TIDMEUZ
RNS Number : 3039V
Europa Metals Ltd
13 December 2021
13 December 2021
Europa Metals Ltd
("Europa Metals", the "Company" or the "Group") (AIM, AltX:
EUZ)
Successful Completion of Hydrogeological Programme
- Toral Pb, Zn & Ag Project, Spain
Europa Metals, the European focused lead, zinc and silver
developer, is pleased to announce the successful completion and
results of an independent hydrogeological study on its wholly owned
Toral lead, zinc and silver project, Castilla y León, Spain
("Toral" or the "Toral Project"). The progression of the requisite
hydrogeological assessments and monitoring programmes forms a key
part of de-risking the Toral Project for the potential future
development of an underground lead, zinc and silver mining
operation.
Highlights
-- Independent hydrogeological study commissioned from CRS
Ingenieria now concluded following a 5 month programme
-- Objective was to assess water conditions and drainage
relating to the potential future development of the Toral
Project
-- Bore hole and piezometer programme involved a series of
pumping tests and live monitoring utilising indicator dyes to
assess sub-surface water flows and rates
-- Results are in line with the hydrogeological conditions
assumed within the Company's existing planned development model for
a potential underground lead, zinc and silver mine at Toral (please
refer to the Appendix below for Bara Consulting/AMS' previously
reported preliminary economic study highlights)
-- Piezometers continue to monitor water levels in line with the
Company's ongoing compliance with hydrogeological regulations
within the region and Spain
The independent study was commissioned from, and carried out by,
CRS Ingenieria ( www.crsingenieria.es ), and has now been concluded
following an extensive testing programme undertaken over a 5 month
period encompassing a central bore hole and a series of water
monitoring piezometers. Data recovery and logging utilised a series
of indicator dyes released into the water system at various points
with subsequent monitoring their presence across a network of
piezometers across the deposit. Using the hydrogeological software
module of Rocscience Inc.'s RS2 software, three levels or horizons
have been modelled in the karst system, each being assigned a
permeability based on the results obtained from the pumping tests
(2021) and utilisation of a conceptual model of the system.
The study's findings allow Europa Metals to establish an initial
understanding of the approximate underground connectivity, flow and
permeability within the head area and central area of the
system.
Figure 1: location of bore hole and piezometer monitoring
stations
http://www.rns-pdf.londonstockexchange.com/rns/3039V_1-2021-12-10.pdf
Key Findings
The pumping tests reinforced the current hydrogeological model
for the Toral Project in terms of the variation of permeability at
depth from previous tests. Accordingly, it has facilitated the
evaluation of, and estimation of a range of permeability for, the
epiphreatic zone (non-saturated) and the shallow phreatic
(saturated) in a central area of the system, almost 1km from the
river (discharge) and approximately 0.8km from the headwaters.
The hydraulic connections (established through dyes released at
injection wells) between hole TOD-018 and the wells located along
the carbonated outcrop (TOP-026, TOP-027, TOD-023 and P-16) and the
Sil River have now been assessed, with a clear flow line between
the head area (TOD-018) of the system and its discharge into the
river. The hydraulic connection of the P-11 well with the Sil River
has also been verified.
These connections establish the entire route of the underground
flow, from the head areas to the discharge zone, thereby validating
the structure and operation of the proposed conceptual underground
mining development model as outlined by Bara Consulting in the
Company's announcement of 18 November 2020.
Programme detail
The detection of fluorescein in the TOP-027 well enables Europa
Metals to evaluate the flow rate between this well, located in the
central area of the system, and the Injection Well (at hole
TOD-018), a distance of 785m away.
It took 22 days for the first fluorescein to reach the pumping
well (TOP-026) and a further 6 days for it to reach peak
concentration. Accordingly, the transit speed of the underground
flow is approximately 30-36m/day. Such speed is relatively slow
compared to other modelled karst systems and suggests extensive
development of functional caverns and flows in free circulation.
Consequently, the live well results correspond to the
characteristic speeds associated with those of a typical low-medium
karstification and corresponding flows within the saturated zone.
This supports and reinforces the historical data obtained from
previous tests and strengthens the Company's proposed
hydrogeological model for Toral.
Commenting today, Laurence Read, CEO of Europa Metals, said
:
"Following an extensive hydrogeological campaign, I am delighted
to report the findings of CRS Ingenieria's independent study, which
fall within the parameters of those previously modelled and
established for Toral. This represents a step forward for the
project with a responsible and appropriate water strategy,
accredited by third parties and adhering to best practice regional
regulations and federal Spanish law .
"Our work relating to hydrogeology and the local environment is
ongoing, but this study supports our decision to press ahead with
the planned 2022 drilling campaign. This campaign will commence in
the New Year and involve both resource drilling and a series of
shallow geotechnical drilling. The geotechnical component will be
designed to assess the suitability of ground conditions for plant
site infrastructure as well as the suitability of local disused
quarry sites, which in turn could form part of a reclamation
strategy following consultation with local community groups, by way
of filling in areas with inert waste material from crushing during
future production activities and then landscaping the areas
concerned."
For further information on the Company, please visit:
www.europametals.com
Linkedin: Europa Metals ltd
Twitter: @ltdeuropa
Vox: Europametals
or contact:
Europa Metals Ltd
Dan Smith, Non-Executive Director and Company Secretary
(Australia)
T: +61 417 978 955
Laurence Read, CEO (UK)
info@europametals.com
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 (0)20 7409 3494
WH Ireland Limited (Joint Broker)
Harry Ansell/Dan Bristowe/Katy Mitchell/Sarah Mather
T: +44 (0)20 7220 1666
Turner Pope Investments (TPI) Limited (Joint Broker)
Andy Thacker/James Pope
T: +44 (0)20 3657 0050
Questco Corporate Advisory Proprietary Limited
Sharon Owens
T: +27 (11) 011 9212
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 Union
(Withdrawal) Act 2018, as amended.
Notes to Editors :
Appendix: Further information on the Toral Project
The pre-existing Inferred and Indicated resource for the
Pb-Zn-Ag mineralisation located on the Toral property, licence
number 15.199, has been independently estimated at various
cut-offs. For the Toral deposit's resource, the economic cut-off
was determined by calculation of block revenue factors based on Zn
equivalent calculations derived from an historical three-year
trailing average for Zn, Pb and Ag prices. Indicative mining and
processing costs derived from a 2020 scoping study and typical of
the region and deposit type were applied along with typical mining
recovery and dilution factors and metallurgical recovery factors
identified from laboratory studies and production at comparable
third party deposits and accepted by Addison Mining Services
Limited ("AMS"). For reporting purposes in compliance with JORC
(2012), an economic cut-off grade of 4% Zn equivalent (including Pb
and Ag credits) was selected in consideration of the aforementioned
factors and allowing for some increase in commodity prices in order
to define resources with a reasonable prospect of eventual economic
extraction.
The latest Mineral Resource Estimate commissioned from AMS and
effective as of 14 September 2021 for the Toral deposit
comprised:
-- An Indicated resource of approximately 5.9Mt @ 7.1% Zn
Equivalent (including Pb credits)*, 4.2% Zn, 3.3% Pb and 27g/t Ag,
including:
o 251,000 tonnes of zinc, 196,000 tonnes of lead and 5.2 million
ounces of silver.
-- An Inferred resource of approximately 14Mt @ 6% Zn Equivalent
(including Pb credits), 3.8% Zn, 2.5% Pb and 20 g/t Ag,
including:
o 540,000 tonnes of zinc, 350,000 tonnes of lead and 9 million
ounces of silver.
-- A total resource of approximately 20Mt @ 6.3% Zn Equivalent
(including Pb credits), 3.9% Zn, 2.7% Pb and 22 g/t Ag,
including:
o 790,000 tonnes of zinc, 550,000 tonnes of lead and 14 million
ounces of silver.
* - Zn Eq (PbAg)% is the calculated Zn equivalent incorporating
silver credits as well as lead and is the parameter used to define
the cut-off grade used for reporting resources (Zn Eq (PbAg)% = Zn
+ Pb*0.867 + Ag*0.027). 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$2,516/t, Pb price of US$1,961/t and Ag price
of US$19.4/oz. Recovery and selling factors were incorporated into
the calculation of Zn Eq values. It is the Company's opinion that
all the elements included in the metal equivalents calculation
(zinc, lead and silver) have a reasonable potential to be recovered
and sold.
Highlights from Bara Consulting/AMS' 2020 Independent
Preliminary Economic Study
Based on a previous mineral resource estimate, the key findings
of an independent preliminary economic study commissioned from Bara
Consulting and AMS and announced by the Company on 18 November 2020
were as follows:
-- US$156m NPV at an 8% discount rate
-- 31.3% IRR
-- 17Mt @ 6.7% ZnEq (including Pb credits) resource (JORC 2012)
including indicated resource of 3.8Mt @ 8.1% ZnEq (including Pb and
Ag credits) - 4% cut off grade
-- Sub-Level Longhole Stoping ("SLOS") mining method
selected
-- 700k tonnes per annum operation with a 7.6% ZnEq mined
grade:
o SLOS with ramp/raise-bore shaft access;
o 10% dilution;
o 3.5m average mined mineralised widths
-- Processing comprises an ore sorting front-end using X-ray
Transmission ("XRT") followed by grinding and flotation
-- Grade/recovery: 3.3% Pb/87%; 4.2% Zn/86%; 26.7g/t Ag/85%
-- US$79m upfront Capex
-- 3-year trailing average metals prices of US$2,668/t for zinc,
US$2,099/t for lead and US$16.5/oz for silver
-- US$963m Revenue over Life of Mine ("LOM")
-- US$477m Opex over LOM
-- US$471m EBITDA over LOM
-- 49% Operating Margin (US$63.56/t all-in cost)
-- 12-year LOM scenario
-- Conceptual LOM production schedule incorporates 100% of the
existing Indicated resource in the early years, ending with
elevated zinc grades in the deep Inferred zones
-- Deposit open to the east and at depth for potential
production expansion during the mine's life
-- Project's 3-year Investigation Permit renewed until 15
November 2023
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END
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December 13, 2021 01:59 ET (06:59 GMT)
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