals Holdings Limited ("European Metals" or "the Company") is pleased to announce the successful completion of its six core-hole infill drilling program at the Cinovec Project. A total of 2,697.1m was completed on time and without loss time accidents. Analytical results for three drillholes in the eastern sector and for two drillholes on the western sector of the of the Cinovec South deposit are reported. Results for hole CIS-4 have previously been reported.
Key Points:
Hot Features
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* All six planned infill core drillholes completed for
a total of 2,697.1m drilled.
* Analytical results confirmed the expected lithium,
tin and tungsten contents and mineralization widths.
* The results for the two infill drillholes in the
western part of the Cinovec South deposit exceed
expectations.
* Drillhole CIS-9 returned one of the best results of
the Company's drilling program to date: 204.6m
averaging 0.44% Li2O, (and within it 70m@0.58%Li2O;
13m@0.19%Sn, 6m@0.58%Sn, 3m@1.02%Sn and 0.179%W).
* Drillhole CIS-8 returned a continuous relatively
high-grade lithium mineralization interval that
includes multiple zones of tin and tungsten
mineralization: 152.5m averaging 0.41% Li2O, (and
within it 3m@0.52%Sn, 6m@0.12%Sn and 0.077%W,
7m@0.14%Sn).
* In the eastern part, the best results are from CIS-7,
with 45.5m averaging 0.37% Li2O, and 102m averaging
0.31%Li2O, with strong tin and tungsten credits
(11m@0.24%Sn and second interval includes 12m@0.17%Sn
and 13m@0.16%W).
European Metals CEO Keith Coughlan said "We are very pleased that not only have we competed the planned drilling program on time and within budget, but that the results are excellent, in particular with respect to the two infill drillholes on the western part of the Cinovec South deposit. These drillholes intersected strong lithium mineralization with significant tin and tungsten contents. The results from this drilling will allow the Company to convert additional resources to the Indicated status and further optimize the Cinovec South mine plan. The geological and resource model upgrade is now underway."
Drill Program
The completed six hole drill program at Cinovec South was planned to focus on infill drilling in two areas where data density is low and 'gaps' in the resource model occur. Other goals are expectation of adding high grade resource at Cinovec South in critical areas where mining will start, the addition of resources in unclassified areas, the conversion of resources from Inferred to Indicated category, and delivery of material for metallurgical testing. All six planned diamond core holes have been completed. The fifth hole CIS-8 had to be terminated at 426.2m due to technical causes.
The drill hole information is listed in Table 1 below, and their locations are shown on Figure 1 below:
Table 1 - Completed drillholes, Cinovec South
Hole North East Elevation Depth Azimuth Dip Comments
ID (m) (m)
------- ------------- ------------- ---------- ------ -------- ------- -----------
Infill,
CIS-4 -966605.9(1) -778582.9(1) 863 448 16.6 -84.6 completed
------- ------------- ------------- ---------- ------ -------- ------- -----------
Infill,
CIS-5 -966607.8(1) -778585.1(1) 862.8 458.8 271.8 -81.28 completed
------- ------------- ------------- ---------- ------ -------- ------- -----------
Infill,
CIS-6 -966516.0(1) -778544.1(1) 866.2 456 28.8 -86.97 completed
------- ------------- ------------- ---------- ------ -------- ------- -----------
Infill,
CIS-7 -966454.0(1) -778655.3(1) 864.4 450.3 223.9 -89.76 completed
------- ------------- ------------- ---------- ------ -------- ------- -----------
Infill,
CIS-8 -966570.0(2) -779163.0(2) 805 426.2 347.6 -69.69 completed
------- ------------- ------------- ---------- ------ -------- ------- -----------
Infill,
CIS-9 -966570.0(2) -779163.0(2) 805 457.8 37.20 -61.18 completed
------- ------------- ------------- ---------- ------ -------- ------- -----------
Hole locations are recorded in the local S-JTSK Krovak grid, (1) Coordinates surveyed (2)
(Please refer to the announcement on the European Metals Website for Figure 1 - Plan view with projected resource blocks, EMH completed drill holes - www.europeanmet.com.)
After geological logging, drill core is cut in half with a diamond saw. Quarter core samples are selected (honouring geological boundaries) and dispatched to ALS (Romania) for preparation and assay; the 3/4 of the core is returned to the core box and stored securely on site. Samples are being prepared and analysed by ALS using ICP and XRF techniques following standard industry practice for lithium and tin deposits. Strict QAQC protocols are observed, including the insertion of a Li standard in random fashion for every 10 core samples.
Mineralized Intercepts and Lithology
The three reported drillholes in the eastern part are collared in the overlying rhyolite of the Cinovec South deposit. The Li-mineralized greisen and greisenised granite start immediately bellow the rhyolite/granite contact at a depth of 256.7m (CIS-5), 295m (CIS-6) and 228.7m (CIS-7).
Based on observations from core and analytical results, the lithium mineralization in the eastern part of Cinovec South is broadly correlated with greisenisation of granite, forming two zones. In drillholes CIS-5 and CIS-6, the upper zone is about 130m wide, and the lower about 45m wide, while in drillhole CIS-7 the relationship is opposite, with the lower zone wide about 102m. The greisenisation interval in this drillhole can be also interpreted as a single one, with the two zones merging at the eastern edge of the deposit. The mineralization in the eastern part of Cinovec South is characteristic by relatively strong enrichment in Sn and W, starting immediately at the rhyolite-granite contact and sharply terminating at about 51 to 111m below the contact. If no Sn cutoff is applied, the anomalous interval grades are: 107.3m@0.06% Sn (CIS-5), 51m@0.05% Sn (CIS-6) and 111.3m@0.07% Sn (CIS-7). This interval includes economic grades in relatively long intervals (see Tables below), and while the best grades are generally related to greisen alteration, they can be also related to albite granite.
The bottom of the lithium mineralization is marked by a sharp decrease of zinnwaldite and the presence of the so-called low-mica granite.
The greisens are more abundant in the upper part of the lithium enriched zones. The major mineralized intercepts are 130.3m@0.3% Li(2) O (CIS-5), 83m@0.28% Li(2) O (CIS-6) and 102m@0.31% Li(2) O (CIS-7). The intervals were calculated at a 0.2% Li(2) O cutoff, with maximum internal waste (marginally below the cutoff grade) of 4m.
The Tables below provide summary of the results. According to the geological and block model the greisen bodies (and the mineralized zones) dip shallowly to the south, although this fact could not be fully confirmed by core angles observations in the core. The three drillholes were drilled with dip -81.28 (CIS-5), -86.97 (CIS-6) and -89.76 (CIS-7), so the reported intercepts appear close to true thicknesses.
Table 2 Mineralised intercepts in CIS-5
CIS-5
-------------------------------------------------------------------------------
From To Interval Li(2) Sn W (%) Note
(m) O (%) (%)
------ ------ --------- ------- ----- ------ ----------------------------
incl. 3.0m@0.45%Li(2)
O (341-344m) and
0.6m@1.2%Li(2) O
265.7 396 130.3 0.30 0.05 0.005 (371.5-372.1m)
------ ------ --------- ------- ----- ------ ----------------------------
274 279 5 0.35 0.11 0.001
------ ------ --------- ------- ----- ------ ----------------------------
284 285 1 0.25 0.11 0.007
------ ------ --------- ------- ----- ------ ----------------------------
incl. 2.0m@0.27%Sn
(305-306m) and 1.0m@0.07%W
299 314 15 0.28 0.13 0.015 (306-307m)
------ ------ --------- ------- ----- ------ ----------------------------
329 331 2 0.28 0.10 0.002
------ ------ --------- ------- ----- ------ ----------------------------
340 341 1 0.32 0.11 0.001
------ ------ --------- ------- ----- ------ ----------------------------
368 369.5 1.5 0.32 0.14 0.001
------ ------ --------- ------- ----- ------ ----------------------------
incl. 15.0m@0.41%Li(2)
405.5 446 40.5 0.30 0.00 0.001 O (415-430m)
------ ------ --------- ------- ----- ------ ----------------------------
Table 3 Mineralised intercepts in CIS-6
CIS-6
--------------------------------------------------------------------------
From To Interval Li(2) Sn W (%) Note
(m) O (%) (%)
------ ------ --------- ------- ----- ------ -----------------------
incl. 11.4m@0.42%Li(2)
O (299-310.4m) and
7.0m@0.37%Li(2) O
295 378 83 0.28 0.03 0.010 (359-366m)
------ ------ --------- ------- ----- ------ -----------------------
299 304 5 0.45 0.13 0.058
------ ------ --------- ------- ----- ------ -----------------------
299.8 302.8 3 0.58 0.10 0.095
------ ------ --------- ------- ----- ------ -----------------------
320 321 1 0.29 0.18 0.041
------ ------ --------- ------- ----- ------ -----------------------
383 418 35 0.30 0.00 0.001
------ ------ --------- ------- ----- ------ -----------------------
Table 4 Mineralised intercepts in CIS-7
CIS-7
------------------------------------------------------------------------------
From To Interval Li(2) Sn W (%) Note
(m) O (%) (%)
------ ------ --------- ------- ----- ------ ---------------------------
245 252 7 0.25 0.03 0.001
------ ------ --------- ------- ----- ------ ---------------------------
incl. 15m@0.54%Li(2)
O (271-286m) and
4m@0.78%Li(2) O
266 311.5 45.5 0.37 0.11 0.019 (281-285m)
------ ------ --------- ------- ----- ------ ---------------------------
incl. 3m@0.58%Sn
271 282 11 0.50 0.24 0.003 (271-274m)
------ ------ --------- ------- ----- ------ ---------------------------
272 273 1 0.64 0.89 0.054
------ ------ --------- ------- ----- ------ ---------------------------
281 282 1 0.94 0.25 0.101
------ ------ --------- ------- ----- ------ ---------------------------
289 294 5 0.36 0.17 0.002
------ ------ --------- ------- ----- ------ ---------------------------
301 302 1 0.26 0.14 0.001
------ ------ --------- ------- ----- ------ ---------------------------
310.5 311.5 1 0.66 0.01 0.483
------ ------ --------- ------- ----- ------ ---------------------------
incl. 4m@0.42%Li(2)
O (370-374m),
6m@0.49%Li(2) O
(387-393m) and
319 421 102 0.31 0.03 0.013 4m@0.41%Li2O (407-411m)
------ ------ --------- ------- ----- ------ ---------------------------
324 337 13 0.28 0.16 0.085 incl. 4m@0.16%W (325-329m)
------ ------ --------- ------- ----- ------ ---------------------------
In the western part of the Cinovec South deposit, the drillholes CIS-8 and CIS-9 were collared in the overlying rhyolite at the western segment of the Cinovec South deposit. In CIS-8 the contact between the rhyolite and granite, marked by a 30cm wide pegmatite, was intersected at 154.2m depth of the drill string. From 154.2m to 230.85 m, mostly albite granite, with zones of hematite and greisenized granite, was intercepted. From 230.85m, the greisen style alteration increases and the interval 154.2m to 398m is formed by greisenized granite, locally including zones of greisen. This lithologic interval is broadly coincident with the strongest lithium, tin and tungsten mineralization, with the latter two spatially correlated to strongest greisen-style alteration. A mixed zone of albite granite and greisenised granite comprises the bottom of the drillhole, from 398m to EOH at 426.2m. The lithologies in CIS-9 are similar: rhyolite contact at 136m depth of drill string, albite granite, locally hematised, from 136 to 234, at 234 m onset of greisen-style mineralization to a depth of 437.6m (greisenised granite, locally greisen zone). Albite granite is prevalent in the bottom of the drillhole, from 438 to T.D. at 457.8m.
The mineralized intercept in CIS-8 of 197.2m@0.37 Li(2) O can be subdivided into two segments. The upper one, 152.5m@0.41% Li(2) O and tin/tungsten enrichment, is broadly coincident with higher degree of greisen-style alteration, whereas the lower part, with abundant albite granite, is of lower lithium grade and no appreciable tin ad tungsten (39.7m@0.25%Li(2) O).
In CIS-9 the lithium mineralised interval 204.6m@0.44%Li(2) O is also spatially related to greisen-style alteration of the host granite. The interval contains two higher lithium grade segments and several tin and tungsten discrete zones that are not always directly correlated with the degree of greisenisation, as is the case with lithium.
Table 5 Mineralised intercepts in CIS-8
CIS-8
---------------------------------------------------------------------------------
From To Interval Li(2) Sn W (%) Note
(m) O (%) (%)
----- ------ --------- ------- ----- ------ -------------------------------
incl. 152.5m@0.41%Li2O,
0.05%Sn, 0.01%W (234-286.6m);
3.7m@0.74%Li(2) O
(246-249.7m), 24m@0.52%Li(2)
O (299-323m), 2m@0.66%Li(2)
O (361-363m) and
229 426.2 197.2 0.37 0.04 0.008 2m@1.37Li(2) O (384.5-386.5m)
----- ------ --------- ------- ----- ------ -------------------------------
incl. 1m@1.35%Sn
234 237 3 0.51 0.52 0.045 (236-237m)
----- ------ --------- ------- ----- ------ -------------------------------
236 237 1 0.74 1.35 0.119
----- ------ --------- ------- ----- ------ -------------------------------
246 252 6 0.62 0.12 0.077
----- ------ --------- ------- ----- ------ -------------------------------
249 256 7 0.47 0.14 0.048
----- ------ --------- ------- ----- ------ -------------------------------
267 269 2 0.45 0.33 0.043
----- ------ --------- ------- ----- ------ -------------------------------
268 269 1 0.38 0.10 0.074
----- ------ --------- ------- ----- ------ -------------------------------
incl. 1m@1.03%Sn
279 284 5 0.40 0.60 0.085 (279-280m)
----- ------ --------- ------- ----- ------ -------------------------------
Cut-off: 0.2%Li(2) O, 0.1%Sn, 0.05%W
---------------------------------------------------------------------------------
Table 6 Mineralised intercepts in CIS-9
CIS-9
-----------------------------------------------------------------------
From To Interval Li(2) Sn W (%) Note
(m) O (%) (%)
----- ------ --------- ------- ----- ------ ---------------------
incl. 15m@0.64%Li(2)
O (235-250m) and
70m@0.58%Li(2) O
233 437.6 204.6 0.44 0.04 0.009 (270-340m)
----- ------ --------- ------- ----- ------ ---------------------
241 254 13 0.62 0.19 0.025
----- ------ --------- ------- ----- ------ ---------------------
incl. 3m@1.02%Sn
266 272 6 0.43 0.58 0.107 (268-271m)
----- ------ --------- ------- ----- ------ ---------------------
268 271 3 0.46 1.02 0.179
----- ------ --------- ------- ----- ------ ---------------------
279 284 5 0.62 0.11 0.008
----- ------ --------- ------- ----- ------ ---------------------
285 287 2 0.62 0.03 0.077
----- ------ --------- ------- ----- ------ ---------------------
Cut-off: 0.2%Li(2) O, 0.1%Sn, 0.05%W
-----------------------------------------------------------------------
As required under the 2012 JORC Code, details of the current drill program are appended (Table 1).
CZECH ELECTION RESULTS
The Company notes the results of the recent elections held in the Czech Republic and the debate regarding development of lithium assets within the country leading into the elections. As the sole holder of exploration permits and preliminary mining permits with the preferential right of mining over the Cinovec Project, the Company looks forward to continuing the previous positive engagements with the new Government, once formed, and to rapidly advance development of the project to the mutual benefit of all stakeholders.
BACKGROUND INFORMATION ON CINOVEC
PROJECT OVERVIEW
Cinovec Lithium/Tin Project
European Metals, through its wholly owned Subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. 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. An initial Probable Ore Reserve of 34.5Mt @ 0.65% Li2O and 0.09% Sn has been declared to cover the first 20 years mining at an output of 20,800tpa of lithium carbonate.
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 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
indices" of the energy 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
separation" minerals have 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
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)
"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 3500 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.
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, * In 2014, the Company commenced a core drilling
random chips, or specific specialised industry program and collected samples from core splits in
standard measurement tools appropriate to the line with JORC Code guidelines.
minerals under investigation, such as down hole gamma
sondes, or handheld XRF instruments, etc). These
examples should not be taken as limiting the broad * Sample intervals honour geological or visible
meaning of sampling. mineralization boundaries and vary between 50cm and 2
m. Majority of samples is 1 m in length
* Include reference to measures taken to ensure sample
representivity and the appropriate calibration of any * The samples are half or quarter of core; the latter
measurement tools or systems used. applied for large diameter core.
* Aspects of the determination of mineralisation that * Between 1952 and 1989, the Cinovec deposit was
are Material to the Public Report. sampled in two ways: in drill core and underground
channel samples.
* In cases where 'industry standard' work has been done
this would be relatively simple (eg 'reverse * Channel samples, from drift ribs and faces, were
circulation drilling was used to obtain 1 m samples collected during detailed exploration between 1952
from which 3 kg was pulverised to produce a 30 g and 1989 by Geoindustria n.p. and Rudne Doly n.p.,
charge for fire assay'). In other cases more both Czechoslovak State companies. Sample length was
explanation may be required, such as where there is 1 m, channel 10x5cm, sample mass about 15kg. Up to
coarse gold that has inherent sampling problems. 1966, samples were collected using hammer and chisel;
Unusual commodities or mineralisation types (eg from 1966 a small drill (Holman Hammer) was used.
submarine nodules) may warrant disclosure of detailed 14179 samples were collected and transported to a
information. 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 * In 2014, three core holes were drilled for a total of
hammer, rotary air blast, auger, Bangka, sonic, etc) 940.1m. In 2015, six core holes were drilled for a
and details (eg core diameter, triple or standard total of 2,455.0m. In 2016, eight core holes were
tube, depth of diamond tails, face-sampling bit or drilled for a total of 2,795.6m.
other type, whether core is oriented and if so, by
what method, etc).
* 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%). In 2016 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: 80 holes, total 30,340 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 * Core recovery for historical surface drill holes was
sample recoveries and results assessed. recorded on drill logs and entered into the database.
* Measures taken to maximise sample recovery and ensure * No correlation between grade and core recovery was
representative nature of the samples. established.
* 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.
Logging
* Whether core and chip samples have been geologically * In 2014-2016, core descriptions were recorded into
and geotechnically logged to a level of detail to paper logging forms by hand and later entered into an
support appropriate Mineral Resource estimation, Excel database.
mining studies and metallurgical studies.
* Core was logged in detail historically in a facility
* Whether logging is qualitative or quantitative in 6 km from the mine site. The following features were
nature. Core (or costean, channel, etc) photography. logged and recorded in paper logs: lithology,
alteration (including intensity divided into weak,
medium and strong/pervasive), and occurrence of ore
* The total length and percentage of the relevant minerals expressed in %, macroscopic description of
intersections logged. congruous intervals and structures and core recovery.
Sub-sampling
techniques * If core, whether cut or sawn and whether quarter, * In 2014-16, core was washed, geologically logged,
and sample half or all core taken. sample intervals determined and marked then the core
preparation was cut in half. In 2016 larger core was cut in half
and one half was cut again to obtain a quarter core
* If non-core, whether riffled, tube sampled, rotary sample. One half or one quarter samples was delivered
split, etc and whether sampled wet or dry. 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.
* For all sample types, the nature, quality and
appropriateness of the sample preparation technique.
* Sample preparation was carried out by ALS Global in
Romania, using industry standard techniques
* Quality control procedures adopted for all appropriate for the style of mineralisation
sub-sampling stages to maximise representivity of represented at Cinovec.
samples.
* Historically, core was either split or consumed
* Measures taken to ensure that the sampling is entirely for analyses.
representative of the in situ material collected,
including for instance results for field
duplicate/second-half sampling. * Samples are considered to be representative.
* Whether sample sizes are appropriate to the grain * Sample size and grains size are deemed appropriate
size of the material being sampled. for the analytical techniques used.
Quality of
assay data * The nature, quality and appropriateness of the * In 2014-16, core samples were assayed by ALS Global.
and assaying and laboratory procedures used and whether The most appropriate analytical methods were
laboratory the technique is considered partial or total. determined by results of tests for various analytical
tests techniques.
* For geophysical tools, spectrometers, handheld XRF
instruments, etc, the parameters used in determining * The following analytical methods were chosen: ME-MS81
the analysis including instrument make and model, (lithium borate fusion or 4 acid digest, ICP-MS
reading times, calibrations factors applied and their finish) for a suite of elements including Sn and W
derivation, etc. and ME-4ACD81 (4 acid digest, ICP-AES finish)
additional elements including lithium.
* Nature of quality control procedures adopted (eg
standards, blanks, duplicates, external laboratory * About 40% of samples were analysed by ME-MS81d
checks) and whether acceptable levels of accuracy (ie (ME-MS81 plus whole rock package). Samples with over
lack of bias) and precision have been established. 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, tin 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 * The verification of significant intersections by * During the 2014-16 drill campaigns the Company
and assaying either independent or alternative company personnel. indirectly verified grades of tin and lithium by
comparing the length and grade of mineral intercepts
with the current block model.
* 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.
Location of
data points * Accuracy and quality of surveys used to locate drill * In 2014-16, drill collar locations were surveyed by a
holes (collar and down-hole surveys), trenches, mine registered surveyor.
workings and other locations used in Mineral Resource
estimation.
* Down hole surveys were recorded by a contractor.
* Specification of the grid system used.
* Historically, drill hole collars were surveyed with a
great degree of precision by the mine survey crew.
* Quality and adequacy of topographic control.
* Hole locations are recorded in the local S-JTSK
Krovak grid.
* Topographic control is excellent.
Data spacing
and * Data spacing for reporting of Exploration Results. * Historical data density is very high.
distribution
* Whether the data spacing and distribution is * Spacing is sufficient to establish an inferred
sufficient to establish the degree of geological and resource that was initially estimated using MICROMINE
grade continuity appropriate for the Mineral Resource software in Perth, 2012.
and Ore Reserve estimation procedure(s) and
classifications applied.
* Areas with lower coverage of Li% assays have been
identified as exploration targets.
* Whether sample compositing has been applied.
* Sample compositing to 1m intervals has been applied
mathematically prior to estimation but not
physically.
Orientation
of data in * Whether the orientation of sampling achieves unbiased * In 2014-16, drill hole azimuth and dip was planned to
relation to sampling of possible structures and the extent to intercept the mineralized zones at near-true
geological which this is known, considering the deposit type. thickness. As the mineralized zones dip shallowly to
structure the south, drill holes were vertical or near vertical
and directed to the north. Due to land access
* If the relationship between the drilling orientation restrictions, certain holes could not be positioned
and the orientation of key mineralised structures is in sites with ideal drill angle.
considered to have introduced a sampling bias, this
should be assessed and reported if material.
* The Company 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 2014-16 programs, only the Company'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 Company premises where it was logged and cut.
Company geologists supervised the process and
logged/sampled the core. The samples were transported
by Company 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 * Review of sampling techniques possible from written
techniques and data. records. No flaws found.
============= ============================================================ ============================================================
Section 2 Reporting of Exploration Results
Criteria JORC Code explanation Commentary
Mineral
tenement and * Type, reference name/number, location and ownership * Cinovec exploration rights held under three licenses
land tenure including agreements or material issues with third Cinovec (expires 30/07/2019), Cinovec 2 (expires
status parties such as joint ventures, partnerships, 31/12/2020) and Cinovec 3 (expires 31/10/2021).100%
overriding royalties, native title interests, owned, no native interests or environmental concerns.
historical sites, wilderness or national park and A State royalty applies metals production and is set
environmental settings. as a fee in Czech crowns per unit of metal produced.
* The security of the tenure held at the time of * There are no known impediments to obtaining an
reporting along with any known impediments to Exploitation Permit for the defined resource.
obtaining a licence to operate in the area.
Exploration
done by other * Acknowledgment and appraisal of exploration by other * There has been no acknowledgment or appraisal of
parties parties. exploration by other parties.
Geology
* Deposit type, geological setting and style of * Cinovec is a granite-hosted tin-tungsten-lithium
mineralisation. deposit.
* Late Variscan age, post-orogenic granite intrusionTin
and tungsten occur in oxide minerals (cassiterite and
wolframite). Lithium occurs in zinwaldite, a Li-rich
muscovite
* Mineralization in a small granite cupola. Vein and
greisen type. Alteration is greisenisation,
silicification.
Drill hole * Reported previously.
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.
Data
aggregation * In reporting Exploration Results, weighting averaging * Reporting of exploration results has not and will not
methods techniques, maximum and/or minimum grade truncations include aggregate intercepts.
(eg cutting of high grades) and cut-off grades are
usually Material and should be stated.
* Metal equivalent not used in reporting.
* Where aggregate intercepts incorporate short lengths
of high grade results and longer lengths of low grade * No grade truncations applied.
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.
Relationship
between * These relationships are particularly important in the * Intercept widths are approximate true widths.
mineralisation reporting of Exploration Results.
widths and
intercept * The mineralization is mostly of disseminated nature
lengths * If the geometry of the mineralisation with respect to and relatively homogeneous; the orientation of
the drill hole angle is known, its nature should be samples is of limited impact.
reported.
* For higher grade veins care was taken to drill at
* If it is not known and only the down hole lengths are angles ensuring closeness of intercept length and
reported, there should be a clear statement to this true widths
effect (eg 'down hole length, true width not known').
* The block model accounts for variations between
apparent and true dip.
Diagrams
* Appropriate maps and sections (with scales) and * Appropriate maps and sections have been generated by
tabulations of intercepts should be included for any the Company, and independent consultants. Available
significant discovery being reported These should in customary vector and raster outputs, and partially
include, but not be limited to a plan view of drill in consultant's reports.
hole collar locations and appropriate sectional
views.
Balanced
reporting * Where comprehensive reporting of all Exploration * Balanced reporting in historic reports guaranteed by
Results is not practicable, representative reporting norms and standards, verified in 1997, and 2012 by
of both low and high grades and/or widths should be independent consultants.
practiced to avoid misleading reporting of
Exploration Results.
* The historic reporting was completed by several State
institutions and cross validated.
Other
substantive * Other exploration data, if meaningful and material, * Data available: bulk density for all representative
exploration should be reported including (but not limited to): rock and ore types; (historic data + 92 measurements
data geological observations; geophysical survey results; in 2016 from current core holes); petrographic and
geochemical survey results; bulk samples - size and mineralogical studies, hydrological information,
method of treatment; metallurgical test results; bulk hardness, moisture content, fragmentation etc.
density, groundwater, geotechnical and rock
characteristics; potential deleterious or
contaminating substances.
Further work
* The nature and scale of planned further work (eg * Grade verification sampling from underground or
tests for lateral extensions or depth extensions or drilling from surface. Historically-reported grades
large-scale step-out drilling). require modern validation in order to improve the
resource classification.
* Diagrams clearly highlighting the areas of possible
extensions, including the main geological * The number and location of sampling sites will be
interpretations and future drilling areas, provided determined from a 3D wireframe model and
this information is not commercially sensitive. 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 JORC Code explanation Commentary
Database
integrity * Measures taken to ensure that data has not been * Assay and geologic data were compiled by the Company
corrupted by, for example, transcription or keying staff from primary historic records, such as copies
errors, between its initial collection and its use of drill logs and large scale sample location maps.
for Mineral Resource estimation purposes.
* Sample data were entered in to Excel spreadsheets by
* Data validation procedures used. Company staff in Prague.
* The database entry process was supervised by a
Professional Geologist who works for the Company.
* The database was checked by independent competent
persons (Lynn Widenbar of Widenbar & Associates, Phil
Newell of Wardell Armstrong International).
Site visits
* Comment on any site visits undertaken by the * The site was visited by Mr Pavel Reichl who has
Competent Person and the outcome of those visits. identified the previous shaft sites, tails dams and
observed the mineralisation underground through an
adjacent mine working.
* If no site visits have been undertaken indicate why
this is the case.
* 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 * The overall geology of the deposit is relatively
geological interpretation of the mineral deposit. simple and well understood due to excellent data
control from surface and underground.
* Nature of the data used and of any assumptions made.
* Nature of data: underground mapping, structural
measurements, detailed core logging, 3D data
* The effect, if any, of alternative interpretations on synthesis on plans and maps.
Mineral Resource estimation.
* Geological continuity is good. The grade is highest
* The use of geology in guiding and controlling Mineral and shows most variability in quartz veins.
Resource estimation.
* Grade correlates with degree of silicification and
* The factors affecting continuity both of grade and greisenisation of the host granite.
geology.
* 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 * The Cinovec South deposit strikes north-south, is
expressed as length (along strike or otherwise), plan elongated, and dips gently south parallel to the
width, and depth below surface to the upper and lower upper granite contact. The surface projection of
limits of the Mineral Resource. mineralization is about 1 km long and 900 m wide.
* Mineralization extends from about 200m to 500m below
surface.
Estimation and
modelling * The nature and appropriateness of the estimation * Block estimation was carried out in Micromine using
techniques technique(s) applied and key assumptions, including Ordinary Kriging interpolation.
treatment of extreme grade values, domaining,
interpolation parameters and maximum distance of
extrapolation from data points. If a computer * A geological domain model was constructed using
assisted estimation method was chosen include a Leapfrog software with solid wireframes representing
description of computer software and parameters used. greisen, granite, greisenised granite and the
overlying barren rhyolite. This was used to both
control interpolation and to assign density to the
* The availability of check estimates, previous model (2.57 for granite, 2.70 for greisen and 2.60
estimates and/or mine production records and whether for all other material).
the Mineral Resource estimate takes appropriate
account of such data.
* Analysis of sample lengths indicated that compositing
to 1m was necessary.
* The assumptions made regarding recovery of
by-products.
* Search ellipse sizes and orientations for the
estimation were based on drill hole spacing, the
* Estimation of deleterious elements or other non-grade known orientations of mineralisation and variography.
variables of economic significance (eg sulphur for
acid mine drainage characterisation).
* An "unfolding" search strategy was used which allowed
the search ellipse orientation to vary with the
* In the case of block model interpolation, the block locally changing dip and strike.
size in relation to the average sample spacing and
the search employed.
* After statistical analysis, a top cut of 5% was
applied to Sn% and W%; no top cut is applied to Li%.
* Any assumptions behind modelling of selective mining
units.
* Sn% and Li% were then estimated by Ordinary Kriging
within the mineralisation solids.
* Any assumptions about correlation between variables.
* The primary search ellipse was 150m along strike,
* Description of how the geological interpretation was 150m down dip and 7.5m across the mineralisation. A
used to control the resource estimates. minimum of 4 composites and a maximum of 8 composites
were required.
* Discussion of basis for using or not using grade
cutting or capping. * 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.
* 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 size was 5m (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, swathe plots and production
reconciliation.
Moisture
* Whether the tonnages are estimated on a dry basis or * Tonnages are estimated on a dry basis using the
with natural moisture, and the method of average bulk density for each geological domain.
determination of the moisture content.
Cut-off
parameters * The basis of the adopted cut-off grade(s) or quality * A series of alternative cutoffs was used to report
parameters applied. tonnage and grade: Sn 0.1%, 0.2%, 0.3% and 0.4%.
Lithium 0.1%, 0.2%, 0.3% and 0.4%.
Mining factors
or assumptions * Assumptions made regarding possible mining methods, * Mining is assumed to be by underground methods. A
minimum mining dimensions and internal (or, if Scoping Study has determined the optimal mining
applicable, external) mining dilution. It is always method.
necessary as part of the process of determining
reasonable prospects for eventual economic extraction
to consider potential mining methods, but the * Limited internal waste will need to be mined at
assumptions made regarding mining methods and grades marginally below cutoffs. Mine dilution and
parameters when estimating Mineral Resources may not waste are expected at minimal levels and the vast
always be rigorous. Where this is the case, this majority of the Mineral Resource is expected to
should be reported with an explanation of the basis convert to an Ore Reserve.
of the mining assumptions made.
* Based on the geometry of the deposit, it is envisaged
that a combination of drift and fill mining and
longhole open stoping will be used.
Metallurgical
factors or * The basis for assumptions or predictions regarding * Recent testwork on 2014 drill core indicates a tin
assumptions metallurgical amenability. It is always necessary as recovery of 80% can be expected.
part of the process of determining reasonable
prospects for eventual economic extraction to
consider potential metallurgical methods, but the * Testwork on lithium is complete, with 70% recovery of
assumptions regarding metallurgical treatment lithium to lithium carbonate product via flotation
processes and parameters made when reporting Mineral concentrate and atmospheric leach.
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. * Extensive testwork was conducted on Cinovec South ore
in the past. Testing culminated with a pilot plant
trial in 1970, where three batches of Cinovec South
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 demonstrated that
lithium can be extracted from the ore (lithium
carbonate was produced from 1958-1966 at Cinovec).
Environmental
factors or * Assumptions made regarding possible waste and process * Cinovec is in an area of historic mining activity
assumptions residue disposal options. It is always necessary as spanning the past 600 years. Extensive State
part of the process of determining reasonable exploration was conducted until 1990.
prospects for eventual economic extraction to
consider the potential environmental impacts of the
mining and processing operation. While at this stage * The property is located in a sparsely populated area,
the determination of potential environmental impacts, most of the land belongs to the State. Few problems
particularly for a greenfields project, may not are anticipated with regards to the acquisition of
always be well advanced, the status of early surface rights for any potential underground mining
consideration of these potential environmental operation.
impacts should be reported. Where these aspects have
not been considered this should be reported with an
explanation of the environmental assumptions made. * The envisaged mining method will see much of the
waste and tailings used as underground fill.
Bulk density
* Whether assumed or determined. If assumed, the basis * Historical bulk density measurements were made in a
for the assumptions. If determined, the method used, laboratory.
whether wet or dry, the frequency of the measurements
,
the nature, size and representativeness of the * The following densities were applied:
samples.
o 2.57 for granite
* The bulk density for bulk material must have been o 2.70 for greisen
measured by methods that adequately account for void o 2.60 for all other
spaces (vugs, porosity, etc), moisture and material
differences between rock and alteration zones within
the deposit.
* Discuss assumptions for bulk density estimates used
in the evaluation process of the different materials.
Classification
* The basis for the classification of the Mineral * Following a review of a small amount of available
Resources into varying confidence categories. QAQC data, and comparison of production data versus
estimated tonnage/grade from the resource model, and
given the close spacing of underground drilling and
* Whether appropriate account has been taken of all development, the majority of the Tin resource was
relevant factors (ie relative confidence in originally classified in the Inferred category as
tonnage/grade estimations, reliability of input data, defined by the 2012 edition of the JORC code.
confidence in continuity of geology and metal values,
quality, quantity and distribution of the data).
* The new 2014 and 2016 drilling has confirmed the Tin
mineralisation model and a part of this area has been
* Whether the result appropriately reflects the upgraded to the Indicated category.
Competent Person's view of the deposit.
* The Li% mineralisation has been assigned to the
Inferred category where the average distance to
composites used in estimation is less than 100m.
Material outside this range is unclassified but has
been used as the basis for an Exploration Target.
* The new 2014 and 2016 drilling has confirmed the
Lithium mineralisation model and a part of this area
has been upgraded to the Indicated category.
* The Competent Person (Lynn Widenbar) endorses the
final results and classification.
Audits or
reviews * The results of any audits or reviews of Mineral * Wardell Armstrong International, in their review of
Resource estimates. 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 * Where appropriate a statement of the relative * In 2012, WAI carried out model validation exercises
accuracy/ accuracy and confidence level in the Mineral Resource on the initial Widenbar model, which included visual
confidence estimate using an approach or procedure deemed comparison of drilling sample grades and the
appropriate by the Competent Person. For example, the estimated block model grades, and Swath plots to
application of statistical or geostatistical assess spatial local grade variability.
procedures to quantify the relative accuracy of the
resource within stated confidence limits, or, if such
an approach is not deemed appropriate, a qualitative * A visual comparison of Block model grades vs
discussion of the factors that could affect the drillhole grades was carried out on a sectional basis
relative accuracy and confidence of the estimate. for both Sn and Li mineralisation. Visually, grades
in the block model correlated well with drillhole
grade for both Sn and Li.
* The statement should specify whether it relates to
global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to * Swathe plots were generated from the model by
technical and economic evaluation. Documentation averaging composites and blocks in all 3 dimensions
should include assumptions made and the procedures using 10m panels. Swath plots were generated for the
used. 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
* These statements of relative accuracy and confidence original drillhole composites were not available to
of the estimate should be compared with production WAI. 1m composite samples based on 0.1% cut-offs for
data, where available. both Sn and Li assays were
* Overall Swathe plots illustrate a good correlation
between the composites and the block grades. As is
visible in the Swathe 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.
=============== ============================================================ =====================================================================
ORE as at 1(ST) JUNE 2017
Section 4 Estimation and Reporting of Ore Reserves
(Criteria listed in section 1, and where relevant in section 2 and 3, also apply to this section.)
Criteria JORC Code explanation Commentary
============================================================
Mineral A JORC 2012 Mineral
Resource * Description of the Mineral Resource estimate used as Resource Estimate (MRE)
estimate a basis for the conversion to an Ore Reserve. was issued by Widenbar
for conversion and Associates. The
to Ore electronic resource
reserves * Clear statement as to whether the Mineral Resources models were provided
are reported additional to, or inclusive of, the Ore to Bara for the purposes
Reserves. of mine design.
The table below summarises
the mineral resource
provided.
CINOVEC 2017 RESOURCE
---------------------------------------------------------------
Li(2)
Cutoff Tonnes Li O Sn W
----------- ------- ----------- ----- ------ ----- ------
% (Millions) % % % %
----------- ------- ----------- ----- ------ ----- ------
INDICATED 0.1% 347.7 0.21 0.45 0.04 0.015
----------- ------- ----------- ----- ------ ----- ------
INFERRED 0.1% 308.8 0.18 0.39 0.04 0.014
----------- ------- ----------- ----- ------ ----- ------
TOTAL 0.1% 656.5 0.20 0.43 0.04 0.014
----------- ------- ----------- ----- ------ ----- ------
The Mineral Resources
are declared inclusive
of Ore Reserves.
Site visits The CP visited the site
* Comment on any site visits undertaken by the on 7(th) and 8(th) of
Competent Person and the outcome of those visits. September 2016, inspections
were made of:
o Exploration drill
* If no site visits have been undertaken indicate why cores.
this is the case. o Underground visits
were undertaken to old
underground mine workings
close to and situated
in the same deposits
as the Cinovec project
area.
o The project surface
site was visited including
visits to:
* Possible surface infrastructure sites.
* The sites of existing vertical shafts into the old
Cinovec mine workings
* Access road and rail infrastructure.
Study A pre-feasibility study
Status * The type and level of study undertaken to enable (PFS) has been undertaken
Mineral Resources to be converted to Ore Reserves. for the Cinovec Project.
All material issues
relevant to the project
* The Code requires that a study to at least have been considered
Pre-Feasibility Study level has been undertaken to in this study to ensure
convert Mineral Resources to Ore Reserves. Such estimates to levels
studies will have been carried out and will have of accuracy generally
determined a mine plan that is technically achievable accepted for a PFS.
and economically viable, and that material Modifying
Factors have been considered.
=============== ============================================================ ==================================================================
Cut-off Revenue will be generated
parameters * The basis of the cut-off grade(s) or quality from the sales of Lithium
parameters applied. (Li), Tin (Sn) and Tungsten
(W). Each metal has
different in-situ grades,
plant recoveries, operating
costs and metal prices.
To determine the revenue
generated from a block
of material in the block
model there factors
need to be taken into
account. To do this
the total revenue and
operating costs were
calculated using a script
in the block model.
The cost was deducted
from the revenue to
produce a "Margin" value
for each block. Where
Margin is greater than
zero, the block is flagged
as ore. The metal prices,
recoveries and formulae
used to calculate the
operating costs for
purposes of the margin
calculation are tabled
below.
(Please refer to the
announcement on the
European Metals Website
for the Table described
above - www.europeanmet.com.)
=============== ============================================================ ==================================================================
Using the factors tabled
above the "Margin" value
was calculated for each
block in the block model.
The breakeven grade
is where Margin =0.
All blocks with Margin
greater than zero could
be considered ore. Applying
this criteria to the
block model allowed
a grade versus tonnage
curve to be generated
based on using the "Margin"
field as the grade field.
The resultant curve
is shown in the Figure
below.
(Please refer to the
announcement on the
European Metals Website
for the Table described
above - www.europeanmet.com.)
In order to optimise
the value of the project
a strategic decision
was made by the client
to mine at a higher
grade than the average
and to optimise the
mined grade by reducing
the tonnes and increasing
the grade to the point
where mine life becomes
the constraint, or the
mining becomes prohibitively
selective. The production
rate of the processing
plant was set by EMH
at 360,000 tpa of mica
concentrate. This equates
to approximately 1.7
million tpa of RoM ore.
For a mine life of over
20 years, which was
the requirement stated
by EM, the mining inventory
needs to be at least
34 million tonnes. Using
the grade versus tonnage
curve a cut-off of US$35/tonne
Margin was selected.
This resulted in the
appropriate mine life
while still allowing
the use of bulk mining
methods such as LHOS.
Mining Geotechnical input
factors * The method and assumptions used as reported in the A geotechnical study
or assumptions Pre-Feasibility or Feasibility Study to convert the was completed as part
Mineral Resource to an Ore Reserve (i.e. either by of the pre-feasibility
application of appropriate factors by optimisation or study. The geotechnical
by preliminary or detailed design). study prescribed geotechnical
design criteria which
should be applied in
* The choice, nature and appropriateness of the the mine design. The
selected mining method(s) and other mining parameters design criteria are
including associated design issues such as pre-strip, detailed in the table
access, etc. below.
(Please refer to the
announcement on the
* The assumptions made regarding geotechnical European Metals Website
parameters (eg pit slopes, stope sizes, etc), grade for the Table described
control and pre-production drilling. above - www.europeanmet.com.)
* The major assumptions made and Mineral Resource model
used for pit and stope optimisation (if appropriate).
* The mining dilution factors used.
* The mining recovery factors used.
* Any minimum mining widths used.
* The manner in which Inferred Mineral Resources are
utilised in mining studies and the sensitivity of the
outcome to their inclusion.
* The infrastructure requirements of the selected
mining methods.
Block model
The block model file
used for this study
was provided to Bara
by EM in February 2017
and is entitled Cinovec_Resource_Model_17_02_2017.dm.
The model is in Datamine
format. The table below
shows the fields in
the block model that
were used in the mine
planning process.
(Please refer to the
announcement on the
European Metals Website
for the Table described
above - www.europeanmet.com.)
Mining method
An evaluation was completed
to establish the achievable
extraction ratios with
and without backfill,
based on the geotechnical
design criteria including
pillar sizes and stope
spans (see above). The
preferred option was
to mine with pillars
support only, negating
the requirement for
a backfill plant.
The selected mining
method is long hole
open stoping with pillar
support. The payable
ore will be split into
blocks approximately
90 m long in the strike
direction and 25 m high.
The bottom of each block
will be accessed in
the central position
by an access crosscut
and the block will be
mined out from the centre
to the strike limit
by drifting. The stope
will be mined on retreat
from the block extent,
retreating to the access
cross cut position.
The stopes will be a
maximum of 13 m wide
with rib pillars between
stopes of 4 to 7 m wide
depending on stope height.
Access to the stopes
will be by footwall
drives developed in
the footwall at 25 m
vertical intervals.
All stope access crosscuts
will be developed out
of the footwall drives.
The mine will be accessed
by a twin decline system.
A conveyor will be installed
from the underground
primary crusher on 590m
Elevation to surface
in the conveyor decline.
The second decline will
be used as a service
decline for men, material
and as an intake airway.
Mining modifying factors
Stope shapes were determined
by use of stope optimisation
software after application
of minimum stope size
and stope geometry.
The design criteria
specified included:
* Cut-off - Margin >US$35 per tonne. This means that
the average margin of the resultant stope shape must
be greater than US$35/tonne.
* Stope width - 17 m (includes rib pillar, which was
deducted as a tonnage loss later in the schedule)
* Maximum stope height - Unlimited. Stope shapes
greater than 25m high were later split by level and
sill pillar losses accounted for.
* Minimum stope height - 5m (height of ore drive).
* Stope length - Minimum 10 m, maximum unlimited.
Stopes were later split into stope blocks with
maximum length of 180 m (two stopes of 90 m each)
* Minimum footwall slope angle - 50(o) .
After definition of
the stope shapes mining
modifying factors as
described below were
applied:
Mining Exclusions
1. The Northern most
portion of the orebody
is located below the
village. In this area
it was agreed to leave
an unmined crown pillar
of at least 150 m between
surface and the uppermost
mining level. In other
parts of the orebody
the crown pillar was
70 m.
2. DSO created stope
shapes according to
the criteria specified
above, but with no consideration
of the development required
to access these blocks.
The design was edited
to remove any blocks
that were not practical
to access, being either
excessively far from
planned development
and too small to justify
the access development,
or small volumes on
an elevation that is
difficult to access
being between mining
levels.
Pillar loss
Total pillar loss is
estimated to be 35%.
Unplanned dilution
In order to account
for these mining inefficiencies
unplanned dilution was
added to all stope tonnage.
Due to the large size
of the stopes the dilution
percentage is low at
3%. This allows for
approximately 0.25 m
of over break around
the entire stope.
Since the stopes are
defined by a grade cut-off
and the mineralisation
is disseminated, there
is not expected to be
a sharp drop-off of
grade outside the stope
envelope. The dilution
will therefore contain
metal grade. The average
grade of the resource
below the margin cut-off
of US$35/t has been
applied to the dilution
material in the mine
plan. The grade of the
dilution is:
Li% - 0.22
Sn% - 0.04
W% - 0.01
Ore loss
Ore loss does occur
in mining operations
due to mining inefficiencies.
This can be due to factors
such as:
* Ore not loaded out of stopes
* Grade control errors
* Haulage errors
* Underbreak in the blasting operation
* Stope hang ups
To account for these
inefficiencies an ore
loss factor of 3% has
been included in the
mining schedule. This
is a tonnage loss at
the average grade of
the block.
Inferred Resources
No inferred resources
were included as ore
in the pre-feasibility
mine plan. Inferred
resources were treated
as waste.
Infrastructure
Surface Infrastructure
The surface infrastructure
has been designed to
support the mining plan
with consideration of
the labour and mechanised
equipment requirements
of the operation in
addition to the movement
of rock, men and materials.
The infrastructure is
divided into two distinct
areas, with the area
at the portal servicing
the initial development
requirements and the
second servicing the
production phase. Allowance
has been made for;
* Security fencing.
* Site access control and parking.
* Development offices
* Development change house and laundry.
* Lamp house and crush.
* Medical station.
* Trackless workshop and wash bay.
* Compressor station
* Diesel farm.
* Oil and grease storage,
* Main store and material yard.
* Capital laydown area
* Service water storage and settling.
* Downcast air heating.
* Brake testing ramp
* Main offices
* Main change houses
* Main laundry.
* Training centre.
* Parking and bus drop off zone
* Fire systems
* Potable water infrastructure including municipal
Interface.
* Sewage Infrastructure including municipal Interface.
* Gas supply Infrastructure including municipal
Interface.
* MV electrical infrastructure including municipal
Interface.
* Explosives accessories magazine.
Underground Infrastructure
Underground infrastructure
designs take into consideration
the life of mine plan
and aims to support
the underground mining
production and development
activities. Underground
infrastructure comprises:
* Mine service water systems
* Mine dewatering systems, including clear and dirty
water pump stations.
* Mine electrical reticulation
* Control systems and instrumentation
* Trackless workshops
* Refuelling bays
* Underground crushers, tips, and conveyors.
The mine service water
system is a based on
a re-circulation design,
with settled water from
the mining activities
used as service water.
This reduces the mine
pumping requirement
in turn reducing power
costs.
In terms of electrical
reticulation, the Cinovec
mining operation will
require a bulk power
supply of 3.5 MVA. Power
will be provided by
a local supply authority
and it is anticipated
it will be at 6kV.
Underground Ore Handling
The underground ore
handling system is designed
for 500 t/h and will
comprise the following:
* A primary tip, equipped with a static grizzly and a
hydraulic rock breaker to break oversize lumps;
* An ore-pass;
* A primary crushing station, equipped with a vibrating
grizzly feeder and jaw crusher;
* A sacrificial conveyor (CV001), 18 m long, to protect
the main decline conveyor;
* A decline conveyor (CV002), 1,146 m long.
=============== ============================================================ ==================================================================
Metallurgical The beneficiation plant
factors * The metallurgical process proposed and the process route consists
or assumptions appropriateness of that process to the style of of crushing, SAG milling,
mineralisation. classification, thickening
and wet high intensity
magnetic separation
* Whether the metallurgical process is well-tested (WHIMS). The magnetic
technology or novel in nature. fraction passes to the
Lithium Carbonate Plant
(LCP). The non-magnetic
* The nature, amount and representativeness of fraction is processed
metallurgical test work undertaken, the nature of the by classification, spiral
metallurgical domaining applied and the corresponding concentration and regrinding
metallurgical recovery factors applied. of the spiral middlings.
The spirals product
is a tin / tungsten
* Any assumptions or allowances made for deleterious product. The LCP process
elements. route consists of roasting,
leaching filtration,
impurity removal by
* The existence of any bulk sample or pilot scale test ion exchange and crystallization.
work and the degree to which such samples are The testwork program
considered representative of the orebody as a whole. has indicated that the
process route selected
is appropriate for the
* For minerals that are defined by a specification, has style of mineralization
the ore reserve estimation been based on the of the orebody.
appropriate mineralogy to meet the specifications? The process route selected
utilizes standard, industry
proven technology. The
process route selected
was based on the testwork
carried out, and on
the respective engineering
companies' experience
on other, similar projects.
The samples used for
the beneficiation plant
testwork were quarter
core composites from
the drilling campaigns.
For the comminution
tests, composites were
made up of the various
ore types to provide
an indication of variability.
As composites of drill
cores were used for
the testwork, the samples
are considered to be
representative of the
deposit. The variability
in the deposit may be
an issue in the plant
operation, but additional
testwork will be carried
out during the feasibility
study to inform on this
issue. The mass of sample
received for the testwork
was 150kg, which enabled
appropriate sized samples
(taking into consideration
that the study being
carried out is pre-feasibility)
to be used for the various
tests. The product recoveries
were determined from
the testwork, factors
were not applied.
Testwork has produced
a saleable lithium carbonate
product (>99.5% lithium
carbonate) although
the levels of fluoride
(500 ppm) and silicon
(300 ppm) were high.
These elements are not
generally considered
to be deleterious elements
in product specifications.
Further testwork will
be carried out to reduce
these levels.
No bulk samples were
available for the testwork
but were not required
as the level of study
was pre-feasibility.
Pilot scale testwork
will carried out during
the feasibility study.
The composite samples
used for the testwork
are considered to be
representative of the
ore-body and suitable
for the testwork performed.
The specification for
the lithium carbonate
product is a minimum
of 99.5% lithium carbonate.
This was achieved in
the testwork. Testwork
will be carried out
during the next phase
of the project to further
improve on the quality
of the product to be
produced.
=============== ============================================================ ==================================================================
Environmental The Company has commenced
* The status of studies of potential environmental the Environmental Impact
impacts of the mining and processing operation. Assessment EIA process
Details of waste rock characterisation and the with a baseline study,
consideration of potential sites, status of design prepared by GET s.r.o
options considered and, where applicable, the status an independent Czech
of approvals for process residue storage and waste based environmental
dumps should be reported. consultancy. This identified
the environmental areas
to be assessed and determined
preliminary outcomes.
The underground mine
and surface portal is
located on the border
adjacent to an environmentally
sensitive area - Natural
park Eastern Krusne
hory.
The Project area is
mostly covered by forests
and treeless plateau
with bushy growth. The
area of Dubí township
is covered by farm land
(15%) and non-agricultural
land (85%), out of that
80% are forests. Intensive
biological investigation
executed in 2016 identified
20 natural biotops,
out of them 4 peat bogs,
springheads, waterlogged
spruce growths and mountain
meadows) are protected
within the Natura 2000.
Screening process also
identified 67 animal
species - 2 amphibians,
2 snakes, 51 birds and
11 mammals living in
the area. Of them, 14
species are protected.
Through the area also
runs the regional natural
bio corridor K2.
The Cinovec Sn/W Lithium
Project is governed
by Act No.100/2001 Coll.,
on Environment Impact
Assessment (hereinafter
referred to as the "EIA
Act"). The competent
authority is the Ministry
of the Environment (Environment
Impact Assessment Department).
An integrated permit
is issued upon completion
of the EIA process.
In consideration of
the exploitation mining
licence to be granted
and the expected production
of the Li-W-Sn ore exceeding
1 Mt a year during the
implementation of the
Project, the EIA documentation
must be prepared and
assessed (full-scope
EIA Report).
The Cinovec Sn/W Lithium
Project development
documentation shall
be structured as follows:
* details concerning the Notifier,
* details concerning the development project,
* details concerning the status of the environment in
the region concerned,
* comprehensive characteristics and assessment of the
Project impacts on public health and the environment,
* a comparison of project versions (if any),
* a conclusion, and
* a commonly understood summary and annexes (opinion of
the Building Authority, opinion of the Nature
Protection Authority, expert studies and
assessments).
The following expert
studies and assessments
must be compiled during
the EIA Documentation
preparation stage:
* noise impact study,
* air quality impact study,
* biological survey,
* human health impact study,
* transport impact study,
* landscape impact study, and
* water quality and hydrology impact study.
In this case, with respect
to the location of the
Project at the border
with Germany, the so-called
"international assessment"
provision applies (Section
13, Act No. 100). This
process is more time-demanding
- in an international
assessment, the Ministry
of the Environment may
extend the deadlines
to present views by
up to 30 days; other
deadlines (Sec. 12,
Act.100) are extended
adequately in such a
case.
EMH commenced the EIA
process with the baseline
study, prepared by GET,
which identified the
environmental areas
to be assessed and determined
preliminary outcomes.
The project, mainly
the underground mine
and surface portal is
located in environmentally
sensitive area. From
that perspective, the
EIA will focus particularly
on project impacts on
European protected areas
Natura 2000 (protected
birds) and mine water
discharge into surface
streams due to the content
of Berylium and radioactive
components. Considering
the long-term mining
history in region the
Project will not significantly
change the situation
towards to environment
and from that perspective
all identified potential
problems should be resolvable
and EMH do not envision
any fatal flaws will
be encountered.
The Cinovec EIA will
focus particularly on
Project impacts on European
protected areas Natura
2000 (protected birds)
and mine water discharge
into surface streams.
The Company has re-positioned
key infrastructure to
minimise impacts to
both the environment
and the community and
has placed crushing
facilities and fans
underground to minimise
noise as well as enclosing
the mill to further
reduce noise and visual
impacts. Considering
the long-term mining
history in region and
at the deposit itself,
the Project will not
significantly impact
the environment.
Waste Rock
Acid-Base accounting
(ABA): Acid-Base accounting
(ABA) is a screening
procedure whereby the
acid-neutralising potential
(assets) and acid-generating
potential (liabilities)
of rock samples are
determined, and the
difference, net neutralising
potential (equity),
is calculated.
Samples were devoid
of sulphides and have
no potential to generate
acid-mine drainage as
confirmed through both
the ABA and NAG test.
However, the Neutralisation
Potential of the samples
were also very low and
samples also had a very
low total C content.
However, the potential
to leach at least As
and F which should be
further investigated
through the column leach
testing as these two
parameters will also
be present in neutral
drainage from samples.
The addition of acid
to samples (ABCC method:
3 g sample in 100 ml
water as per AMIRA,
2002) resulted in quick
acidification confirming
that the samples had
almost no Neutralisation
Potential. The pH curve
is only slightly higher
than for the Blank (distilled
water).
Net Acid Generation
(NAG): The single addition
NAG test was used to
classify the acid generating
potential of all 42
samples. The NAG test
involves the reaction
of a sample with hydrogen
peroxide to rapidly
oxidise any sulphide
minerals contained within
a sample. The end result
represents a direct
measurement of the net
amount of acid generated
by the sample. This
value is commonly referred
to as the NAG capacity
and is expressed in
th is kg H2SO4/tonne.
All of the samples tested
were classified as non-acid
forming. The ICP analysis
of the NAG elution did
not yield any significant
results. This test is
more appropriate where
the sample have sulphides
that can be oxidised
with peroxide and ICP
analyses indicate metals
released.
Tailings
Tailings produced by
the gravity circuit
of the FECAB's beneficiation
plant and the Residue
Filtration Stream produce
by the LCP require permanent
impoundment in a suitable
Tailings Storage Facility
(TSF). For the PFS a
conservative approach
was taken by designing
a dry stack tailings
facility. Any water
from the dry stacked
tails is captured and
recycled to the LCP
process water feed.
This approach, although
higher in Capex, offers
the most environmentally
sustainable method of
tailings impoundment.
Tailings produced by
the gravity circuit
are filtered in two
pressure filters to
produce a filter cake
with a moisture content
of 18%. This moisture
content is based of
filtration test work
performed on a representative
tailings sample by Diemme(R)
with the results interpreted
by Ausenco and incorporated
into the FECAB design.
The FECAB filter cakes
falls into a bunker
below the pressure filters,
from where it is collected
by a wheel loader and
loaded into an articulated
truck for transfer to
the dry stacks tails
tip point. The articulate
truck dumps the tailings
filter cake where it
is spread and compacted
by a bulldozer. The
estimated cost of the
FECAB tailings disposal
is $1.00/ wet tonne.
The LCP tailings consist
of leach residue filter
cake produced by a pressure
filter. As with the
FECAB, the pressure
filter drops the filter
cake into a bunker for
loading via a wheel
loader. The estimated
cost for LCP residue
disposal is $1.50/ wet
tonne.
The loading, trucking
and spreading of the
tailings will be performed
by a local contract
earth moving company.
Data used as input criteria
to the TSF design concept
are listed in the table,
which is considered
adequate for PFS and
has been derived from
PFS level engineering.
(Please refer to the
announcement on the
European Metals Website
for the Table described
above - www.europeanmet.com.)
All permits for the
tailings dam, waste
rock dump and operations
will be applied for
when appropriate and
as governed by Czech
law. To date, permits
for mine de-watering
and preliminary mining
permits have been received.
=============== ============================================================ ==================================================================
Infrastructure Currently, no infrastructure
* The existence of appropriate infrastructure: exists at the mine site
availability of land for plant development, power, and therefore allowance
water, transportation (particularly for bulk has been made for all
commodities), labour, accommodation; or the ease with support facilities required
which the infrastructure can be provided, or by the planned mining
accessed. operation. Surface infrastructure
has been designed to
support the mining plan
with consideration of
the labour and mechanised
equipment requirements
of the operation in
addition to the movement
of rock, men and materials.
The infrastructure is
divided into two distinct
areas, with the area
at the portal servicing
the initial development
requirements and the
second servicing the
production phase. The
surface infrastructure
design includes all
facilities and services
(such as offices, changehouses,
workshops) as well as
utilities and reticulation
(such as power, water
and gas utilities) to
support the underground
mining activities for
the life of mine.
Underground infrastructure
designs take into consideration
the life of mine plan
and aims to support
the underground mining
production and development
activities. The underground
infrastructure primarily
comprises the underground
conveyor and crushing
system, dewatering facilities,
and underground workshops
=============== ============================================================ ==================================================================
Costs The capital and operating
* The derivation of, or assumptions made, regarding cost estimate has been
projected capital costs in the study. determined through the
application of budget
quotations, database
* The methodology used to estimate operating costs. costs and estimated
costs. These costs were
applied to material
* Allowances made for the content of deleterious take offs, bill of quantities
elements. and estimated quantities
derived from the engineering
design process. The
* The source of exchange rates used in the study. once the overall capital
cost was calculated,
the costs are scheduled
* Derivation of transportation charges. according to an implementation
plan in order to determine
the spend over the life
* The basis for forecasting or source of treatment and of the project.
refining charges, penalties for failure to meet (Please refer to the
specification, etc. announcement on the
European Metals Website
for the table showing
* The allowances made for royalties payable, both the Capital Costs -
Government and private. www.europeanmet.com.)
(Please refer to the
announcement on the
European Metals Website
for the table summarising
the Operating Costs
- www.europeanmet.com.)
Revenue Metal Prices Used 22
factors * The derivation of, or assumptions made regarding Tin (US$/t metal) 500
revenue factors including head grade, metal or -------------------- -----
commodity price(s) exchange rates, transportation and Tungsten (US$/MTU) 330
treatment charges, penalties, net smelter returns, -------------------- -----
etc. Lithium Carbonate 10
(US$/t) 000
-------------------- -----
* The derivation of assumptions made of metal or Potassium Sulphate
commodity price(s), for the principal metals, (Potash) (US$/t) 480
minerals and co-products. -------------------- -----
Exchange Rates Used USD 1.0000
===== ========
EUR 0.9276
===== ========
CZK 25.0500
===== ========
CAD 1.3082
===== ========
AUD 1.3212
===== ========
GBP 0.7965
===== ========
Market Lithium is the key driver
assessment * The demand, supply and stock situation for the of the Project. According
particular commodity, consumption trends and factors to Deutsche Bank, global
likely to affect supply and demand into the future. lithium demand increased
15% year on year to
212 kt LCE in 2016,
* A customer and competitor analysis along with the slightly ahead of estimates.
identification of likely market windows for the Deutsche Bank forecast
product. lithium pricing to remain
elevated relative to
historical averages,
* Price and volume forecasts and the basis for these but retrace 15% over
forecasts. 2016 pricing levels.
Further, the medium-term
outlook is improving
* For industrial minerals the customer specification, and Deutsche Bank has
testing and acceptance requirements prior to a supply recently lifted their
contract. 2019 demand forecast
to 380 kt.
The ramp up of new EV
model sales from major
auto companies is generally
considered to be the
key driver of lithium
demand in the short
to medium term. Other
factors include the
increased production
from battery manufacturing
facilities and the continued
inventory build within
the supply chain.
The Cinovec Project
is located centrally
and within close proximity
to a number of major
European car manufacturers.
Benchmark expects the
average forecasted price
range for lithium carbonate
99.95% to be $ 9,500
to $ 13,000/tonne (USD)
between 2017 and 2020.
European Metals has
considered this forecast
in light of other independent
forecasts such as Deutsche
Bank, and on generally
available lithium market
commentary.
For the purposes of
the PFS with regards
to financial modelling,
a long-term average
price of $ 10,000/t
lithium carbonate FOB
has been used. The graph
below shows the Deutsche
Bank lithium price forecasts
to 2025.
(Please refer to the
announcement on the
European Metals Website
for the graph described
above - www.europeanmet.com.)
=============== ============================================================ ==================================================================
A cost comparison shows
the project will be
in the lowest half of
the global cost curve.
(Please refer to the
announcement on the
European Metals Website
for the cost comparison
table described above
- www.europeanmet.com.)
The graph below shows
the anticipated supply
and demand for lithium.
(Please refer to the
announcement on the
European Metals Website
for the table showing
the anticipated supply
and demand for lithium
- www.europeanmet.com.)
There are industry standard
specifications for lithium
carbonate. The table
below shows that the
results achieved to-date
in testing meets these
standards.
(Please refer to the
announcement on the
European Metals Website
for the table as described
above - www.europeanmet.com.)
Economic The results of the techno-economic
* The inputs to the economic analysis to produce the evaluation demonstrate
net present value (NPV) in the study, the source and that the project is
confidence of these economic inputs including economically viable
estimated inflation, discount rate, etc. based on the designs
established and the
assumptions used in
* NPV ranges and sensitivity to variations in the this study. The table
significant assumptions and input. below shows that the
financial result is
positive when considering
the time value of money.
At a discount rate of
8 per cent, the NPV
is 540 million USD and
the post-tax IRR is
20.9 per cent.
(Please refer to the
announcement on the
European Metals Website
for the table as described
above - www.europeanmet.com.)
Sensitivity analysis
shows that the project
is most sensitive to
changes in the price
of lithium, as presented
in the figure below.
(Please refer to the
announcement on the
European Metals Website
for the figure described
above - www.europeanmet.com.)
Social The Cinovec project
* The status of agreements with key stakeholders and has been included in
matters leading to social licence to operate. the Czech Government
programme for the restructuring
of the region Usti in
the context of Government
support of the regions
damaged by the former
coal mining. The projects
included in this Government
programme will have
the full support of
the Central Government,
regional Governments
and all the social partners
within the region. The
Ministry of industry,
in collaboration with
the Ministry of Foreign
Affairs also prepare
a Memorandum of cooperation
between the Czech Republic
and Australia in which
the Government of the
Czech Republic declares
full support for the
Cinovec project.
=============== ============================================================ ==================================================================
Other There is a clear process
* To the extent relevant, the impact of the following for the award of Mining
on the project and/or on the estimation and Permits in the Czech
classification of the Ore Reserves: Republic. These include
placing the reserves
on "State Balance" which
* Any identified material naturally occurring risks. has largely been completed.
Subsequently a Preliminary
Mining permit is issued.
* The status of material legal agreements and marketing This has been received
arrangements. for a portion of the
deposit and work is
on-going to gain a permit
* The status of governmental agreements and approvals for the remaining area.
critical to the viability of the project, such as Subsequent to this,
mineral tenement status, and government and statutory a Mining Permit can
approvals. There must be reasonable grounds to expect be issued once all other
that all necessary Government approvals will be requirements are met,
received within the timeframes anticipated in the ie an approved EIA,
Pre-Feasibility or Feasibility study. Highlight and land zoning change for
discuss the materiality of any unresolved matter that certain works etc.
is dependent on a third party on which extraction of The lands needed for
the reserve is contingent. the construction of
the mine, the transport
pipeline and the processing
plant are mostly owned
by the state and a private
owner Forests North,
who are all supportive
of the project.
Marketing agreements
need to be entered into
by the Company. The
Company has commenced
discussions with offtakers
and with the forecast
supply/demand curve
is confident that any
battery grade lithium
will be readily sold
into the market.
Classification The classification of
* The basis for the classification of the Ore Reserves the Ore Reserves is
into varying confidence categories. shown below:
* Whether the result appropriately reflects the
Competent Person's view of the deposit.
* The proportion of Probable Ore Reserves that have
been derived from Measured Mineral Resources (if
any).
CINOVEC ORE RESERVES SUMMARY
--------------------------------------------------------
Li(2)
Tonnes Li 0 Sn W
-------------- ----------- ----- ------ ----- -----
Category (Millions) % % % %
-------------- ----------- ----- ------ ----- -----
Proven Ore
Reserves 0 0 0 0 0
-------------- ----------- ----- ------ ----- -----
Probable Ore
Reserves 34.5 0.30 0.65 0.09 0.03
-------------- ----------- ----- ------ ----- -----
Total Ore
Reserves 34.5 0.30 0.65 0.09 0.03
-------------- ----------- ----- ------ ----- -----
This reflects the Competent
Persons view of the
deposit.
All Ore Reserves declared
are Probable Ore Reserves
and are derived from
Indicated Mineral Resources.
The classification is
based on two factor
being:
* Engineering study work has only progressed to
preliminary feasibility levels of accuracy thus
confidence levels in the engineering and costing are
only appropriate for Probable Ore Reserves.
* The Mineral Resources converted to Ore Reserves are
all at the Indicated level of confidence which will
only support conversion to Probable Ore Reserve.
=============== ============================================================ ==================================================================
Audits No external audits of
or reviews * The results of any audits or reviews of Ore Reserve the ore reserve have
estimates. been undertaken to date
Discussion The accuracy and confidence
of relative * Where appropriate a statement of the relative level of the selected
accuracy/ accuracy and confidence level in the Ore Reserve modifying factors are
confidence estimate using an approach or procedure deemed considered to be commensurate
appropriate by the Competent Person. For example, the with a preliminary feasibility
application of statistical or geostatistical study.
procedures to quantify the relative accuracy of the The accuracy and confidence
reserve within stated confidence limits, or, if such in the cost estimation,
an approach is not deemed appropriate, a qualitative which is based primarily
discussion of the factors which could affect the on the work completed
relative accuracy and confidence of the estimate. by the various consulting
groups are considered
to be at pre-feasibility
* The statement should specify whether it relates to study levels of accuracy,
global or local estimates, and, if local, state the typically to +/- 25%
relevant tonnages, which should be relevant to accuracy.
technical and economic evaluation. Documentation
should include assumptions made and the procedures
used.
* Accuracy and confidence discussions should extend to
specific discussions of any applied Modifying Factors
that may have a material impact on Ore Reserve
viability, or for which there are remaining areas of
uncertainty at the current study stage.
* It is recognised that this may not be possible or
appropriate in all circumstances. These statements of
relative accuracy and confidence of the estimate
should be compared with production data, where
available.
=============== ============================================================ ==================================================================
This information is provided by RNS
The company news service from the London Stock Exchange
END
DRLEAFFAEDEXFEF
(END) Dow Jones Newswires
November 02, 2017 03:00 ET (07:00 GMT)
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