Europa Metals Ltd Results for the Half-Year Ended 31 December 2020 (7175T)

TIDMEUZ

RNS Number : 7175T

Europa Metals Ltd

29 March 2021

29 March 2021

Europa Metals Ltd

("Europa Metals", the "Company" or the "Group") (AIM / AltX: EUZ)

Results for the Half-Year Ended 31 December 2020

Europa Metals, the European focused lead-zinc and silver developer, is pleased to announce its unaudited results for the half year ended 31 December 2020 (the "Half-Year Financial Report").

Please see below extracts from the Half Year Financial Report, being the:

   -     Chairman's and CEO's Reviews 
   -     Review and results of operations 
   -     Consolidated Statement of Profit or Loss and Other Comprehensive Income 
   -     Consolidated Statement of Financial Position 
   -     Consolidated Statement of Changes in Equity 
   -     Consolidated Statement of Cash Flows 

A copy of the full Half-Year Financial Report is available on the Company's website at: www.europametals.com .

   For further information on the Company, please visit   www.europametals.com   or contact: 

Europa Metals Ltd

Dan Smith, Non-Executive Director and Company Secretary (Australia)

T: [phone]

Laurence Read, CEO (UK)

T: [phone]

Linkedin: Europa Metals ltd

Twitter: @ltdeuropa

Vox: Europametals

Strand Hanson Limited (Nominated Adviser)

Rory Murphy/Matthew Chandler

T: [phone]

Tavistock (PR and IR)

Emily Fenton/Oliver Lamb

T: [phone] / [e-mail]

Turner Pope Investments (TPI) Limited (Broker)

Andy Thacker

T: [phone]

Sasfin Capital Proprietary Limited (a member of the Sasfin group)

Sharon Owens

T (direct): [phone]

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018.

Key Extracts from the Company's unaudited Half-Year Financial Report are set out below :

Chairman's Review

Having assumed the role of Executive Chairman during this reporting period, serving alongside Laurence Read as CEO, as a Board we felt it appropriate to include comments from the executive management for the first time in these unaudited half-year results.

As a responsible natural resource development company, workforce and stakeholder safety are of principal importance to us as a Board of Directors. During the reporting period full health security measures, based on Spanish, UK and Australian best practice were maintained and monitored as the Coronavirus (COVID-19) pandemic continued.

I think it is a reflection of the Europa Metals team's professionalism and capability that not a single COVID-19 infection was reported during the period within the Company whilst a series of major operational and corporate milestones were delivered. We have continued to advance our understanding of the Toral lead, zinc and silver project as a potential future low capex, high margin lead, zinc and silver mine located within the EU.

During 2020, a clear strategy was pursued to complete all the requisite work for a revised (from the 2018 Scoping Study), independent preliminary economic study to be commissioned and its findings published. Such report, compiled by Bara Consulting and published on schedule in November 2020, encompassed an indicated resource for the first time, the results of a series of metallurgical test work programmes including an initial ore sorting analysis, geotechnical and hydrogeological studies. The report's findings were significant with a substantial increase in ROM tonnes to 700,000 tonnes per annum ("tpa") with an all-in cost of US$63.56/t, US$79m upfront capex to production and project payback in year four realising an NPV of US$156m at an 8% discount rate with a 31.3% IRR. Importantly, the economic report identified that the 12 year mine life "ends" in the highest zinc grades for production consequently highlighting the expansion potential at depth and to the east once Toral achieves future production, thereby creating the possibility for a longer and larger mining operation than currently outlined.

For the last four years, Europa Metals has progressed Toral as a realisable project, with potential for robust margins in a safe jurisdiction. The abovementioned new economic report, enables us to seek to progress our corporate objectives to secure a pathway forward for the Company that delivers equity value through development, including partnerships or a substantial transaction. In support of our corporate objectives, the Company proposed a series of resolutions to shareholders at a general meeting held in July 2020 in order to strengthen Europa Metals' capital structure and governance. All such resolutions were duly passed including a 500:1 share consolidation, the implementation of more UK market standard pre-emption rights and approval of an options package to peg the directors' incentivisation with equity value growth. Subsequently, Europa Metals was able to secure GBP2m (before expenses) via a market fundraising at a premium to the six month pre-consolidation VWAP.

At the time of writing, further drilling is underway at the Toral project to form the basis of a Pre-Feasibility Study ("PFS") whilst corporately we are actively involved in a number of initiatives that we believe could potentially lead to a major value event for all Europa Metals shareholders. Further updates will be made as and when appropriate.

Myles Campion

Executive Chairman

CEO's Review

First of all, I would like to add to our Chairman's comments regarding Europa Metals operations during the ongoing Coronavirus (COVID-19) pandemic. Safety always sits at the heart of our decision-making process and I am happy to confirm that during the period not a single case of COVID-19 was contracted by any member of our workforce. The diligence by our Spanish team on the ground is to be commended in terms of both implementing and communicating best practice protocols regarding social distancing, hygiene and all other guidance from the relevant authorities during this global health crisis. Due to our prioritisation of worker and stakeholder safety, we are not currently providing any guidance to the market on workflow timing as we do not want any metrics in place that might lead to an inappropriate decision being made at any level of the Company.

What is very evident though is the significant amount of operational and development work achieved during the second half of 2020.

Following the appropriate governance and capital structure changes being approved by Europa Metals' shareholders in July 2020, the Company signed a product marketing agreement with Conrad Partners, a leading Hong Kong based concentrate agent within the industrial metals space. Further to Conrad's review of the Toral lead, zinc and silver project's dataroom, the group has begun actively marketing the project which contributed to the marketing section of the new independent preliminary economic study undertaken by Bara Consulting, the key findings of which were announced on schedule in November 2020.

During August 2020, the Company announced a 40% increase in the project's indicted resource at an average grade of 8.3% zinc equivalent (including Pb credits) and 30g/t Ag; a significant average grade above cut-off.

The Phase III metallurgical and ore sorting results were also announced, undertaken by Wardell Armstrong International, which showed significant grade and recoveries including the following from hole TOD-025H: 83.9% Pb recovery to a 79.2% Pb concentrate; 87.7% Ag recovery to 512ppm Ag within Pb concentrate; and 87.7% Zn recovery to a 60.0% Zn concentrate. The ore sorting results were incorporated into the independent economic study and contributed to the uplift in potential margins and scale outlined within the new financial model.

Europa Metals also secured a EUR466,801.50 interest free loan by way of a grant (the "Grant") from the Spanish Governmental agency, CDTI. Such interest free loan is an innovation grant further to our established partnership with the University of Salamanca and SPI drilling, with the funds drawn to be allocated towards the development of R&D technologies relating to the recording and correction of drillhole deviation at the Toral Project. The Company will draw the Grant monies down in up to three tranches, with the prior agreement of the CDTI, with the initial tranche, comprising an amount of EUR163,380, duly received by the Company. The second and third tranches are scheduled to be drawn down over a period of approximately 18 months subject to certain, defined, operational milestones. In addition to being able to secure asset level funding, the importance of partnering with such key regional stakeholders cannot be over emphasised.

Following the CDTI grant, Europa Metals secured a new, three-year Investigation Permit for Toral, until 15 November 2023, from the Junta of Castilla y Leo n. The application was made further to consultation and feedback from the Junta and the Company will continue to work towards fulfilling all the requisite criteria in preparation for a formal mining licence application in due course. One of the benefits of working within the region is that, due to its long history of mining, the processes to be completed towards a mine development decision are clear, well informed and well established. With increasing focus on supply chain transparency, stakeholder engagement and environmental best practice, we believe that the transparent regulatory structure within Castilla y Leo n stands us in good stead against a changing investment and commodity markets' backdrop.

As noted by our Chairman, the completion of the independent economic study by Bara Consulting has revealed a significant up lift in the economic potential for the project. At present, we are engaged with a number of parties who are reviewing the full report and the Toral project's data room, as well as progressing the Toral project's PFS. The current drill campaign will seek to retrieve resource, geotechnical and metallurgical data within the upper levels of the project. Such upper levels represent the early years for potential future production from the project and by initially focussing within this zone we will endeavour to enhance our understanding of how the initial payback period might be improved. Implementing ore sorting at the upper levels of the project in the silicious zone will be one of the possibilities analysed and I look forward to announcing updates to the market at the appropriate time.

Laurence Read

CEO

Review and results of operations

Europa Metals is a European focused lead-zinc and silver developer.

Operating Results

During the half-year from 1 July 2020 to 31 December 2020, the Group recorded a net loss after tax of AUD1,647,142 (1 July 2019 to 31 December 2019: net loss of AUD1,399,416).

Toral Lead-Zinc-Silver Project, Spain ("Toral" or the "Toral Project")

Following the completion of the Scoping Study announced by the Company in December 2018, workstreams have focused on additional resource drilling, geotechnical drilling, metallurgical testwork and environmental baseline studies.

On 14 August 2020, the Company announced an updated independent mineral resource estimate ("MRE") at Toral. The updated MRE represented a 40% increase in the indicated resource to 3.8 million tonnes ("Mt") @ 8.3% zinc equivalent ("ZnEq") (including Pb credits) and 30g/t Ag. In summary, the updated MRE revealed a:

   --      40% increase in indicated resource tonnes; 
   --      38% increase in indicated contained tonnes of zinc to approximately 180,000 tonnes; 
   --      36% increase in indicated contained tonnes of lead to approximately 150,000 tonnes; and 
   --      32% increase in indicated contained ounces of silver to approximately 3.7 million ounces. 

The MRE incorporated data obtained from:

o 113 diamond (including wedges) and 4 reverse circulation (RC) drill holes totalling 60,915.65 metres; and

   o   19 underground channels for 18.75 metres. 

The MRE, effective as of 12 August 2020, comprises:

-- An indicated resource of approximately 3.8Mt @ 8.3% Zn Equivalent (including Pb credits), 4.7% Zn, 3.9% Pb and 30g/t Ag, including:

o 180,000 tonnes of zinc, 150,000 tonnes of lead and 3.7 million ounces of silver.

-- An inferred resource of approximately 14Mt @ 6.5% Zn Equivalent (including Pb credits), 4% Zn, 2.7% Pb and 23 g/t Ag, including:

o 540,000 tonnes of zinc, 360,000 tonnes of lead and 10 million ounces of silver.

-- A total resource of approximately 17Mt @ 6.9% Zn Equivalent (including Pb credits), 4.1% Zn, 2.9% Pb and 24 g/t Ag, including:

o 720,000 tonnes of zinc, 510,000 tonnes of lead and 14 million ounces of silver.

The Board believes that the results of this update compare favourably with the Company's previously reported MRE, announced on 29 October 2019, comprising the following tonnages and grades:

-- An indicated resource of approximately 2.7Mt @ 8.9% Zn Equivalent (including Pb credits), 5% Zn, 4.2% Pb and 32 g/t Ag, including:

o 130,000 tonnes of zinc, 110,000 tonnes of lead and 2.8 million ounces of silver.

-- An inferred resource of approximately 16Mt @ 7.2% Zn Equivalent (including Pb credits), 4.5% Zn, 2.9% Pb and 22 g/t Ag, including:

o 690,000 tonnes of zinc, 450,000 tonnes of lead and 11 million ounces of silver.

-- A total resource of approximately 18Mt @ 7.4% Zn Equivalent (including Pb credits), 4.5% Zn, 3.1% Pb and 24 g/t Ag, including:

o 830,000 tonnes of zinc, 570,000 tonnes of lead and 14 million ounces of silver.

*Zn Eq % is the calculated Zn equivalent incorporating lead credits; (Zn Eq (Pb)% = Zn + Pb*0.926). Zn Eq (PbAg)% is the calculated Zn equivalent incorporating silver credits as well as lead; (Zn Eq (PbAg)% = Zn + Pb*0.926 + Ag*0.019). Zn equivalent calculations were based on 3-year trailing average price statistics obtained from the London Metal Exchange and London Bullion Market Association giving an average Zn price of US$2,680/t, Pb price of US$2,100/t and Ag price of US$16.2/oz.

http://www.rns-pdf.londonstockexchange.com/rns/7175T_1-2021-3-27.pdf

Image 1: showing Addison Mining Services Limited's ("AMS") resource block model for Toral as a 3D view looking north, by resource category

Image 2 below presents a grade contour section of one of the high-grade zones at the Toral Project. Hole TOD-023 sits within a zone of >8% ZnEq (PbAg) and supports the premise that the main corridor of mineralisation is continuous.

http://www.rns-pdf.londonstockexchange.com/rns/7175T_1-2021-3-27.pdf

Image 2: Grade contour map of one of the high-grade zones at the Toral Project

Image 3 below illustrates the location of Image 2 within the existing Toral Inferred resource block model (as reported on 10 December 2018).

http://www.rns-pdf.londonstockexchange.com/rns/7175T_1-2021-3-27.pdf

Image 3: Location of high-grade zone within the Toral Project's Inferred resource block model

Metallurgical work programme

Objectives of the Phase III metallurgical testwork and ore sorting analysis

During the period under review, the Company reported the results of ongoing metallurgical testwork at Toral. Wardell Armstrong International (WAI) conducted tests on metallurgical samples, representing the expected ore types from Toral, in order to develop a flowsheet for the potential economic feasible beneficiation of Toral ores to produce marketable concentrates, as well as establishing basic processing data for input into engineering studies. Such work builds on the positive results from WAI's two previous metallurgical programmes, with the design based on its previous recommendations. Work has also been undertaken with Bara Consulting regarding an analysis of the potential for ore sorting at the Toral Project, in order to refine a potential future production process for the discrete treatment of different areas of the resource with increased metal recovery.

Three samples were submitted to WAI for testing, representing different ore types likely to be encountered within Toral during potential future production, with all of the ore sorting samples firstly subjected to an ore sorting process followed by flotation testing. The representative samples were as follows:

1. High-grade intersection from drill hole TOD-025 (TOD-025H), which was subjected to flotation tests.

2. Low-grade fresh sample from drill hole TOD-025 (TOD-025L) for determining the use of XRT ore sorting technology.

3. Weathered, low-grade, sample from drill hole TOD-024, also subjected to XRT analysis.

Summary of ore sorting

Ore sorting has been identified as having the potential to unlock value in the shallower, lower grade zones previously not considered to be economically mineable in the 2018 Scoping Study. Testing was therefore undertaken to investigate the potential of pre-concentrate material from the Toral deposit by means of sensor-based sorting. If successful, pre-concentration of the ore could provide a number of potential benefits for the project including:

-- Reducing the size of the requisite process plant (crushing, grinding and dewatering circuits) whilst maintaining the same overall throughput;

   --   Enabling ore that may otherwise be sub-economic based on grade to be processed; and 

-- Allowing higher mining rates without necessarily having to increase the size of the processing plant.

Overall, the sorting results for both the TOD-024 and TOD-025L samples were considered to be excellent, with between 45% - 50% of the mass rejected at, for the TOD-024 sample, 98% Pb recovery, 97% Zn recovery and 92% Ag recovery, and at, for the TOD-025L sample, 98% Pb recovery, 94% Zn recovery and 82% Ag recovery.

The increasing head assay was also pleasing with the TOD-024 sample increasing from 1.04% Pb and 1.01% Zn in the feed to 2.34% Pb and 2.15% Zn and an approximate doubling of the grade in the sorter product. In the TOD-025L sample the increase in grade was more pronounced with uplifts in the Pb grade from 1.13% Pb to 4.03% and Zn grade from 0.62% Zn in the feed to 2.06% Zn in the sorter product.

Ore sorting process

Ore sorting by means of XRT is an established process for sorting Pb/Zn ores by way of rejecting waste dilution from ores at low cost prior to more conventional processing by flotation. Sensor-based sorting was selected for WAI's investigation as it offers a number of benefits over alternative pre-concentration methods, such as Dense Media Separation (DMS), including the ability to change the sorting criteria depending on the feed material and target specific metals/minerals of interest along with the added flexibility of not having to be continuously operated.

Toral ore sorting analysis

Based on the minerals of interest in the feed (galena/sphalerite) and the predominant host mineralisation (calcite/dolomite), sorting by means of XRT sensing was selected for investigation as part of the study as it allows detection of the minerals of interest both on the surface and within the particle being sorted.

Two low grade samples were taken and submitted for analysis to WAI for sorting testwork alongside TOMRA, a leading provider of ore sorting technology based in Germany and overseen by Bara Consulting. The objective of the work was to identify the potential economic benefits of processing low-grade and weathered material through beneficiation circuits during the future mine life of Toral alongside the central, high-grade core of the project. The samples analysed were TOD-025L and TOD-024.

The results, presented in Table 1 below, showed lead and zinc stage recoveries in excess of 94.5% for the TOD-024 sample and in excess of 89.2% for the TOD-025L sample.

Overall, taking into account the metal contained within the -10.0mm "fines" fraction, the data showed that in excess of 94% of the overall lead and zinc in the feed could be recovered through the ore sorting process whilst rejecting a minimum of 40% of the original mass.

Table 1: Summary of ore sorting results from the TOD-024 and TOD-025L samples:

 
 TOD-024 (Sort+Float) Sorter Test Results 
------------------------------------------------------------------------------------------------------------ 
 Size Fraction       Product            Mass             Assay         Sorter Recovery     Overall Recovery 
      (mm)                                                                   (%)                  (%) 
--------------  ----------------  ---------------  ----------------  ------------------  ------------------- 
                                   (kg)     (%)     Pb (%)   Zn (%)     Pb        Zn         Pb        Zn 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
  -25.0+10.0     Stage 1 Product   5.21    22.76     2.34     2.15     96.43     94.52     51.08      48.23 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
                 Stage 2 Product   2.16     9.41     0.08     0.07     1.40      1.33       0.74      0.68 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
                  Stage 2 Waste    9.06    39.54     0.03     0.05     2.17      4.15       1.15      2.12 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
     -10.0            Fines        6.48    28.29     1.73     1.75       -         -       47.03      48.98 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
     Feed               -          22.90   100.00    1.04     1.01       -         -       100.00    100.00 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
 TOD-025 (Sort+Float) Sorter Test Results 
------------------------------------------------------------------------------------------------------------ 
 Size Fraction       Product            Mass             Assay         Sorter Recovery     Overall Recovery 
      (mm)                                                                   (%)                  (%) 
--------------  ----------------  ---------------  ----------------  ------------------  ------------------- 
                                   (kg)     (%)     Pb (%)   Zn (%)     Pb        Zn         Pb        Zn 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
  -25.0+10.0     Stage 1 Product   3.91    14.24     4.03     2.06     96.08     89.22     50.81      46.97 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
                 Stage 2 Product   2.73     9.96     0.13     0.18     2.24      5.52       1.19      2.90 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
                  Stage 2 Waste    8.59    31.31     0.03     0.06     1.68      5.27       0.89      2.77 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
     -10.0            Fines        12.20   44.49     1.20     0.66       -         -       47.11      47.36 
--------------  ----------------  ------  -------  -------  -------  --------  --------  ---------  -------- 
     Feed               -          27.42   100.00    1.13     0.62       -         -       100.00    100.00 
==============  ================  ======  =======  =======  =======  ========  ========  =========  ======== 
 

Investigation Permit Renewal

On 8 June 2020, the Company announced that it had submitted an application to the Junta of Castilla y León for a new three year investigation permit ("Investigation Permit") in respect of the Toral Project.

The Company was granted an initial Investigation Permit for Toral in 2017, which was due to expire in November 2020 following conclusion of the customary three year period. An Investigation Permit provides a company with the right to pursue exploration activities at a project. As such, since 2017, as permitted under the Investigation Permit, the Company has commissioned and conducted a significant amount of work on the Toral Project, including, inter alia, a maiden JORC inferred resource and first indicated resource estimate, a detailed scoping study, hydrogeological analysis, geotechnical studies, environmental monitoring, social engagement and initial metallurgical test work.

On 12 November 2020, the Company announced that the Investigation Permit had been renewed, following, inter alia, a consultation process conducted by the relevant bodies of the Junta of Castilla y Leo n, for a further three years until 15 November 2023.

During the period to 15 November 2023 , Europa Metals will seek to prioritise the completion of all necessary tasks in order to enable application to be made for a Mining Licence in respect of the Toral Project, in pursuit of an appropriate, sustainable, mining development project at Toral.

Economics Update

On 18 November 2020, the Company announced the results from an independent Preliminary Economic Study (the "Study") in respect of Toral. The Study, inter alia, updated the economics from the previous Scoping Study undertaken by Addison Mining Services Limited ("AMS") in late 2018 (the "2018 Scoping Study"), and incorporated the positive findings generated from the workstreams conducted by the Company and its consultants over the previous 12-18 months, including the results from ore-sorting undertaken by Bara Consulting, metallurgical testwork by Wardell Armstrong International, as well as reflecting a change in the selected future mining method and a general improvement in metal prices since 2018.

CDTI Loan Funding

On 19 October 2020, the Company announced that following an extensive submission process, an interest -free loan by way of a grant of EUR466,801.50 (the "Grant") had been awarded to the Company by the Centre for the Development of Industrial Technology (CDTI) for use towards research and development ("R&D") at Toral.

The CDTI is a Public Business Entity in Spain, under the auspices of the Ministry of Science and Innovation, which fosters the technological development and innovation of Spanish companies. The Grant is categorised as a partly refundable loan (with a nil per cent. interest rate) with the funds received to be allocated towards the development of R&D technologies relating to the recording and correction of drillhole deviation at the Toral Project. Application for the Grant was made further to ongoing work by Europa Metals and the AIR Institute, linked to the Salamanca University, and drilling contractors Sondeos y Perforaciones Industriales de Bierzo SA ("SPI").

Europa Metals will draw the Grant monies down in up to three tranches, with the prior agreement of the CDTI, with the initial tranche, comprising an amount of EUR163,380, received by the Company during the reporting period. The second and third tranches are scheduled to be drawn down over a period of approximately 18 months subject to certain, defined, operational milestones. The core objectives of the Innovation Programme are to retrieve and process data from the current Toral drilling campaign in order to develop algorithmic software for use in exploration campaigns to correct drilling deviation. Biannual repayments of EUR21,822 begin in 2024, running for 7 years until 2031, with a fixed interest rate of nil per cent.

Once the funds have demonstrably been spent on appropriate R&D exploration activity at the Toral Project by the Company, 70 per cent. of the total Grant will be repayable with the balancing 30 per cent. then not required to be repaid.

Coronavirus (COVID-19) impact on operations

The Board is actively monitoring the impact of COVID-19 on the group's operations on an ongoing basis.

The Company's response to the global coronavirus (COVID-19) health event has been to safeguard all key personnel at all sites and limit all travel, including to work at its sites, following the advice and guidance issued by all relevant health authorities. For the time being, site visits from overseas have been suspended and operations have been amended to primarily reflect the uncertain health security issues, but also to take into account the current status of international equity and commodity markets. With a significant amount of core samples and data having already been retrieved, the Company took steps to conserve its existing capital and continue with a series of key, desktop or laboratory based workstreams.

The Company has carefully followed guidance issued by the Spanish and UK governments and has halted all non-essential travel and instructed the majority of its workforce to remain working remotely at home. Nevertheless, metallurgical and flow sheet optimisation work can continue from the samples already retrieved and the latest drill campaign is ongoing.

There does not currently appear to be any material impact on the Company or any significant uncertainties with respect to events or conditions which may impact the Company unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.

Competent Person's statement

The information above that relates to Exploration Results is based on information compiled by Mr J.N. Hogg, MSc. MAIG Principal Geologist for AMS, an independent Competent Person within the meaning of the JORC (2012) code and qualified person under the AIM guidance note for mining and oil & gas companies. Mr Hogg has reviewed and verified the technical information that forms the basis of, and has been used in the preparation of, the significant intercepts referred to in this announcement, including all analytical data, diamond drill hole logs, QA/QC data, density measurements, and sampling, diamond drilling and analytical techniques. Mr Hogg consents to the inclusion of the matters based on the information, in the form and context in which it appears. Mr Hogg has also reviewed and approved the technical information in his capacity as a qualified person under the AIM Rules for Companies.

Corporate

Board changes

On 5 August 2020, the Company announced that Mr Colin Bird had resigned as a director of the Board. On the same day, Mr Myles Campion was appointed Executive Chairman and Mr Laurence Read was appointed as Chief Executive Officer.

Capital raising

On 19 August 2020, the Company announced that it had raised GBP2,000,000 (before expenses) via the issue of, in aggregate, 15,686,274 (post-consolidation) new ordinary shares at an issue price of 12.75 pence per share to certain existing and new investors. The net proceeds from the fundraising are primarily being utilised towards progressing the workstreams required for a Pre-Feasibility Study at the Toral Project and general working capital purposes.

Issue of options

On 24 July 2020, the Company announced that following approval of resolutions 5 to 9 at the Company's general meeting held on 15 July 2020, the Company had granted, in aggregate, 1,980,000 options to the Company's Executive and Non-Executive Directors (the "Incentive Options"). The Incentive Options are exercisable at varying premiums (25 - 75%) to 6.03 pence, being the 30-day VWAP up to and including 23 July 2020.

On 18 December 2020, the Company announced that following approval of resolutions 2 to 5 at the Company's Annual General Meeting held on 30 November 2020, the Company had granted, in aggregate, a further 1,380,000 options to the Company's Executive and Non-Executive Directors. Such options are exercisable at 8.89 pence per share for the Executive Directors and at 12.89 pence per share for the Non-Executive Directors, being the 10-day VWAP and a 45% premium to the 10-day VWAP, up to and including 17 December 2020, respectively.

Shareholder Meetings

On 15 July 2020, the Company held a general meeting whereby all resolutions, including those in respect of a 500:1 consolidation of the Company's share capital and the issue of Director incentive options, were approved by shareholders by way of a poll.

On 30 November 2020, the Company held its Annual General Meeting whereby all resolutions were also duly approved by shareholders by way of a poll.

Share Consolidation

Following the abovementioned shareholder approval, on 16 July 2020 the consolidation of the Company's ordinary shares on a 500:1 basis was effected.

Events subsequent to the reporting date

On 18 January 2021, the Company announced that it had commenced further diamond drilling at the Toral Project, which forms part of the Company's PFS workstreams. The programme also forms part of the Innovation Partnership with the University of Salamanca and Sondeos y Perforaciones Industriales de Bierzo SA, which helped secure the grant award of EUR466,801.50 to the Company from the Centre for the Development of Industrial Technology.

On 27 January 2021, the Company announced that it had appointed Mr Adam Habib as an adviser to the board on corporate development. Mr Habib is working with the Company to progress its strategy to maximise value for Europa Metals' shareholders and providing corporate development advice and support as the Company seeks to move to the next stage in its development.

No other matters or circumstances have arisen since the reporting date that may significantly affect the operations of the Company, the results of those operations, or the state of affairs in future financial years.

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the half-year ended 31 December 2020

 
                                                            6 months       6 months 
                                                                  to             to 
                                                         31 December    31 December 
                                                                2020           2019 
                                                                 AUD            AUD 
----------------------------------------------------   -------------  ------------- 
 
 Revenue from continuing operations 
 Revenue                                                           -            212 
                                                                   -            212 
 Exploration expenditure                                   (950,854)      (954,762) 
 Foreign exchange (loss)/gain                               (73,865)         38,362 
 Other expenses                                            (622,423)      (483,228) 
 Loss before income tax                                  (1,647,142)    (1,399,416) 
 Income tax (expense)/benefit                                      -              - 
                                                       -------------  ------------- 
 
 Net loss after income tax                               (1,647,142)    (1,399,416) 
                                                       -------------  ------------- 
 
 Other comprehensive income 
 Items that may be reclassified subsequently 
  to profit or loss: 
 Net exchange (loss)/gain on translation of foreign 
  operation                                                (285,969)         76,804 
 Other comprehensive (loss)/profit 
  for the period, net of tax                               (285,969)         76,804 
 
 Total comprehensive loss for the period                 (1,933,111)    (1,322,612) 
                                                       =============  ============= 
 
 
 Net (loss) for the period attributable 
  to shareholders of the Company:                        (1,647,142)    (1,399,416) 
                                                       -------------  ------------- 
                                                         (1,647,142)    (1,399,416) 
                                                       =============  ============= 
 
 Total comprehensive (loss) for the 
  period attributable to shareholders 
  of the Company:                                        (1,933,111)    (1,322,612) 
                                                       -------------  ------------- 
                                                         (1,933,111)    (1,322,612) 
                                                       =============  ============= 
 
 

(Loss) per share attributable to the ordinary equity holders of the Company

 
                                Cents per   Cents per 
   Loss per share                   share       share 
 
 - basic (loss) per share          (3.67)      (4.87) 
 
 - diluted (loss) per share        (3.67)      (4.87) 
 
 

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes in the full Half-Year Financial Report.

Consolidated Statement of Financial Position as at 31 December 2020

 
                                    31 December        30 June 
                                           2020           2020 
                                            AUD            AUD 
-------------------------------   -------------  ------------- 
 Current Assets 
 Cash and short term deposits         2,898,384        700,642 
 Trade and other receivables            227,489        210,866 
 Total Current Assets                 3,125,873        911,508 
                                  -------------  ------------- 
 
 Non-current Assets 
 Plant and equipment                     62,452         24,073 
 Other receivables                      188,229        193,096 
 Right of use assets                     29,277         39,035 
 Capitalised exploration              1,287,352      1,577,953 
 Total Non-current Assets             1,567,310      1,834,157 
                                  -------------  ------------- 
 
 Total Assets                         4,693,183      2,745,665 
                                  =============  ============= 
 
 Current Liabilities 
 Trade and other payables               289,481        207,462 
 Lease liabilities                       23,761         22,328 
 Total Current Liabilities              313,242        229,790 
                                  -------------  ------------- 
 
 Non-current Liabilities 
 Lease liabilities                        4,255         16,505 
 Borrowings                             121,708              - 
 Unearned income                        144,362              - 
 Total Non-current Liabilities          270,325         16,505 
                                  -------------  ------------- 
 
 Total Liabilities                      583,567        246,295 
                                  =============  ============= 
 
 NET ASSETS                           4,109,616      2,499,370 
                                  =============  ============= 
 
 Equity 
 Contributed equity                  45,695,893     42,489,962 
 Accumulated losses                (44,769,082)   (43,121,940) 
 Reserves                             3,182,805      3,131,348 
 TOTAL EQUITY                         4,109,616      2,499,370 
                                  =============  ============= 
 

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes in the full Half-Year Financial Report.

Consolidated Statement of Changes in Equity

for the half-year ended 31 December 2020

 
                                                                Employee 
                                                                 Share 
                                     Issued     Accumulated     Incentive    Option     Foreign Exchange      Total 
                                     Capital       Losses       Reserve      Reserve        Reserve          Equity 
                                      AUD           AUD           AUD          AUD            AUD              AUD 
--------------------------------  -----------  -------------  -----------  ----------  -----------------  ------------ 
 
 At 1 July 2019                    40,572,924   (40,759,280)      491,577   2,087,837            314,445     2,707,503 
                                  -----------  -------------  -----------  ----------  -----------------  ------------ 
 (Loss) for the period                      -    (1,399,416)            -           -                  -   (1,399,416) 
 Other comprehensive income (net 
  of tax)                                   -              -            -           -             76,804        76,804 
 Total comprehensive loss (net 
  of tax)                                   -    (1,399,416)            -           -             76,804   (1,322,612) 
 Transaction with owners in 
 their 
 capacity as owners 
 Shares issued net of 
  transaction 
  costs                             1,983,455              -            -           -                  -     1,983,455 
 Options issued to brokers           (66,417)              -            -      66,417                  -             - 
 At 31 December 2019               42,489,962   (42,158,696)      491,577   2,154,254            391,249     3,368,346 
                                  ===========  =============  ===========  ==========  =================  ============ 
 
 At 1 July 2020                    42,489,962   (43,121,940)      491,577   2,154,254            485,517     2,499,370 
                                  -----------  -------------  -----------  ----------  -----------------  ------------ 
 (Loss) for the period                      -    (1,647,142)            -           -                  -   (1,647,142) 
 Other comprehensive income (net 
  of tax)                                   -              -            -           -          (285,969)     (285,969) 
 Total comprehensive loss (net 
  of tax)                                   -    (1,647,142)            -           -          (285,969)   (1,933,111) 
 Transaction with owners in 
 their 
 capacity as owners 
 Shares issued net of 
  transaction 
  costs                             3,380,570              -      162,787           -                  -     3,543,357 
 Options issued to brokers          (174,639)              -            -     174,639                  -             - 
 At 31 December 2020               45,695,893   (44,769,082)      654,364   2,328,893            199,548     4,109,616 
                                  ===========  =============  ===========  ==========  =================  ============ 
 

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes in the full Half-Year Financial Report.

Consolidated Statement of Cash Flows for the half-year ended 31 December 2020

 
                                                  6 months to    6 months to 
                                                  31 December    31 December 
                                                         2020           2019 
                                                          AUD            AUD 
---------------------------------------------   -------------  ------------- 
 Cash flows from operating activities 
 Interest received                                          -            212 
 Payments to suppliers and employees                (416,600)      (410,400) 
 Payment for exploration and evaluation 
  costs                                             (886,241)    (1,067,242) 
 Net cash flows used in operating activities      (1,302,841)    (1,477,430) 
                                                -------------  ------------- 
 
 Cash flows from investing activities 
 Payments for plant and equipment                     (7,698)              - 
 Net cash flows used in investing activities          (7,698)              - 
                                                -------------  ------------- 
 
 Cash flows from financing activities 
 Lease principal repayments                          (13,229)       (28,429) 
 Proceeds from issue of shares                      3,597,214      2,214,032 
 Costs of capital raising                           (253,101)      (183,506) 
 Proceeds from borrowings                             260,617              - 
 Net cash flows from financing activities           3,591,501      2,002,097 
                                                -------------  ------------- 
 Net increase / (decrease) in cash 
  and cash equivalents                              2,280,962        524,667 
 Cash and cash equivalents at beginning 
  of period                                           700,642      1,052,411 
 Effect of foreign exchange on cash 
  and cash equivalents                               (83,220)         19,422 
                                                -------------  ------------- 
 Cash and cash equivalents at end of 
  the period                                        2,898,384      1,596,500 
                                                =============  ============= 
 

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes in the full Half-Year Financial Report.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR FDLFLFXLXBBZ

(END) Dow Jones Newswires

March 29, 2021 02:30 ET (06:30 GMT)