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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2.50 | 13.33% | 21.25 | 21.00 | 21.50 | 21.25 | 18.65 | 18.75 | 396,232 | 10:36:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Miscellaneous Metal Ores,nec | 1.12M | -5.93M | -0.0286 | -7.43 | 44.06M |
From Apr 2019 to Apr 2024
TIDMEMH
RNS Number : 2709U
European Metals Holdings Limited
11 July 2018
For immediate release
11 July 2018
EUROPEAN METALS HOLDINGS LIMITED
CINOVEC PRODUCTION MODELLED TO INCREASE TO 22,500 TPA
OF LITHIUM CARBONATE
European Metals Holdings Limited ("European Metals" or "the Company") (ASX & AIM: EMH) is pleased to report that it has completed roast optimisation testwork and that improved recoveries have resulted in modelled lithium carbonate production from the Cinovec Lithium-Tin Project ("the project" or "Cinovec") increasing to 22,500 tpa.
HIGHLIGHTS
Hot Features
Premium
* Average lithium carbonate production is modelled to
increase from 20,800 tpa to 22,500 tpa due to
improved recoveries in the leach circuit of 94% being
modelled.
* Increased lithium production results in increased
cash margins of approximately 10%.
* Proposed use of low cost waste gypsum from local
power plants as a roasting reagent is a significant
positive environmental outcome for the region and a
reagent cost benefit to the project.
* Locked cycle testing and larger scale roasting
technology confirmation work to commence imminently.
* Preparation of 2 tonnes of lithium concentrate via
magnetic separation for lithium carbonate pilot plant
trials almost complete.
All recent roast/leach tests have reliably achieved lithium extractions in the region of 94% recovery. The significance of these results is that a 7% increase in lithium recovery is predicted over that used in the Preliminary Feasibility Study ("PFS") completed last year which in turn would lead to an increase to 22,500tpa of lithium carbonate production from the project.
This modelled increased production would result in approximately a 10% increase in EBITDA margins for the project which will have obvious positive effects to the project returns which the definitive feasibility study will re-model.
Whilst achieving these excellent results the Company is pleased to report that the optimised reagent mix developed during the testwork as compared to that reported in the PFS has seen the elimination of all high cost inputs to the roast predicted previously. The mix now contains a higher proportion of gypsum but the gypsum takes the form of a waste material sourced from the scrubbing of power station off gases. The sample used during the development of this reagent regime was sourced from a power station in the region. Current indications are that this material would be available at a highly competitive price.
The PFS also predicted the use of hydrated lime and sodium sulphate as relatively high cost reagents to the process, all of which have now been eliminated and replaced by the waste gypsum described, as well as a small addition rate of limestone which can also be sourced at competitive prices in the nearby regions.
A further development to report is that the current roasting conditions has shown that the sodium sulphate produced through the lithium carbonate precipitation ("LCP") can be recycled back to the roast feed and no surplus sodium sulphate is expected to be produced. The Company considers the sale or disposal of sodium sulphate may have been challenging.
These developments have enabled European Metals to initiate the next two phases of testwork. Firstly, involving locked cycle testing to confirm the flowsheet all the way through to the production of battery grade lithium carbonate and secondly, to enable larger scale roasting proof of technology testing to be completed in the next few months. The Company will also undertake the production of lithium hydroxide during the latter phase.
Pilot scale beneficiation testwork has continued since our last update on 6 June 2018 and is almost complete. Approximately 15 tonnes of ore is being crushed, ground and magnetically separated to produce approximately 3 tonnes of lithium concentrate that will be available before the end of July 2018 for the planned pilot scale testwork to be completed subsequent to the locked cycle and roasting confirmation tests.
European Metals MD Keith Coughlan commented "Proven increased lithium production through increased recoveries will result in an increased cash margin for the project. Our PFS indicated the potential of Cinovec to be a bottom half cost producer and an improvement on that will indeed be significant. The work that we have been undertaking during this period has been, and will continue to be, aimed at de-risking the flowsheet and elimination of flowsheet options prior to the commencement of what will then be an efficient Definitive Feasibility Study engineering phase.
The Company is also very pleased to note the recent political developments within Czech Republic and the imminent formation of a coalition government. We look forward to engaging with the new Government to advance the project to the 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 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 to Convert to Convert to Li(2)
Li Li(2) O CO(3)
------------------- ------- ----------- ----------- -----------------
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 indices" Indicies that provide an assessment 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 separation" is based on the fact that different 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" or "Indicated as defined in the JORC and SAMREC Codes,
Mineral Resource" is that part of a Mineral 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 "Inferred as defined in the JORC and SAMREC Codes,
Mineral Resource" is that part of a Mineral 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 Limited Tel: +61 (0) 419 996 333 Keith Coughlan, Managing Director Email: keith@europeanmet.com Kiran Morzaria, Non-Executive Tel: +44 (0) 20 7440 0647 Director Tel: +61 (0) 8 6245 2057 Julia Beckett, Company Secretary Email: julia@europeanmet.com Beaumont Cornish (Nomad & Tel: +44 (0) 20 7628 3396 Broker) Email: corpfin@b-cornish.co.uk Michael Cornish Roland Cornish Joint Broker Tel: +44 (0) 20 7186 9950 Damon Health Erik Woolgar Shard Capital
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. The person who arranged for the release of this announcement on behalf of the Company was Keith Coughlan, Managing Director.
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, * Between 2014 and 2017, the Company commenced a core
random chips, or specific specialised industry drilling program and collected samples from core
standard measurement tools appropriate to the splits in 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.In 2017, siz core
other type, whether core is oriented and if so, by holes were drilled for a total of 2697.1m.
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 and
2017 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 2014-2017, 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 2014-17, 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 and 2017 larger core was cut
in half and one half was cut again to obtain a
* If non-core, whether riffled, tube sampled, rotary quarter core sample. One half or one quarter samples
split, etc and whether sampled wet or dry. was delivered to ALS Global for assaying after
duplicates, blanks and standards were inserted in the
sample stream. The remaining drill core is stored on
* For all sample types, the nature, quality and site for reference.
appropriateness of the sample preparation technique.
* Sample preparation was carried out by ALS Global in
* Quality control procedures adopted for all Romania, using industry standard techniques
sub-sampling stages to maximise representivity of appropriate for the style of mineralisation
samples. represented at Cinovec.
* Measures taken to ensure that the sampling is * Historically, core was either split or consumed
representative of the in situ material collected, entirely for analyses.
including for instance results for field
duplicate/second-half sampling.
* Samples are considered to be representative.
* Whether sample sizes are appropriate to the grain
size of the material being sampled. * Sample size and grains size are deemed appropriate
for the analytical techniques used.
--
Quality of
assay data * The nature, quality and appropriateness of the * In 2014-17, 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 2014-17 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 2014-17, 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 2014-17, 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 2014-17 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 listed in section 1 also apply to this section.)
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 2016-17 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 listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria JORC Code explanation Commentary
Database
integrity * Measures taken to ensure that data has not been * 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 10m (E-W) by 10m (N-S) by 5m
* Validation of the final resource has been carried out
in a number of ways including section comparison of
data versus model, 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 material
spaces (vugs, porosity, etc), moisture and
differences between rock and alteration zones within
the deposit.
* Discuss assumptions for bulk density estimates used
in the evaluation process of the different materials.
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 2016-17 drilling has confirmed the
Tin mineralisation model and a part of this area has
* Whether the result appropriately reflects the been 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 2016-17 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.
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