REG - Europa Metals Ltd - Results for the Half-Year Ended 31 December 2021
30/03/2022 07:00
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RNS Number : 4374G Europa Metals Ltd 30 March 2022
30 March 2022
Europa Metals Ltd
("Europa Metals", the "Company" or the "Group") (AIM, AltX: EUZ)
Results for the Half-Year Ended 31 December 2021
Europa Metals, the European focused lead, zinc and silver developer, is
pleased to announce its unaudited results for the half-year ended 31 December
2021 (the "Half-Year Financial Report").
Please see below extracts from the Half-Year Financial Report, being the:
- Chairman and Interim-CEO's Review
- Review and results of operations
- Consolidated Statement of Profit or Loss and Other Comprehensive
Income
- Consolidated Statement of Financial Position
- Consolidated Statement of Changes in Equity
- Consolidated Statement of Cash Flows
A copy of the full Half-Year Financial Report is available on the Company's
website at www.europametals.com (http://www.europametals.com) .
For further information on the Company, please visit www.europametals.com
(http://www.europametals.com) or contact:
Europa Metals Ltd
Dan Smith, Non-Executive Director and Company Secretary (Australia)
T: +61 417 978 955
Myles Campion, Interim-CEO and Executive Chairman (UK)
T: +44 (0)20 3289 9923
Linkedin: Europa Metals ltd
Twitter: @ltdeuropa
Vox: Europametals
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 (0)20 7409 3494
WH Ireland Limited (Broker)
Harry Ansell/Dan Bristowe/Katy Mitchell/Sarah Mather
T: +44 (0)20 7220 1666
Questco Corporate Advisory Proprietary Limited (JSE Sponsor)
Sharon Owens
T (direct): +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.
Key Extracts from the Company's unaudited Half-Year Financial Report are set
out below:
Chairman and Interim-CEO's Review
During the reporting period, we have continued to advance our understanding of
the Company's wholly owned Toral lead, zinc and silver project in the Castilla
y Léon region, Spain ("Toral" or the "Toral Project") as a potential future
low capex, high margin, lead, zinc and silver mine within the EU.
During 2021, Europa Metals prosecuted a very successful drilling and
metallurgical campaign involving a series of holes designed to achieve an
increase in the project's indicated resource estimate and obtain a bulk sample
in order to further our understanding of the process flowsheet.
The drill campaign initiated in the first half of 2021, targeted the upper
more siliceous levels of the resource at Toral, which exhibits a lower grade
and thinner horizon than the lower carbonate facies. Results from the drilling
yielded some tremendous results with hole TOD-029 intersecting 20.45m @ 2.68%
ZnEq(Pb+Ag) and hole TOD-034 intersecting 14.85m @ 8.36% ZnEq(Pb+Ag).
The results from the campaign were used to commission an independent updated
resource estimate yielding a 55% increase in the indicated resource to
approximately 5.9 Mt @ 7.1% ZnEq(including Pb credits) within a total resource
of approximately 20 Mt @ 6.3% ZnEq(including Pb credits). Europa Metals is
utilising this substantial updated indicated resource in future prospective
mine scheduling and internal reserve calculations for future feasibility
studies. At our envisaged future mining rate of 700ktpa steady state, the
increase covers the first 10 years' of production, which is a substantial
improvement from where the resource estimate stood only two years ago.
Our drill campaign also successfully obtained a bulk sample from some of the
daughter holes from holes TOD-029 and TOD-034 which were submitted to Wardell
Armstrong International Limited ("WAI") for further metallurgical evaluation.
As part of this testwork, we also engaged TOMRA GmbH in Germany to complete a
programme of X-Ray transmission ("XRT") or ore sorting work. Previous
programmes had yielded positive results from this siliceous material
illustrating the potential ability for the grade of this zone to be upgraded.
Accordingly, the Europa Metals team has progressed Toral from being a
collection of historical data points to a project with the potential for a
future development with good margins at long term average revenue pricing
within a first world jurisdiction with world class infrastructure. Over the
coming period, the Board will continue with its endeavours to establish a
clear pathway forward for Toral to deliver future returns for shareholders.
In late October 2021, the Company secured a £1.5m (gross) equity financing,
through its new broker, WH Ireland Limited ("WH Ireland"), with the net
proceeds to be utilised to further progress and de-risk Toral and for general
working capital purposes, but also to add additional focus on business
development. To this end, the management team has reviewed over 10 projects,
with two being discussed and evaluated at Board level, and we intend to
continue such activity and to identify, investigate and assess additional
opportunities of potential interest. Further updates will be provided as and
when appropriate.
Myles Campion
Interim-CEO and Executive Chairman
29 March 2022
Review and results of operations
Europa Metals is a European focused lead, zinc and silver developer.
Operating Results
During the half-year from 1 July 2021 to 31 December 2021, the Group recorded
a net loss after tax of AUD1,357,379 (1 July 2020 to 31 December 2020: net
loss of AUD1,647,142).
Toral Lead-Zinc-Silver Project, Spain ("Toral" or the "Toral Project")
Following the completion of the Scoping Study announced by the Company in
December 2018, workstreams have focused on additional resource drilling,
geotechnical drilling, metallurgical testwork and environmental baseline
studies.
Updated Mineral Resource Estimate
On 1 October 2021, the Company announced an updated independent mineral
resource estimate ("MRE") for Toral. The updated MRE showed a 55% increase in
the indicated resource to approximately 5.9 million tonnes ("Mt") @ 7.1% zinc
equivalent ("ZnEq") (including Pb credits) and 27g/t Ag. In summary, the
updated MRE represented an approximate:
· 55% increase in Indicated resource tonnes;
· 39% increase in Indicated contained tonnes of zinc to
approximately 251,000 tonnes;
· 30% increase in Indicated contained tonnes of lead to
approximately 196,000 tonnes; and
· 40% increase in Indicated contained ounces of silver to
approximately 5.2 million ounces.
A total resource was reported of approximately 20Mt @ 6.3% zinc equivalent
(including Pb credits), 3.9% Zn, 2.7% Pb and 22g/t Ag, including:
o 790,000 tonnes of zinc, 550,000 tonnes of lead and 14 million ounces of
silver.
The MRE was reported in accordance with JORC(2012) and incorporated data
obtained from, inter alia:
o 172 diamond drill holes (including wedges) and 4 reverse circulation (RC)
drill holes totalling 59,658.73 metres of drilling (including environmental
drillholes); and
o 19 underground channels for 18.75 metres.
*Zn Eq % is the calculated Zn equivalent incorporating lead credits; (Zn Eq
(Pb)% = Zn + Pb*0.867). Zn Eq (PbAg)% is the calculated Zn equivalent
incorporating silver credits as well as lead; (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.
http://www.rns-pdf.londonstockexchange.com/rns/4374G_1-2022-3-29.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4374G_1-2022-3-29.pdf)
Image 1: showing Addison Mining Services Limited's ("AMS") resource block
model for Toral as a 3D view looking north, by resource category
Metallurgical work programme
Summary of ore sorting
Ore sorting has been identified as having the potential to unlock value in the
shallower, lower grade zones previously not considered to be economically
mineable in the 2018 Scoping Study. Testing was therefore undertaken to
investigate the potential of pre-concentrate material from the Toral deposit
by means of sensor-based sorting. If successful, pre-concentration of the ore
could provide a number of potential benefits for the project including:
· Reducing the size of the requisite process plant (crushing, grinding
and dewatering circuits) whilst maintaining the same overall throughput;
· Enabling ore that may otherwise be sub-economic based on grade to be
processed; and
· Allowing higher mining rates without necessarily having to increase the
size of the processing plant.
As reported last year, the sorting results for both the hole TOD-024 and hole
TOD-025L samples were considered to be excellent, with between 45% - 50% of
the mass rejected at, for the hole TOD-024 sample, 98% Pb recovery, 97% Zn
recovery and 92% Ag recovery, and at, for the hole TOD-025L sample, 98% Pb
recovery, 94% Zn recovery and 82% Ag recovery.
The increasing head assay was also pleasing with the hole TOD-024 sample
increasing from 1.04% Pb and 1.01% Zn in the feed to 2.34% Pb and 2.15% Zn and
an approximate doubling of the grade in the sorter product. In the hole
TOD-025L sample the increase in grade was more pronounced with uplifts in the
Pb grade from 1.13% Pb to 4.03% and Zn grade from 0.62% Zn in the feed to
2.06% Zn in the sorter product.
Ore sorting process
Ore sorting by means of XRT is an established process for sorting Pb/Zn ores
by way of rejecting waste dilution from ores at low cost prior to more
conventional processing by flotation. Sensor-based sorting was selected for
WAI's investigation as it offers a number of benefits over alternative
pre-concentration methods, such as Dense Media Separation (DMS), including the
ability to change the sorting criteria depending on the feed material and
target specific metals/minerals of interest along with the added flexibility
of not having to be continuously operated.
Toral ore sorting analysis
On 23 March 2022, the Company announced further positive results in respect of
the XRT ore sorting testwork, carried out by TOMRA GmbH ("TOMRA") in Germany
and overseen by WAI in Cornwall. The results followed on from the
abovementioned previous, encouraging testwork.
A bulk sample of siliceous mineralisation and two further discrete carbonate
samples (from holes TOD-025D and TOD-028) from the indicated mineral resource
zone at Toral were evaluated by TOMRA. Such XRT testwork forms part of a wider
metallurgical programme that includes locked cycle flotation testwork and
tailings evaluation for backfill.
The key highlights are summarised as follows:
· Results from the siliceous bulk sample showed:
o Excellent recovery of 95.7% Pb and 94.3% Zn metal
o 43.7% mass rejection of waste
o An overall enrichment ratio of 1.7 for both the lead and zinc
o Zn Equivalent (Pb+Ag) grade increased from 3.56% to 6.00%
· Results from hole TOD-025D revealed:
o Excellent recovery of 98.9% Pb and 94.7% Zn metal
o 46.8% mass rejection of waste
o An overall enrichment ratio of 1.9 for lead and 1.8 for zinc
o Zn Equivalent (Pb+Ag) grade increased from 6.57% to 12.00%
· Results from hole TOD-028 demonstrated:
o Excellent recovery of 96.6% Pb and 96.1% Zn metal
o 47.7% mass rejection of waste
o An overall enrichment ratio of 1.8 for both the lead and zinc
o Zn Equivalent (Pb+Ag) grade increased from 4.24% to 7.67%
Hydrogeological programme
On 13 December 2021, the Company announced the successful completion and
results of an independent hydrogeological study on Toral, commissioned from
CRS Ingenieria, following a five month programme. The objective was to assess
water conditions and drainage relating to the planned further development of
the project. The 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. The results were in line with the
hydrogeological conditions assumed within the Company's pre-existing planned
development model. Piezometers continue to monitor water levels in line with
the Company's ongoing compliance with hydrogeological regulations within the
region and Spain.
CDTI Loan Funding
On 19 October 2020, the Company announced that following an extensive
submission process, an interest-free loan by way of a grant of €466,801.50
(the "Grant") had been awarded to the Company by the Centre for the
Development of Industrial Technology (CDTI) for use towards research and
development ("R&D") at Toral.
The CDTI is a Public Business Entity in Spain, under the auspices of the
Ministry of Science and Innovation, which fosters the technological
development and innovation of Spanish companies. The Grant is categorised as a
partly refundable loan (with a nil per cent. interest rate) with the funds
received to be allocated towards the development of R&D technologies
relating to the recording and correction of drillhole deviation at the Toral
Project. Application for the Grant was made further to ongoing work by Europa
Metals and the AIR Institute, linked to the Salamanca University, and drilling
contractors Sondeos y Perforaciones Industriales de Bierzo SA ("SPI").
The Grant monies can be drawn down by Europa Metals in up to three tranches
subject to certain, pre-defined, operational milestones being met, with the
first tranche of €163,380.53 received by the Company prior to the last
financial year end.
On 19 July 2021, the Company announced that it had completed the requisite
work and collated and submitted all the relevant documentation to the CDTI in
relation to the Stage 1 milestone of the Grant.
The core objectives of the Innovation Programme are to retrieve and process
data from drilling at Toral in order to develop algorithmic software for use
in future exploration campaigns to correct drilling deviation. Biannual
repayments of €21,822 begin in 2024, running for 7 years until 2031, with a
fixed interest rate of nil per cent.
On 8 November 2021, the Company announced that the CDTI had approved the
requisite documentation submitted in relation to the Stage 1 milestone and
that the Company had therefore drawn down and received the second tranche of
the Grant being €158,628.60.
Stage 2 work will see Toral continue to be used as a live testing environment
by the partnership as the University of Salamanca continues its analysis and
any future commercial benefit from an eventual product will be shared by the
partners. On completion of the Stage 2 work, currently expected to occur
during 2022, a third, and final, tranche of €144,792.37 will then be
available for draw down subject to a review by the CDTI confirming that the
requisite criteria of the innovation programme have been met.
Once the funds have demonstrably been spent on appropriate R&D exploration
activity at the Toral Project by the Company, 70 per cent. of the total Grant
will be repayable with the balancing 30 per cent. then not required to be
repaid.
Coronavirus (COVID-19) impact on operations
The Board is actively monitoring the impact of COVID-19 on the group's
operations on an ongoing basis.
The Company's response to the global coronavirus (COVID-19) health event
involved safeguarding key personnel at all sites and limiting travel,
including to work at its sites, further to the advice and guidance issued by
all relevant health authorities and the Spanish and UK governments.
There does not currently appear to be any material impact on the Company or
any significant uncertainties with respect to events or conditions which may
impact the Company unfavourably as at the reporting date or subsequently as a
result of the Coronavirus (COVID-19) pandemic.
Competent Person's statement
The information above that relates to Exploration Results is based on
information compiled by Mr J.N. Hogg, MSc. MAIG Principal Geologist for
Addison Mining Services Limited ("AMS"), an independent Competent Person
within the meaning of the JORC (2012) code and qualified person under the AIM
guidance note for mining and oil & gas companies. Mr Hogg has reviewed and
verified the technical information that forms the basis of, and has been used
in the preparation of, the significant intercepts referred to in this
announcement, including all analytical data, diamond drill hole logs, QA/QC
data, density measurements, and sampling, diamond drilling and analytical
techniques. Mr Hogg consents to the inclusion of the matters based on the
information, in the form and context in which it appears. Mr Hogg has also
reviewed and approved the technical information in his capacity as a qualified
person under the AIM Rules for Companies.
Corporate
Board changes
Post the reporting period end, on 3 February 2022, the Company announced that
Mr Laurence Read had resigned as CEO and as a director of the Company and its
subsidiaries with effect from 2 February 2022. Accordingly, Mr Myles Campion
had assumed the role of interim-CEO with immediate effect.
Capital raising
On 26 October 2021, the Company announced that it had raised, in aggregate,
gross proceeds of £1.5 million through the placing of 19,527,920 new ordinary
shares to certain institutional and other investors and a subscription by
certain other investors directly with the Company of a further 10,472,080 new
ordinary shares in each case at a price of 5 pence per share (the
"Fundraising").
The Fundraising was conducted in two tranches, with the initial tranche of new
ordinary shares being issued under the Company's pre-existing share capital
authorities, and the second tranche issued following the receipt of
shareholder approval at the Company's 2021 Annual General Meeting held on 30
November 2021.
Issue of options
Following the approval of resolution 3 at the Company's Annual General
Meeting, the Company proceeded to issue 1,500,000 adviser options to Bennelong
Corporate Limited, exercisable at 5 pence each on or before 2 years from their
date of issue, and also issued 1,500,000 broker warrants to WH Ireland
Limited, exercisable at 5 pence each on or before 3 years from their date of
issue.
Shareholder Meeting
On 30 November 2021, the Company held its Annual General Meeting whereby all
resolutions were duly approved by shareholders by way of a poll.
Events subsequent to the reporting date
On 26 January 2022, the Company provided a corporate and operational update,
which included details of various cost saving measures and ongoing work
streams at Toral.
On 3 February 2022, the Company announced that Mr Laurence Read had resigned
as CEO and as a director of the Company and its subsidiaries, with effect from
2 February 2022. Accordingly, Mr Myles Campion had assumed the role of
interim-CEO with immediate effect.
On 23 February 2022, the Company provided an update on, inter alia, the timing
of geotechnical and resource drilling programmes at Toral, as well as progress
on metallurgical testwork.
On 23 March 2022, the Company announced further positive ore sorting testwork
results from TOMRA, which highlighted that the ore at Toral is amenable to
simple beneficiation techniques. It was also announced that WH Ireland had
assumed the role of sole-broker to the Company with immediate effect.
No other matters or circumstances have arisen since the reporting date that
may significantly affect the operations of the Company, the results of those
operations, or the Company's state of affairs in future financial years.
Daniel Smith
Director
29 March 2022
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the half-year ended 31 December 2021
6 months to 6 months to
31 December 2021 31 December 2020
AUD AUD
Revenue from continuing operations
Revenue - -
- -
Exploration expenditure (711,643) (950,854)
Foreign exchange (loss)/gain 22,477 (73,865)
Other expenses (668,213) (622,423)
Loss before income tax (1,357,379) (1,647,142)
Income tax (expense)/benefit - -
Net loss after income tax (1,357,379) (1,647,142)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Net exchange (loss)/gain on translation of foreign operation 8,844 (285,969)
Other comprehensive (loss)/profit for the period, net of tax 8,844 (285,969)
Total comprehensive loss for the period (1,348,535) (1,933,111)
Net (loss) for the period attributable to shareholders of the Company: (1,357,379) (1,647,142)
(1,357,379) (1,647,142)
Total comprehensive (loss) for the period attributable to shareholders of the (1,348,535) (1,933,111)
Company:
(1,348,535) (1,933,111)
(Loss) per share attributable to the ordinary equity holders of the Company
Loss per share Cents per share Cents per share
- basic (loss) per share (2.31) (3.67)
- diluted (loss) per share (2.31) (3.67)
The above Consolidated Statement of Profit or Loss and Other Comprehensive
Income should be read in conjunction with the accompanying notes in the full
Half-Year Financial Report.
Consolidated Statement of Financial Position as at 31 December 2021
31 December 30 June
2021 2021
AUD AUD
Current Assets
Cash and short-term deposits 2,525,030 1,180,768
Trade and other receivables 372,974 84,720
Total Current Assets 2,898,004 1,265,488
Non-current Assets
Plant and equipment 54,789 66,718
Other receivables - 190,523
Right of use assets 19,519 29,277
Capitalised exploration 1,258,838 1,276,964
Total Non-current Assets 1,333,146 1,563,482
Total Assets 4,231,150 2,828,970
Current Liabilities
Trade and other payables 60,536 261,886
Lease liabilities 4,255 16,505
Unearned income 158,382 -
Total Current Liabilities 223,173 278,391
Non-current Liabilities
Borrowings 212,152 121,727
Total Non-current Liabilities 212,152 121,727
Total Liabilities 435,325 400,118
NET ASSETS 3,795,825 2,428,852
Equity
Contributed equity 48,227,649 45,695,303
Accumulated losses (47,737,983) (46,380,604)
Reserves 3,306,159 3,114,153
TOTAL EQUITY 3,795,825 2,428,852
The above Consolidated Statement of Financial Position should be read in
conjunction with the accompanying notes in the full Half-Year Financial
Report.
Consolidated Statement of Changes in Equity for the half-year ended 31
December 2021
Employee
Issued Accumulated Share Option Foreign Exchange Total
Incentive
Capital Losses Reserve Reserve Reserve Equity
AUD AUD AUD AUD AUD AUD
At 1 July 2020 42,489,962 (43,121,940) 491,577 2,154,254 485,517 2,499,370
(Loss) for the period - (1,647,142) - - - (1,647,142)
Other comprehensive income (net of tax) - - - - (285,969) (285,969)
Total comprehensive loss (net of tax) - (1,647,142) - - (285,969) (1,933,111)
Transaction with owners in their capacity as owners
Shares issued net of transaction costs 3,380,570 - - 162,787 - 3,543,357
Options issued to brokers (174,639) - - 174,639 - -
At 31 December 2020 45,695,893 (44,769,082) 491,577 2,491,680 199,548 4,109,616
At 1 July 2021 45,695,303 (46,380,604) 491,577 2,520,528 102,048 2,428,852
(Loss) for the period - (1,357,379) - - - (1,357,379)
Other comprehensive income (net of tax) - - - - 8,844 8,844
Total comprehensive loss (net of tax) - (1,357,379) - - 8,844 (1,348,535)
Transaction with owners in their capacity as owners
Shares issued net of transaction costs 2,532,346 - - - - 2,532,346
Options issued to directors and management - - - 28,848 - 28,848
Options issued to brokers and corporate advisers - - - 154,314 - 154,314
At 31 December 2021 48,227,649 (47,737,983) 491,577 2,703,690 110,892 3,795,825
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes in the full Half-Year Financial
Report.
Consolidated Statement of Cash Flows for the half-year ended 31 December 2021
6 months to 31 December 2021 6 months to 31 December 2020
AUD AUD
Cash flows from operating activities
Payments to suppliers and employees (567,590) (416,600)
Payment for exploration and evaluation costs (890,067) (886,241)
Net cash flows used in operating activities (1,457,657) (1,302,841)
Cash flows from investing activities
Payments for plant and equipment (616) (7,698)
Net cash flows used in investing activities (616) (7,698)
Cash flows from financing activities
Lease principal repayments (12,853) (13,229)
Proceeds from issue of shares 2,760,272 3,597,214
Costs of capital raising (138,369) (253,101)
Proceeds from borrowings 251,705 260,617
Net cash flows from financing activities 2,860,755 3,591,501
Net increase / (decrease) in cash and cash equivalents 1,402,482 2,280,962
Cash and cash equivalents at beginning of period 1,180,768 700,642
Effect of foreign exchange on cash and cash equivalents (58,220) (83,220)
Cash and cash equivalents at end of the period 2,525,030 2,898,384
The above Consolidated Statement of Cash Flows should be read in conjunction
with the accompanying notes in the full Half-Year Financial Report.
- ENDS -
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