European Metals Holdings Limited has told DirectorsTalk about continued progress in the development of its 100% owned globally significant Cinovec Lithium/Tin Project in Czech Republic during the three month period ending December 2016.
PRODUCTION OF BATTERY GRADE LITHIUM CARBONATE
The Company announced just prior to Christmas the successful manufacture of >99.5% pure lithium carbonate using an industry proven, sodium sulphate roast-based flow-sheet from mica-concentrate from the Cinovec Project.
This was a significant development in the progress of the Company’s Preliminary Feasibility Study. The highlights of the announcement were:
* Production of >99.5% battery grade lithium carbonate;
* High roast recoveries of 87% achieved;
* Reduced process costs - key reagent recycled;
* Minimal leaching of unwanted impurities, resulting in
simpler precipitation of battery grade lithium
carbonate; and
* Offtaker and end user testing - production of lithium
carbonate samples underway.
The roasting flow-sheet reflects a simplified version of the well-proven technology that converts spodumene concentrate to lithium carbonate. Numerous lithium carbonate plants currently employ this technology internationally.
The sodium sulphate flow-sheet is similar to the well proven Chinese sulphation roast but instead of using acid for leaching the concentrate, sodium sulphate is used and recycled back to the roast. This technology uses far less reagents and is less complex, lower cost and more environmentally friendly as it does not produce unwanted by-products. An additional benefit of this process, other than the minimal use of reagents and elimination of acid usage, is that its chemical conditions are milder, which is expected to translate into lower costs compared with the sulphation processes.
420% INCREASE IN INDICATED LITHIUM RESOURCE
In November 2016, the Company announced an interim upgrade of its Mineral Resources at the Cinovec lithium/tin project. The upgrade delivered a 420% increase in Indicated Mineral Resources, which, when combined with the Inferred Mineral Resources, resulted in a total resource of an estimated 6.46Mt of LCE. The significant increase in the indicated portion of the Mineral Resource, and the resource in total, will have a positive impact for mine planning and the life of mine. In particular, the Mineral Resource will allow management to optimise the mine plan and maximise Cinovec’s financial returns and further progress in the ongoing prefeasibility study, which is due for completion at the end of March. The lithium (“Li”) and tin (“Sn”) resources were updated using data from the latest drill holes released to market over the previous 5 months. Resource classifications were revised on the basis of the new data. The highlights of the upgrade were:
* Lithium Indicated Resource increased 420% to 2.6 Mt
LCE, contained in 232.8 Mt @ 0.45% Li2O (0.1% Li
cutoff);
* Lithium Total Resource increased 11.8% to 6.46 Mt LCE,
contained in 606.8 Mt @ 0.43% Li2O (0.1% Li cutoff);
* Tin Indicated Resource increased by 64% to 28.6 Mt @
0.23% Sn, 0.54% Li2O (0.1% Sn cutoff) for 65.8 kt Sn,
0.38 Mt LCE; and
* Lithium Exploration Target remains 350 to 450 Mt @
0.39% to 0.47% for 3.4 Mt to 5.3 Mt of LCE.
OUTSTANDING LITHIUM RECOVERIES
During the quarter, the Company announced the completion of the concentration testwork for lithium as part of the Preliminary Feasibility Study. The testwork improved recoveries significantly from those used in the scoping study which when combined with the lower operating costs of wet magnetic separation versus flotation will significantly boost the economics of the project.
The key points of the testwork were:
* Lithium recoveries 10-15% higher than those achieved
via floation in the scoping study;
* Coarse grind of p100 passing 250 micron reduces
milling power consumption substantially;
* Wet magnetic separation plant has a smaller footprint
and water demand than flotation;
* Reduced operating cost and lower environmental impact
as no need to import expensive reagents; and
* The ore is suitable for a single stage jaw crush and
SAG mill which further decreases operating and
capital costs.
CONTINUED POSITIVE RESULTS FROM DRILLING PROGRAMME INCLUDING CONFIRMATION OF SHALLOW LITHIUM MINERALISATION
The Company released 3 drilling results updates during the quarter which included the confirmation of significant shallow lithium mineralization. All drilling updates and the analytical results from all drillholes were positive and have added to the understanding of the Cinovec ore body.
The dates of the releases were 6 October 2016, 8 November 2016 and 15 November 2016.
Of particular interest is the significant lithium mineralization intersected from less than 30m depth in a number of drill holes, these are the shallowest intervals to-date.
CAPITAL RAISING
The Company announced that it raised $3 million from its largest shareholder, Rare Earth Minerals Plc (“REM”) via the combination of a placement and the exercise of options. The placement was subject to shareholder approval which was granted at the Company’s Annual General Meeting held on 18 November 2016. The capital raising has taken REM’s relevant interest in European Metals to 20.92%.
NEW EXPLORATION LICENSE
The Company announced at the end of October 2016 that it had been granted a new exploration license Cinovec III. The new Cinovec III license fills the gap between the Company’s license Cinovec II and the Czech-German border over the northern part of the Cinovec deposit, and extends east, adjoining the Company’s Cinovec II license area. The aerial extent of the Cinovec III license is 6.8 km2 and it covers geologically prospective area to the east of the Cinovec deposit, with prospects of discovering and developing additional lithium and tin ore.
The best lithium intercept recorded in historic drilling is 82.8m averaging 0.31% Li2O, starting at depth of 585m. The potential lithium mineralization east of Cinovec is blind; historic scout drilling identified greisenized and lithium mineralized granite at depths of 500 meters below surface.
DEVELOPMENTS POST REPORTING PERIOD
Drill Program Completed & Appointment of Czech Country Manager
The planned core drillhole programme was completed in mid-January 2017 on time and on budget and without time loss incidents. In total 17 drillholes were drilled to a summary depth of 6,081 meters.
Analytical results for the further two drillholes that were released at the same time confirmed or exceeded the expected lithium content and mineralization widths.
When the final results of the drilling program are received, the Company will upgrade the block model and finalise the resource estimate for the Preliminary Feasibility Study. Further conversion of inferred to indicated resources is expected as part of this re-modelling.
The Company also announced the appointment of Richard Pavlik, a highly experienced mining executive to the role of Country Manager.
Mr Pavlik holds a Masters Degree in Mining Engineer from the Technical University of Ostrava in Czech Republic. He is the former Chief Project Manager and Advisor to the Chief Executive Officer at OKD. OKD has been a major coal producer in the Czech Republic. He has almost 30 years of relevant industry experience in the Czech Republic. Mr Pavlik also has experience as a Project Analyst at Normandy Capital in Sydney as part of a postgraduate programme from Swinburne University. Mr Pavlik has held previous senior positions within OKD and New World Resources as Chief Engineer, and as Head of Surveying and Geology. He has also served as the Head of the Supervisory Board of NWR Karbonia, a Polish subsidiary of New World Resources (UK) Limited. Mr Pavlik’s primary responsibilities will be to manage the in-country aspects of the Cinovec development programme, coordinate technical work and liaise with Government authorities on permitting and licensing of the project.
SUMMARY
It has been another very productive quarter for European Metals with a number of key and very positive developments. These developments indicate significant enhancements to the economics of the Cinovec Project. The Company believes that these enhancements will be positively reflected in the Preliminary Feasibility Study which is nearing completion.
Macro conditions in the lithium industry also continue to move positively.
BACKGROUND INFORMATION ON CINOVEC
PROJECT OVERVIEW
Cinovec Lithium/Tin Project
European Metals owns 100% of the Cinovec lithium-tin deposit in the Czech Republic. Cinovec is an historic mine incorporating a significant undeveloped lithium-tin resource with by-product potential including tungsten, rubidium, scandium, niobium and tantalum and potash. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 232.8 Mt @ 0.45% Li(2) O and a total Mineral Resource of 606.8 Mt @ 0.43% Li(2) O containing a combined 6.46 million tonnes Lithium Carbonate Equivalent.
This makes Cinovec the largest lithium deposit in Europe and the fourth largest non-brine deposit in the world.
Within this resource lies one of the largest undeveloped tin deposits in the world, with total Indicated Mineral Resource of 28.6 Mt @ 0.23% Sn and a total Mineral Resource of 70.5 Mt grading 0.20% Sn for a combined total of 141.2 kt of contained tin. The Mineral Resource Estimates have been previously released on 23 November 2016. The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining operation.
A Scoping Study conducted by specialist independent consultants indicates the deposit could be amenable to bulk underground mining. Metallurgical test work has produced both battery grade lithium carbonate and high-grade tin concentrate at excellent recoveries with the Scoping Study. 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.
CONTACT
For further information on this update or the Company generally, please visit our website at www.europeanmet.com or contact:
Mr. Keith Coughlan
Managing Director
