SUBSTANTIAL INCREASE IN INDICATED RESOURCE AT CINOVEC
European Metals Holdings Limited (“European Metals” or “the Company”) is pleased to announce a substantial upgrade of its JORC compliant Indicated Mineral Resource at the Company’s 100% owned Cinovec Lithium/Tin Project in the Czech Republic, confirming its status as the largest Lithium resource in Europe
The Company has recently completed an extensive seven-month drilling campaign at Cinovec, consisting of 17 holes for 6,081 meters designed to increase the confidence in the resource base and to upgrade a significant part of the resource from the Inferred category to the higher confidence Indicated category.
- Lithium Indicated Resource increased 50% to 3.9 Mt LCE, contained in 347.7 Mt @ 0.45% Li2O and 0.04% Sn (0.1% Li cutoff)
- Lithium Total Resource increased 11.8% to 6.99 Mt LCE, contained in 656.5 Mt @ 0.43% Li2O and 0.04% Sn (0.1% Li cutoff)
- Total contained tin in the Total Mineral Resource increases to 262,600 tonnes
- Lithium Exploration Target remains 350 to 450 Mt @ 0.39% to 0.47% for 3.4 Mt to 5.3 Mt of LCE.
European Metals Managing Director Keith Coughlan said, “Cinovec is a globally significant lithium deposit. Its location on the German-Czech Republic border places it in very close proximity to the largest car manufacturers in Europe and is in an unique position to supply lithium to the rapidly growing European electric vehicle industry.
The substantial increase in the higher confidence indicated resources in both contained lithium and in valuable by-product tin provides more certainty that European industry will be able to source locally produced lithium in a secure and stable environment.”
Independent Resource Consultant Lynn Widenbar noted, “The additional new drilling results from 2016 have greatly increased confidence in the historic surface and underground drilling and sampling, resulting in a substantial amount of previously Inferred material being re-classified as Indicated. The additional drilling has also enabled the two main value elements of lithium and tin to be combined in one complete model that covers the entire mineralisation at the Cinovec deposit”
The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Mineral Resource Upgrade
Independent expert Lynn Widenbar of Widenbar and Associates updated the Mineral Resource Estimates. Mr Widenbar has compiled all resource estimates at Cinovec to-date.
Table 1: Cinovec Project Mineral Resource Estimate February 2017 (0.1% Li Cutoff)
1. Mineral Resources are not reserves until they have demonstrated economic viability based on a feasibility study or pre-feasibility 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 February 15.
4. All figures are rounded to reflect the relative accuracy of the estimate.
5. The operator of the project is Geomet s.r.o., a wholly-owned subsidiary of EMH. Gross and Net Attributable resources are the same.
6. Any apparent inconsistencies are due to rounding errors.
7. LCE is Lithium Carbonate Equivalent and is equivalent to Li2CO3.
The Cinovec database used for the Mineral Resource Estimate incorporates information derived from almost 800 historic underground and surface diamond drill holes, historic underground channel sampling as well as the 26 surface diamond holes drilled to date by European Metals. A total of 73,785 assay intervals are now included in the database. Figure 1 is a map showing the location of holes drilled by European Metals relative to historic drill holes and underground workings.
Figure 1: Plan view of Cinovec Project drill hole locations, historic underground workings, Li Indicated and Inferred Resource.
Historically, core samples were either split or consumed entirely, with intervals ranging from 0.03 to 10.5m; more than 99.75% of historic drill samples fall in a range between 0.1 and 3m long. Historic channel samples were collected across 1m intervals. Samples collected from 2014, 2015 and 2016 holes drilled by European Metals comprised half core and honoured geological contacts and mineralised domains, ranging from 0.5 to 2.1m long.
Historic analytical methods included XRF and wet chemical techniques; samples collected from the new holes were analysed by fusion or 4 acid digest with ICP finish. Assay data were composited to 1m intervals prior to Mineral Resource estimation.
Sample spacing used in Mineral Resource estimation for tin ranges from continuous channel sampling up to approximately 100m. The range reflects the density of historical work - samples are very closely spaced in areas of underground development and trial mining, less so in areas sampled only by surface or underground drill holes.
Sample spacing used for lithium Mineral Resource estimation is wider, as not all historic samples were assayed for lithium; sample spacing typically ranges from 50m to 200m. Note that only blocks in the lithium model which had an average distance to samples used of less than 100m were assigned to the Mineral Resource, with the remainder considered to form part of an Exploration Target.
At a 0.1% Li cutoff, the Exploration Target is:
• 350 to 450 Mt @ 0.39 to 0.47% Li2O for 3.4 to 5.3 Mt LCE
The Sn-W-Li mineralisation is hosted in an alkalic granite cupola of late Variscan age. Tin and tungsten occur mainly in oxide minerals (cassiterite and wolframite). Lithium occurs mainly in zinnwaldite, a Li-rich muscovite. Quartz veining and greisenisation is associated with the mineralisation. Typically, highest grade lithium mineralization is associated with the greisen but large portions of the lithium resource are also hosted in the greisenized granite or other types of altered granite.
A geological domain model was constructed using Leapfrog software with solid wireframes representing greisen, granite, greisenised granite and the overlying barren rhyolite. In addition a thin overburden layer is modelled near surface and a low-mica granite is modelled to form the lower limit of the mineralisation. This was used to both control interpolation and to assign density to the model.
Figure 2: Easting Section at -778890E showing geological model.
Analysis of sample lengths indicated that compositing to 1m was necessary. Search ellipse sizes and orientations for the estimation were based on drill hole spacing, the known orientations of mineralisation and variography. A Kriging Neighbourhood Analysis was also carried out using Kriging Variance, Kriging Efficiency and Slope of Regression to optimise search parameters. An “unfolding” search strategy was used which allowed the search ellipse orientation to vary with the locally changing dip and strike.
After statistical analysis, a top cut of 5% was applied to Sn% and W%; no top cut is applied to Li%. Sn%, W% and Li% were then estimated by Ordinary Kriging within the geological solids.
Figure 3: Easting Section at -778890E showing Lithium grade estimates
In addition, the recent drill samples have also assayed for two additional suites of elements/oxides:
Ag_ppm, As_ppm, Cd_ppm, Co_ppm, Cu_ppm, Li_ppm, Mo_ppm, Ni_ppm, Pb_ppm, Sc_ppm, Tl_ppm, Zn_ppm, SiO2_%, Al2O3_%, Fe2O3_%, CaO_%, MgO_%, Na2O_%, K2O_%, Cr2O3_%, TiO2_%, MnO_%, P2O5_% and SrO_%.
Ba_ppm, Ce_ppm, Cr_ppm, Cs_ppm, Dy_ppm, Er_ppm, Eu_ppm, Ga_ppm, Gd_ppm, Hf_ppm, Ho_ppm, La_ppm, Lu_ppm, Nb_ppm, Nd_ppm, Pr_ppm, Rb_ppm, Sm_ppm, Sn_ppm, Sr_ppm, Ta_ppm, Tb_ppm, Th_ppm, Tm_ppm, U_ppm, V_ppm, W_ppm, Y_ppm and Yb_ppm.
While these have been incorporated into the block model, they are only available for the recent drilling and consequently do not have the same confidence as the Li, Sn and W estimates. They can thus only be used as a guide to the nature of potentially deleterious or beneficial elements.
The primary search ellipse was 150m along strike, 150m down dip and 7.5m across the mineralisation. A minimum of 4 composites and a maximum of 8 composites were required. 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. Block size was 5m (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.
Densities applied for Mineral Resource tonnage calculations are based on historical bulk density measurements of 2.57 for granite and 2.70 for greisen, confirmed by laboratory measurements in 2016.
The impact of the new European Metals drill holes on the geological model and the block model have been reviewed. Globally the geology and resource model are similar to the previous (May 2016) model, with only relatively minor local changes to grade distributions. The increase in confidence resulting from the new drill data has allowed additional areas of the block model to be upgraded in classification from Inferred to Indicated.
BACKGROUND INFORMATION ON CINOVEC
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 348Mt @ 0.45% Li2O and 0.04% Sn and an Inferred Mineral Resource of 309Mt @ 0.39% Li2O and 0.04% Sn containing a combined 7.0 million tonnes Lithium Carbonate Equivalent and 263kt of tin.
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.
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.
For further information on this update or the Company generally, please visit our website at www. http://europeanmet.com or contact:
Mr. Keith Coughlan
Information in this release that relates to exploration results is based on information compiled by European Metals Director 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 (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.
To convert the Li Inferred Mineral Resource of 532Mt @ 0.20% Li grade (as per the Competent Persons Report dated May 2016) to Li2O, the reported Li grade of 0.20% is multiplied by the standard conversion factor of 2.153 which results in an equivalent Li2O grade of 0.43%.
The standard conversion factors are set out in the table below:
Table: Conversion Factors for Lithium Compounds and Minerals
Convert to Li
Convert to Li2O
Convert to Li2CO3
A copy of this announcement is available from the Company’s website at www.europeanmet.com.
Here is the link to the full and original Press Release of European Metals Holding: http://www.investegate.co.uk/european-metals-hldg--emh-/rns/substantial-increase-in-indicated-resource-cinovec/201702170724521634X/
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