TIDMEUZ
RNS Number : 0807C
Europa Metals Ltd
13 June 2019
13 June 2019
Europa Metals Ltd
("Europa Metals", the "Company" or the "Group") (AIM, AltX:
EUZ)
Drilling Update for the Toral Project, Spain
Summary
-- Drill hole 1 (TOD-021) terminated at the Company's
instruction following a substantial deviation in trajectory:
- Europa Metals' technical team instructed the drilling
contractor to terminate the hole at a depth of 652.90m.
- Upper zone mineralisation intersected but above the targeted
high-grade zone; consequently drill hole 1 will not be used to
secure a metallurgical sample for testwork.
- Mineralisation encountered in the upper zone will be assayed and reported on in due course.
- Drilling performance review initiated and hole 2 commenced.
-- Drill hole 2 (TOD-022) commenced on 11 June 2019:
- Target depth of 750 metres, targeting the high-grade zone.
- Completion anticipated by end of July 2019.
Europa Metals, the European lead-zinc explorer, announces that
it has instructed its drilling contractor, Sondeos y Perforaciones
Industriales de Bierzo SA ("SPI"), to terminate its drilling of the
first hole (TOD-021) following a significant trajectory deviation
at the Company's wholly owned Toral lead-zinc-silver project
("Toral" or the "Project") located in the Province of León,
northern Spain.
Hole TOD-021 has been terminated at a depth of 652.90 metres, as
a result of a deviation of the hole during drilling operations away
from its designated target, being the high-grade zone of the
existing defined resource. The deviation took the hole above its
planned high-grade zone target and it will not therefore be used to
secure a metallurgical sample. Mineralisation was encountered at
TOD-021 and will be assayed and reported on in due course.
Commencement of Hole TOD-022
Europa Metals has initiated a performance review process with
SPI in respect of the drilling and termination of hole TOD-021. A
series of initiatives and procedural changes have been implemented
prior to the commencement of SPI drilling the second hole in the
current campaign, TOD-022. The target depth of TOD-022 is 750
metres, extending into the Project's high grade mineralisation. The
Company anticipates the completion of hole TOD-022 by the end of
July 2019 and further updates will be made in due course as
appropriate.
Commenting today, Laurence Read Executive Director of Europa
Metals, said:
"TOD-021 has been terminated at the Company's instruction due to
a deviation in the hole's trajectory. The Europa Metals' team has
initiated a performance review with SPI and a new, second hole, has
been commenced targeting the high-grade zone at Toral. Our
objectives from this ongoing drill campaign continue to be the
retrieval of a significant mineralised sample for metallurgical
testwork, in order to determine concentrate product types, and the
definition of an initial indicated resource estimate for the
Project."
For further information on the Company, please visit
www.europametals.com or contact:
Europa Metals Ltd
Dan Smith, Non-Executive Director and Company Secretary
(Australia)
T: +61 417 978 955
Laurence Read, Executive Director (UK)
T: +44 (0)20 3289 9923
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 (0)20 7409 3494
Turner Pope Investments (TPI) Limited (Joint Broker)
Andy Thacker
T: +44 (0)20 3621 4120
Brandon Hill Capital (Joint Broker)
Jonathan Evans/Oliver Stansfield
T: +44 (0)20 3463 5000
Sasfin Capital Proprietary Limited (a member of the Sasfin
group)
Sharon Owens
T (direct): +27 11 809 7762
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.
Notes to Editors:
The core objectives of the current drilling campaign (initiated
in May 2019) are as follows:
1. Drill into the higher-grade core of the Project, as defined
within the existing Inferred JORC (2012) resource estimate;
2. Target high grade areas within the defined resource to
further the Company's understanding of the Project, with the aim of
increasing confidence in the resource estimate to delineate a
portion of the deposit into the Indicated resource category;
and
3. Obtain a significant sample for metallurgical testwork by
independent consultants to determine the potential Zn, Pb and Ag
concentrate composition from Toral. This will provide additional
data to assist process plant design and discussions with potential
offtake parties.
Rig mobilisation
The rig and associated operating crew is being supplied by
Sondeos y Perforaciones Industriales de Bierzo SA and is being
overseen by the Company's on-site exploration team. The campaign is
being conducted using a single drilling rig with assays sent for
independent analysis on a rolling basis.
Addison Mining Services Limited ("AMS") has been retained to
carry out a revised independent resource estimate update in
accordance with JORC (2012) once the campaign has been
concluded.
Wardell Armstrong LLP has been engaged to conduct the
metallurgical testwork from a representative sample taken from the
drilling.
Economic highlights from the Company's selected development
scenario
Estimated economic forecasts for Toral based on the current
level of work (+/-30%) from the Scoping Study (December 2018)
comprise:
-- US$110 million net present value (NPV) using a discount rate of 8%;
-- 24.4% internal rate of return (IRR);
-- Estimated US$33 million CAPEX for a proposed 450ktpa design
capacity plant, including associated auxiliary costs, with
infrastructure being situated near portal entrance on the north
side of the deposit;
-- Estimated total CAPEX of US$110 million;
-- US$25 per tonne indicative OPEX processing cost at steady state conditions;
-- US$36 per tonne indicative OPEX mining cost utilising mechanised cut and fill; and
-- 15-year production plan, with significant potential for extension.
Basis for announcing economics
The factors that lead the Company to believe that it has a
reasonable basis for announcing a production target and forecast
financial information are detailed in the Scoping Study and can be
summarised as follows:
Three conceptual underground mining development and production
scenarios were considered and developed throughout the Scoping
Study, resulting in the identification of a preferred scenario,
highlights from which are set out below:
-- decline ramp access to the north of the deposit, targeting
mine production within the higher-grade core towards the centre of
the planned mining blocks
-- entry to mine via a principal decline reaching various levels
-- series of internal mining inclined ramps constructed to access levels
-- mechanised cut and fill (MCAF) mining method proposed
-- 4x4 metre mine standard development size
-- a ventilation raise would be drilled (raise-bored) to provide
both adequate ambient conditions underground and a second,
emergency means of access/egress into the mine
-- ore transported to a flotation process plant by conveyor or
haul truck from the mine and crushed to a suitable product for
milling
-- milled ore floated by standard flotation technology to
provide lead and zinc concentrate, with silver probably reporting
to the lead concentrate for sale as a combined product
-- 4% Zn Eq cut-off used with potential for mine life extension.
JORC (2012) resource estimate
The Scoping Study was based on a previously announced JORC
(2012) resource estimate comprising 16 million tonnes in the
Inferred category, @ 7.5% Zn equivalent (Pb, Ag), 3.9% zinc, 3.1%
lead and 24g/t silver equating to 640,000 tonnes of zinc, 510,000
tonnes of lead and 13 million ounces of silver*.
4% Zn Tonnes Density Zn Zn Eq Zn Pb Ag Contained Contained Ag
Eq (PbAg)% (Millions) g/cm(3) Eq (PbAg)% % % g/t Zn Tonnes Pb Troy
(Pb)% (000s) Tonnes Oz
(000s) (Millions)
December
2018
Resource 16 2.8 7 7.5 3.9 3.1 24 640 510 13
------------ --------- ------- --------- ---- ---- ----- ----------- ---------- ------------
*Zn Eq (PbAg)% is the calculated Zn equivalent incorporating
silver credits as well as lead; (Zn Eq (PbAg)% = Zn + Pb*0.96 +
Ag*0.022). 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$2,500/t, Pb price of US$2,100/t and Ag price of US$17/oz.
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END
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