European Metals: Resource Upgrade at Cinovec Lithium Project to 708MT Including 53.3 MT of New Measured Resource

European Metals Holdings Limited (EMH, Company) (ASX & AIM: EMH, Nasdaq ADS: EMHXY) is pleased to announce final drill results and an upgaded mineral resource estimate for the lithium and tin resources in the Cinovec Lithium-Tin deposit in the Czech Republic.

The Company has recently completed a drilling campaign at Cinovec South, comprising 22 diamond drill core holes for 6,622 metres, with the goal of increasing resource certainty in the existing resource model in and around the initial planned mining areas and upgrading part of the resource from the Indicated category to the higher confidence Measured category.

Highlights

-         Re-classification of 53.3 million tonnes (MT) into Measured resource category grading 0.47% Li2O and 0.08% Sn.

-         28.5 MT of Inferred resource upgraded to Indicated resource category

-         The Measured and Indicated resource has increased from 372.4 to 413.4 MT @ 0.47% Li2O and 0.05%Sn.

-         The total Measured, Indicated and Inferred resources have increased by 12.3MT to 708.2MT @ 0.43% Li2O and 0.05% Sn (0.1% Li (0.2153% Li2O) Cut-off).

-         Increase in overall resource to 7.39 MT LCE

-         Analysis received for final 10 diamond core holes in the Geomet s.r.o. drilling program including:

• Hole CIS-16 returned 101.7m averaging 0.59% Li2O, incl. 11.35m @ 0.85% Li2O
• Hole CIS-32 returned 61m averaging 0.66% Li2O and 0.17% Sn, incl. 30.5m @ 0.30% Sn
• Hole CIS-33 returned 113.3m averaging 0.54% Li2O, incl. 14.7m @ 0.60% Li2O
• Hole CIS-34 returned 111.4m averaging 0.54% Li2O and 0.13% Sn, incl. 21.15m @ 0.71% Li2O and 0.57% Sn

European Metals Executive Chairman Keith Coughlan said, “The primary stated aim of this drilling program was to convert a larger portion of the resource to the measured category to provide greater certainty of the financial model and security to financiers. The results clearly indicate that the program has been successful and the robustness and consistency of the Cinovec resource further demonstrated. As we move closer to ultimate financing and offtake discussions, this higher degree of certainty provides more funding options for the project. Results from the final drill holes of the program have been in line with or better than expected.

As we have reported previously, because zinnwaldite is paramagnetic, wet magnetic separation,

the first stage of the ore processing has the effect of greatly increasing the grade of lithium oxide in the concentrate to approximately 2.85%. The zinnwaldite concentrate produced from Cinovec requires only roasting, compared to the calcination and roasting required of processing spodumene. This not only improves the economics, it will also have the effect of considerably reducing greenhouse gas emissions of the Project when compared to spodumene projects.”

MINERAL RESOURCE UPGRADE

Independent expert Lynn Widenbar of Widenbar and Associates updated the Mineral Resource Estimate, which has been prepared and reported in accordance with the 2012 Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code (2012)). Mr Widenbar has compiled all mineral resource estimates at Cinovec to date.

The resource was last updated based on data available in November 2017, using almost 800 historic underground and surface drill holes, historic underground channel sampling plus data from an additional 32 new diamond drill holes drilled by EMH (refer to the Company´s ASX release dated 28 November 2017).

An additional five holes have been drilled and assayed subsequently in 2018 (ASX releases dated 29 January 2019 and 28 February 2019) and have been incorporated in this new resource update together with the recently completed program of 22 diamond core holes (refer to the Company´s ASX releases dated 22 February 2021 and 6 May 2021 for previously reported results and to this announcement for further details on holes CIS-15 to 17, CIS 27 and CIS-31 to 36).

The resource classification has also been revised on the basis of the new data, interpretations and methodologies.

The Cinovec Project remains a potential low operating cost, hard rock lithium hydroxide producer, due to a number of key advantages:

-         By-product credits from the recovery of tin, tungsten, potash and sodium sulphate;

-         The ore is amenable to single-stage crushing and single-stage coarse SAG milling, reducing capital and operating costs and complexity;

-         Paramagnetic properties of zinnwaldite allow the use of low cost wet magnetic processing to produce a lithium concentrate for further processing at relatively high recoveries;

-         Relatively low temperature roasting at atmospheric pressure utilizing conventional technologies, reagent recycling and the use of waste gypsum; and

-         Low cost access to extensive existing infrastructure and grid power.

A summary of the updated Lithium Resource Estimate is presented in Table 1 below. The November 2017 estimate is presented in Table 2 for comparison. The increased drilling density in the southern area has allowed re-classification of 53.3 MTs of Indicated material to the Measured category. In addition, there has been an overall increase of 14.3 MT, almost all contained within Cinovec South. Inferred resources have decreased by 28.5Mt due to being reclassified to the higher confidence Indicated category as a result of tighter infill drill spacing.

Table 1: Cinovec Project Mineral Resource September 2021 (0.1% Li (0.2153% Li2O) Cut-off)

Notes:

1. Mineral Resources are not Reserves until they have demonstrated economic viability based on a feasibility study or prefeasibility study. 

2. Mineral Resources are reported inclusive of any reserves and are prepared by Widenbar in accordance with the guidelines of the JORC Code (2012). 

3. The effective date of the Mineral Resource is September 20, 2021.

4. All figures are rounded to reflect the relative accuracy of the estimate.

5. The operator of the project is Geomet s.r.o., 49% owned by EMH and 51% owned by CEZ a.s. Gross and Net resources attributable to Geomet s.r.o. are the same.

6. Any apparent inconsistencies are due to rounding errors.

7. MT is million tonnes.

8. LCE is Lithium Carbonate Equivalent and is equivalent to Li2CO3.

Table 2: Cinovec Project Mineral Resource November 2017 (0.1% Li (0.2153% Li2O) Cut-off)

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Resource Comparison over time

In the period since the first preliminary resource estimates were prepared for Cinovec, there has been a continuous increase in the overall resource and an increase in the confidence in the resource estimate as the understanding of the geology and mineralisation has improved, and as additional drilling has become available with the various EMH drilling campaigns.

Figure 1 Resource Tonnage vs Time

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BACKGROUND INFORMATION ON CINOVEC

PROJECT OVERVIEW

Cinovec Lithium/Tin Project

Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by European Metals and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS..

An initial Probable Ore Reserve of 34.5MT at 0.65% Li2O and 0.09% Sn reported 4 July 2017(Cinovec Maiden Ore Reserve – Further Information) has been declared based on stope optimizing model to cover the first 20 years mining at an output of 22,500tpa of lithium carbonate reported 11 July 2018 (Cinovec Production Modelled to Increase to 22,500tpa of Lithium Carbonate).

This makes Cinovec the largest hard rock lithium deposit in Europe, 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 for the extraction of tin.

In June 2019 EMH completed an updated Preliminary Feasibility Study, conducted by specialist independent consultants, which indicated a return post tax NPV of USD1.108B and an IRR of 28.8% and confirmed that the Cinovec Project is a potential low operating cost, producer of battery grade lithium hydroxide or battery grade lithium carbonate as markets demand. It confirmed the deposit is amenable to bulk underground mining. Metallurgical test-work has produced both battery grade lithium hydroxide and battery grade lithium carbonate in addition to 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.

There are no other material changes to the original information and all the material assumptions continue to apply to the forecasts.

CONTACT

For further information on this update or the Company generally, please visit our website at www.europeanmet.com or see full contact details at the end of this release.

WEBSITE

A copy of this announcement is available from the Company’s website at www.europeanmet.com.

ENQUIRIES:

European Metals Holdings Limited

Keith Coughlan, Executive Chairman

Email: [email protected]

Tel: +44 (0) 20 7440 0647

Kiran Morzaria, Non-Executive Director

Tel: +61 (0) 419 996 333

Dennis Wilkins, Company Secretary 

Email: [email protected]

Tel: +61 (0) 417 945 049

WH Ireland Ltd (Nomad & Joint Broker)

James Joyce/James Sinclair-Ford

(Corporate Finance)

Harry Ansell/Jasper Berry (Broking)

Tel: +44 (0) 20 7220 1666

Shard Capital (Joint Broker)

Damon Heath

Erik Woolgar

Tel:  +44 (0) 20 7186 9950

Blytheweigh (Financial PR)

Tim Blythe

Megan Ray

Tel: +44 (0) 20 7138 3222

Chapter 1 Advisors (Financial PR – Aus)

David Tasker

Tel: +61 (0) 433 112 936

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 authorised for the release of this announcement on behalf of the Company was Keith Coughlan, Executive Chairman.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Information included in this release constitutes forward-looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, and “guidance”, or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the company and its management’s good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company’s business and operations in the future. The company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the company’s business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company’s control.

Although the company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

LITHIUM CLASSIFICATION AND CONVERSION FACTORS

Lithium grades are normally presented in percentages or parts per million (ppm). Grades of deposits are also expressed as lithium compounds in percentages, for example as a percent lithium oxide (Li2O) content or percent lithium carbonate (Li2CO3) content.

Lithium carbonate equivalent (“LCE”) is the industry standard terminology for, and is equivalent to, Li2CO3. Use of LCE is to provide data comparable with industry reports and is the total equivalent amount of lithium carbonate, assuming the lithium content in the deposit is converted to lithium carbonate, using the conversion rates in the table included below to get an equivalent Li2CO3 value in percent. Use of LCE assumes 100% recovery and no process losses in the extraction of Li2CO3 from the deposit.

Lithium resources and reserves are usually presented in tonnes of LCE or Li.

The standard conversion factors are set out in the table below:

Table: Conversion Factors for Lithium Compounds and Minerals

COMPETENT PERSON’S STATEMENT 

Information in this report that relates to exploration results for CIS-15 to17, CIS-27 and CIS-31 to 36 is based on, and fairly reflects, information and supporting documentation prepared by European Metals Competent Person Dr Vojtech Sesulka. Dr Sesulka is a Certified Professional Geologist (certified by the European Federation of Geologists), a member of the Czech Association of Economic Geologist, and a Competent Person as defined in the JORC Code 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Sesulka has provided his prior written consent to the inclusion in this report of the matters based on his information in the form and context in which it appears. Dr Sesulka is an independent consultant with more than 10 years working for the EMH or Geomet companies. Dr Sesulka does not own any shares in the Company and is not a participant in any short or long term incentive plans of the Company.

The information in this release that relates to Mineral Resources and Exploration Targets is based on, and fairly reflects, information and supporting documentation prepared by Mr Lynn Widenbar. Mr Widenbar, who is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Australasian Institute of Geoscientists, is a full-time employee of Widenbar and Associates and produced the estimate based on data and geological information supplied by European Metals. Mr Widenbar has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the JORC Code 2012 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Mr Widenbar has provided his prior written consent to the inclusion in this report of the matters based on his information in the form and context that the information appears. Mr Widenbar does not own any shares in the Company and is not a participant in any short or long term incentive plans of the Company.