REG - European Metals Hldg - Significant Increase in Planned Lithium Production
20/12/2024 07:00
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RNS Number : 8457Q European Metals Holdings Limited 19 December 2024
For immediate release
20 December 2024
SIGNIFICANT INCREASE IN PLANNED LITHIUM PRODUCTION
European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY and EMHLF)
("European Metals" or the "Company") is pleased to announce a significant
increase in the planned annual production of lithium chemicals from the
Cinovec Project ("Cinovec" or "the Project").
Highlights
· Planned production of battery-grade lithium hydroxide monohydrate
increased by 42% to 41,658 tpa or 36,670 tpa of battery-grade lithium
carbonate.
· Planned run-of-mine ore production increased by 42% taking the
Project production rate from 2.25 mtpa to 3.20 mtpa, without processing plant
head grade, the Life of Mine or plant recovery being significantly impacted.
· This planned increase in production enables the Project to
benefit from significant economies of scale which will be confirmed in the
Definitive Feasibility Study ("DFS") now due for completion in mid-2025.
Keith Coughlan, Executive Chairman, commented: "This work on the production
increase was carried out by Bara as part of its Mining DFS and is another
example of the important work being done to improve the economics of the
Cinovec Project during the extended timeframe for the DFS. This significant
increase in planned lithium output will lead to additional recognition of how
important the Cinovec Project is and the role the Project will play in
enabling the EU to reach its goals of lithium self-sufficiency by 2030."
Increase in Planned Mine and Battery Grade End-Product Lithium Chemicals
Production
The assessment of production capacity capabilities for the Project has now
been completed with the result being that the run-of-mine production ("ROM")
has been increased from 2.25 million tonnes per annum ("mtpa") to 3.2 mtpa.
The substantial increase in ROM has resulted in an increase in the planned
production of lithium hydroxide monohydrate from 29,385 tonnes per annum
("tpa") to 41,658 tpa or 36,670 tpa of lithium carbonate without the need to
increase the size of footprint of the underground mine at surface. This 42%
increase in ROM production is expected to result in considerable economic
benefits to be gained due to the economies of scale flowing through to the
lithium chemical plant.
In the past the critical constraint on mine production capacity for the
Project was the size of the proposed Dukla processing plant site, at 24
hectares. The Prunéřov EPR1 site which is now to be used is 36 hectares and
enables increased ROM production.
Bara Consulting, the mining adviser to the Project, was instructed to review
options for an increase in ROM production. This review was at Concept Study
level, building on the previous mining Pre-Feasibility Study ("PFS") published
on 19(th) January 2022 and subsequent DFS-level of work as part of the overall
DFS.
The limitations placed on ROM capacity review by the Project team were that
the mine portal area could not increase in size or change position and that
the box-cut and twin decline system would remain the same as designed for the
PFS and as a result not materially impact the environmental footprint.
The results of increasing planned mine production levels when compared with
the PFS mine production levels are set out in the table below:
New Plan PFS
Annual ROM production at capacity, mtpa +42% 3.20 2.25
Production Years (LOM) 26 25
Production Years excluding ramp-up/down 21 22
Total Mining Inventory mined over LOM, mt +36% 74.0 54.5
Mining Inventory in Measured & Indicated JORC Resource, mt 55.0 54.5
Mining Inventory in Inferred JORC Resource, mt 19.0 0.0
Percentage of 708.2mt JORC Resource extracted 10.4 7.7
Average LOM ore grade, Li % -7% 0.262 0.281
Lithium hydroxide monohydrate production, tpa +42% 41,658 29,386
LCE production, tpa +42% 36,670 25,868
Lithium recovery to concentrate 91.5% 90%
Lithium recovery in chemical plant 89.5% 91%
Overall lithium recovery 81.9% 82%
The mine plan for the new 3.2mtpa ROM planned production level is the same as
the mine plan for the PFS producing 2.25mtpa, except that it is mined faster
and Inferred JORC Resources are brought into production in the last eight
years of mining (Years 21 to 28), including three ramp-down years). No
Inferred Resources are included in the mine plan in Years 1 to 20.
Assumed Lithium Recovery Levels
The lithium recovery to concentrate used in this Study represents the recovery
from a Front-End Comminution and Beneficiation circuit ("FECAB") design which
is 100% flotation. As detailed in the Company's announcements of 31(st) July
2024 and 27(th) November 2024, the repeatable lithium recoveries for
un-deslimed flotation achieved in bench-scale testing are >94%. The FECAB
recovery rate of 91.5% used in the table above incorporates allowances for
full scale-up / industrial plant performance.
DFS Status Update
As noted in the Cinovec Project Update announcement of 27(th) November 2024,
results of the DFS are expected to be released in mid-2025. The increased
planned ROM and battery grade lithium product levels will not impact this
timeline.
European Metals, in developing the Cinovec Lithium Project, is well positioned
to meet the rising demand for battery materials in the European Union ("EU")
and to support the EU's objectives to secure supply of Critical Minerals
including lithium within the EU. The Cinovec Project is the largest hard rock
lithium project in the EU and Europe and is centrally located on the Czech
Republic's border with Germany. The project has excellent ESG credentials
underpinning the production of battery grade lithium hydroxide and/or
carbonate with low CO(2) emissions in a global context.
This announcement has been approved for release by the Board.
CONTACT
For further information on this update or the Company generally, please visit
our website at www.europeanmet.com (http://www.europeanmet.com) or see full
contact details at the end of this release.
BACKGROUND INFORMATION ON CINOVEC
PROJECT OVERVIEW
Cinovec Lithium Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech
State over the Cinovec Lithium Project. Geomet has been granted a preliminary
mining permit by the Ministry of Environment and the Ministry of Industry. The
company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned
subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium
deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li(2)O,
Indicated Mineral Resource of 360.2Mt at 0.44% Li(2)O and an Inferred Mineral
Resource of 294.7Mt at 0.39% Li(2)O containing a combined 7.39 million tonnes
Lithium Carbonate Equivalent (refer to the Company's ASX/ AIM release dated 13
October 2021) (Resource Upgrade at Cinovec Lithium Project).
An initial Probable Ore Reserve of 34.5Mt at 0.65% Li(2)O reported 4 July 2017
(Cinovec Maiden Ore Reserve - Further Information) has been declared to cover
the first 20 years mining at an output of 22,500tpa of lithium carbonate
(refer to the Company's ASX/ AIM release dated 11 July 2018) (Cinovec
Production Modelled to Increase to 22,500tpa of Lithium Carbonate).
This makes Cinovec the largest hard rock lithium deposit in Europe and the
fifth largest non-brine deposit in the world.
The deposit has previously had over 400,000 tonnes of ore mined as a trial
sub-level open stope underground mining operation.
On 19 January 2022, EMH provided an update to the 2019 PFS Update. It
confirmed the deposit is amenable to bulk underground mining (refer to the
Company's ASX/ AIM release dated 19 January 2022) (PFS Update delivers
outstanding results). Metallurgical test-work has produced both battery-grade
lithium hydroxide and battery-grade lithium carbonate at excellent recoveries.
In February 2023 DRA Global Limited ("DRA") was appointed to complete the
Definitive Feasibility Study ("DFS").
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. The deposit lies in an active mining
region.
The economic viability of Cinovec has been enhanced by the recent push for
supply security of critical raw materials for battery production, including
the strong increase in demand for lithium globally, and within Europe
specifically, as demonstrated by the European Union's Critical Raw Materials
Act (CRMA).
BACKGROUND INFORMATION ON CEZ
Headquartered in the Czech Republic, CEZ a.s. is one of the largest companies
in the Czech Republic and a leading energy group operating in Western and
Central Europe. CEZ's core business is the generation, distribution, trade in,
and sales of electricity and heat, trade in and sales of natural gas, and coal
extraction. The foundation of power generation at CEZ Group are emission-free
sources. The CEZ strategy named Clean Energy for Tomorrow is based on
ambitious decarbonisation, development of renewable sources and nuclear
energy. CEZ announced that it would move forward its climate neutrality
commitment by ten years to 2040.
The largest shareholder of its parent company, CEZ a.s., is the Czech
Republic with a stake of approximately 70%. The shares of CEZ a.s. are traded
on the Prague and Warsaw stock exchanges and included in the PX and WIG-CEE
exchange indices. CEZ's market capitalization is approximately EUR 20.3
billion.
As one of the leading Central European power companies, CEZ intends to develop
several projects in areas of energy storage and battery manufacturing in the
Czech Republic and in Central Europe.
CEZ is also a market leader for E-mobility in the region and has installed and
operates a network of EV charging stations throughout Czech Republic. The
automotive industry in the Czech Republic is a significant contributor to GDP,
and the number of EV's in the country is expected to grow significantly in the
coming years.
COMPETENT PERSONS AND QUALIFIED PERSON FOR THE PURPOSES OF THE AIM NOTE FOR
MINING AND OIL & GAS COMPANIES
Information in this release that relates to the FECAB metallurgical testwork
is based on, and fairly reflects, technical data and supporting documentation
compiled or supervised by Mr Walter Mädel, a full-time employee of Geomet
s.r.o an associate of the Company. Mr Mädel is a member of the Australasian
Institute of Mining and Metallurgy ("AUSIMM") and a mineral processing
professional with over 27 years of experience in metallurgical process and
project development, process design, project implementation and operations. Of
his experience, at least 5 years have been specifically focused on hard rock
pegmatite Lithium processing development. Mr Mädel consents to the inclusion
in the announcement of the matters based on this information in the form and
context in which it appears. Mr Mädel is a participant in the long-term
incentive plan of the Company.
Information in this release that relates to exploration results is based on,
and fairly reflects, information and supporting documentation compiled by
Dr Vojtech Sesulka. Dr Sesulka is a Certified Professional Geologist
(certified by the European Federation of Geologists), a member of the Czech
Association of Economic Geologist, and a Competent Person as defined in the
JORC Code 2012 edition of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves. Dr Sesulka has provided his prior
written consent to the inclusion in this report of the matters based on his
information in the form and context in which it appears. Dr Sesulka is an
independent consultant with more than 10 years working for the EMH or Geomet
companies. Dr Sesulka does not own any shares in the Company and is not a
participant in any short- or long-term incentive plans of the Company.
Information in this release that relates to metallurgical test work and the
process design criteria and flow sheets in relation to the LCP is based on,
and fairly reflects, information and supporting documentation compiled by Mr
Grant Harman (B.Sc Chem Eng, B.Com). Mr Harman is an independent consultant
and the principal of Lithium Consultants Australasia Pty Ltd with in excess of
14 years of lithium chemicals experience. Mr Harman has provided his prior
written consent to the inclusion in this report of the matters based on his
information in the form and context that the information appears. Mr Harman is
a participant in the long-term incentive plan of the Company.
The information in this release that relates to Mineral Resources and
Exploration Targets is based on, and fairly reflects, information and
supporting documentation prepared by Mr Lynn Widenbar. Mr Widenbar, who is a
Member of the Australasian Institute of Mining and Metallurgy and a Member of
the Australasian Institute of Geoscientists, 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 has provided his prior written consent to the inclusion
in this report of the matters based on his information in the form and context
that the information appears. Mr Widenbar does not own any shares in the
Company and is not a participant in any short- or long-term incentive plans of
the Company.
The Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market
announcement and, in the case of estimates of Mineral Resources or Ore
Reserves, that all material assumptions and technical parameters underpinning
the estimates in the relevant market announcement continue to apply and have
not materially changed. The Company confirms that the form and context in
which the Competent Person's findings are presented have not been materially
modified from the original market announcement.
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 (Li(2)O) content or
percent lithium carbonate (Li(2)CO(3)) content.
Lithium carbonate equivalent ("LCE") is the industry standard terminology for,
and is equivalent to, Li(2)CO(3). 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
Li(2)CO(3) value in percent. Use of LCE assumes 100% recovery and no process
losses in the extraction of Li(2)CO(3) from the deposit.
Lithium resources and reserves are usually presented in tonnes of LCE or Li.
The standard conversion factors are set out in the table below:
Table: Conversion Factors for Lithium Compounds and Minerals
Convert from Convert to Li Convert to Li(2)O Convert to Li(2)CO(3) Convert to LiOH.H(2)O
Lithium Li 1.000 2.153 5.325 6.048
Lithium Oxide Li(2)O 0.464 1.000 2.473 2.809
Lithium Carbonate Li(2)CO(3) 0.188 0.404 1.000 1.136
Lithium Hydroxide LiOH.H(2)O 0.165 0.356 0.880 1.000
Lithium Fluoride LiF 0.268 0.576 1.424 1.618
WEBSITE
A copy of this announcement is available from the Company's website at
www.europeanmet.com/announcements/ (http://www.europeanmet.com/announcements/)
.
ENQUIRIES:
European Metals Holdings Limited
Keith Coughlan, Executive Chairman Tel: +61 (0) 419 996 333
Email: keith@europeanmet.com (mailto:keith@europeanmet.com)
Kiran Morzaria, Non-Executive Director Tel: +44 (0) 20 7440 0647
Henko Vos, Company Secretary Tel: +61 (0) 400 550 042
Email: cosec (mailto:shannon@europeanmet.com) @europeanmet.com
Zeus Capital Limited (Nomad & Broker)
James Joyce / Darshan Patel Tel: +44 (0) 203 829 5000
(Corporate Finance)
Harry Ansell (Broking)
BlytheRay (Financial PR)
Tim Blythe Tel: +44 (0) 20 7138 3222
Megan Ray
Chapter 1 Advisors (Financial PR - Aus)
David Tasker Tel: +61 (0) 433 112 936
The information contained within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulation (EU) No.
596/2014 ("MAR") as it forms part of UK domestic law by virtue of the European
Union (Withdrawal) Act 2018 and is disclosed in accordance with the Company's
obligations under Article 17 of MAR.
JORC Code, 2012 Edition - Table 1
Section 1 Sampling Techniques and Data
Criteria JORC Code explanation Commentary
Sampling techniques · Nature and quality of sampling (eg cut channels, random chips, or · Between 2014 and 2021, the Company commenced a core drilling
specific specialised industry standard measurement tools appropriate to the program and collected samples from core splits in line with JORC Code
minerals under investigation, such as down hole gamma sondes, or handheld XRF guidelines.
instruments, etc). These examples should not be taken as limiting the broad
meaning of sampling. · Sample intervals honour geological or visible mineralisation
boundaries and vary between 50cm and 2m. The majority of samples are 1m in
· Include reference to measures taken to ensure sample representivity length.
and the appropriate calibration of any measurement tools or systems used.
· The samples are half or quarter of core; the latter applied for
· Aspects of the determination of mineralisation that are Material to large diameter core.
the Public Report.
· Between 1952 and 1989, the Cinovec deposit was sampled in two
· In cases where 'industry standard' work has been done this would be ways: in drill core and underground channel samples.
relatively simple (eg 'reverse circulation drilling was used to obtain 1 m
samples from which 3 kg was pulverised to produce a 30 g charge for fire · Channel samples, from drift ribs and faces, were collected during
assay'). In other cases more explanation may be required, such as where there detailed exploration between 1952 and 1989 by Geoindustria n.p. and Rudne Doly
is coarse gold that has inherent sampling problems. Unusual commodities or n.p., both Czechoslovak State companies. Sample length was 1m, channel 10x5cm,
mineralisation types (eg submarine nodules) may warrant disclosure of detailed sample mass about 15kg. Up to 1966, samples were collected using hammer and
information. chisel; from 1966 a small drill (Holman Hammer) was used. 14179 samples were
collected and transported to a crushing facility.
· Core and channel samples were crushed in two steps: to -5mm, then
to -0.5mm. 100g splits were obtained and pulverized to -0.045mm for analysis.
Drilling techniques · Drill type (eg core, reverse circulation, open-hole hammer, rotary · In 2014, three core holes were drilled for a total of 940.1m. In
air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or 2015, six core holes were drilled for a total of 2,455.0m. In 2016, eighteen
standard tube, depth of diamond tails, face-sampling bit or other type, core holes were drilled for a total of 6,459.6m. In 2017, six core holes were
whether core is oriented and if so, by what method, etc). drilled for a total of 2697.1m. In 2018, 5 core holes were drilled for a total
of 1,640.3 and in 2020, 22 core holes were drilled for a total of 6,621.7m.
· In 2014 and 2015, the core size was HQ3 (60mm diameter) in upper
parts of holes; in deeper sections the core size was reduced to NQ3 (44mm
diameter). Core recovery was high (average 98%). Between 2016 and 2021 up to
four drill rigs were used, and select holes employed PQ sized core for upper
parts of the drillholes.
· Historically only core drilling was employed, either from surface
or from underground.
· Surface drilling: 149 holes, total 55,570 meters; vertical and
inclined, maximum depth 1596m (structural hole). Core diameters from 220mm
near surface to 110 mm at depth. Average core recovery 89.3%.
· Underground drilling: 766 holes for 53,126m; horizontal and
inclined. Core diameter 46mm; drilled by Craelius XC42 or DIAMEC drills.
Drill sample recovery · Method of recording and assessing core and chip sample recoveries and · Core recovery for historical surface drill holes was recorded on
results assessed. drill logs and entered into the database.
· Measures taken to maximise sample recovery and ensure representative · No correlation between grade and core recovery was established.
nature of the samples.
· Whether a relationship exists between sample recovery and grade and
whether sample bias may have occurred due to preferential loss/gain of
fine/coarse material.
Logging · Whether core and chip samples have been geologically and · In 2014-2021, core descriptions were recorded into paper logging
geotechnically logged to a level of detail to support appropriate Mineral forms by hand and later entered into an Excel database.
Resource estimation, mining studies and metallurgical studies.
· Core was logged in detail historically in a facility 6km from the
· Whether logging is qualitative or quantitative in nature. Core (or mine site. The following features were logged and recorded in paper logs:
costean, channel, etc) photography. lithology, alteration (including intensity divided into weak, medium and
strong/pervasive), and occurrence of ore minerals expressed in %, macroscopic
· The total length and percentage of the relevant intersections logged. description of congruous intervals and structures and core recovery.
Sub-sampling techniques and sample preparation · If core, whether cut or sawn and whether quarter, half or all core · In 2014-21, core was washed, geologically logged, sample
taken. intervals determined and marked then the core was cut in half. Larger core was
cut in half and one half was cut again to obtain a quarter core sample. One
· If non-core, whether riffled, tube sampled, rotary split, etc and half or one quarter samples was delivered to ALS Global for assaying after
whether sampled wet or dry. duplicates, blanks and standards were inserted in the sample stream. The
remaining drill core is stored on site for reference.
· For all sample types, the nature, quality and appropriateness of the
sample preparation technique. · Sample preparation was carried out by ALS Global in Romania,
using industry standard techniques appropriate for the style of mineralisation
· Quality control procedures adopted for all sub-sampling stages to represented at Cinovec.
maximise representivity of samples.
· Historically, core was either split or consumed entirely for
· Measures taken to ensure that the sampling is representative of the analyses.
in situ material collected, including for instance results for field
duplicate/second-half sampling. · Samples are considered to be representative.
· Whether sample sizes are appropriate to the grain size of the · Sample sizes relative to grain sizes are deemed appropriate for
material being sampled. the analytical techniques used.
Quality of assay data and laboratory tests · The nature, quality and appropriateness of the assaying and · In 2014-21, core samples were assayed by ALS Global. The most
laboratory procedures used and whether the technique is considered partial or appropriate analytical methods were determined by results of tests for various
total. analytical techniques.
· For geophysical tools, spectrometers, handheld XRF instruments, etc, · The following analytical methods were chosen: ME-MS81 (lithium
the parameters used in determining the analysis including instrument make and borate fusion or 4 acid digest, ICP-MS finish) for a suite of elements
model, reading times, calibrations factors applied and their derivation, etc. including Sn and W and ME-4ACD81 (4 acid digest, ICP-AES finish) additional
elements including lithium.
· Nature of quality control procedures adopted (eg standards, blanks,
duplicates, external laboratory checks) and whether acceptable levels of · About 40% of samples were analysed by ME-MS81d (ME-MS81 plus
accuracy (ie lack of bias) and precision have been established. whole rock package). Samples with over 1% tin are analysed by XRF. Samples
over 1% lithium were analysed by Li-OG63 (four acid and ICP finish).
· Standards, blanks and duplicates were inserted into the sample
stream. Initial tin standard results indicated possible downgrading bias;
the laboratory repeated the analysis with satisfactory results.
· Historically, Sn content was measured by XRF and using wet
chemical methods. W and Li were analysed by spectral methods.
· Analytical QA was internal and external. The former subjected
5% of the sample to repeat analysis in the same facility. 10% of samples
were analysed in another laboratory, also located in Czechoslovakia. The QA/QC
procedures were set to the State norms and are considered adequate. It is
unknown whether external standards or sample duplicates were used.
· Overall accuracy of sampling and assaying was proved later by
test mining and reconciliation of mined and analysed grades.
Verification of sampling and assaying · The verification of significant intersections by either independent · During the 2014-21 drill campaigns Geomet indirectly verified
or alternative company personnel. grades of tin and lithium by comparing the length and grade of mineral
intercepts with the current block model.
· The use of twinned holes.
· Documentation of primary data, data entry procedures, data
verification, data storage (physical and electronic) protocols.
· Discuss any adjustment to assay data.
Location of data points · Accuracy and quality of surveys used to locate drill holes (collar · In 2014-21, drill collar locations were surveyed by a registered
and down-hole surveys), trenches, mine workings and other locations used in surveyor.
Mineral Resource estimation.
· Down hole surveys were recorded by a contractor.
· Specification of the grid system used.
· Historically, drill hole collars were surveyed with a great
· Quality and adequacy of topographic control. degree of precision by the mine survey crew.
· Hole locations are recorded in the local S-JTSK Krovak grid.
· Topographic control is excellent.
Data spacing and distribution · Data spacing for reporting of Exploration Results. · Historical data density is very high.
· Whether the data spacing and distribution is sufficient to establish · Spacing is sufficient to establish Measured, Indicated and
the degree of geological and grade continuity appropriate for the Mineral Inferred Mineral Resource Estimates.
Resource and Ore Reserve estimation procedure(s) and classifications applied.
· Areas with lower coverage of Li% assays have been identified as
· Whether sample compositing has been applied. Exploration Targets.
· Sample compositing to 1m intervals has been applied
mathematically prior to estimation but not physically.
Orientation of data in relation to geological structure · Whether the orientation of sampling achieves unbiased sampling of · In 2014-21, drill hole azimuth and dip was planned to intercept
possible structures and the extent to which this is known, considering the the mineralized zones at near-true thickness. As the mineralized zones dip
deposit type. shallowly to the south, drill holes were vertical or near vertical and
directed to the north. Due to land access restrictions, certain holes could
· If the relationship between the drilling orientation and the not be positioned in sites with ideal drill angle.
orientation of key mineralised structures is considered to have introduced a
sampling bias, this should be assessed and reported if material. · Geomet has not directly collected any samples underground because
the workings are inaccessible at this time.
· Based on historic reports, level plan maps, sections and core
logs, the samples were collected in an unbiased fashion, systematically on two
underground levels from drift ribs and faces, as well as from underground
holes drilled perpendicular to the drift directions. The sample density is
adequate for the style of deposit.
· Multiple samples were taken and analysed by the Company from the
historic tailing repository. Only lithium was analysed (Sn and W too low).
The results matched the historic grades.
Sample security · The measures taken to ensure sample security. · In the 2014-21 programs, only Geomet's employees and contractors
handled drill core and conducted sampling. The core was collected from the
drill rig each day and transported in a company vehicle to the secure Geomet
premises where it was logged and cut. Geomet geologists supervised the
process and logged/sampled the core. The samples were transported by
Geomet personnel in a company vehicle to the ALS Global laboratory pick-up
station. The remaining core is stored under lock and key.
· Historically, sample security was ensured by State norms applied
to exploration. The State norms were similar to currently accepted best
practice and JORC guidelines for sample security.
Audits or reviews · The results of any audits or reviews of sampling techniques and data. · Review of sampling techniques was carried out from written
records. No flaws found.
Section 2 Reporting of Exploration Results
(Criteria listed in section 1 also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral tenement and land tenure status · Type, reference name/number, location and ownership including · In June 2020, the Czech Ministry of the Environment granted
agreements or material issues with third parties such as joint ventures, Geomet three Preliminary Mining Permits which cover the whole of the Cinovec
partnerships, overriding royalties, native title interests, historical sites, deposit. The permits are valid until 2028.
wilderness or national park and environmental settings.
· Geomet plans to amalgamate these into a single Final Mining
· The security of the tenure held at the time of reporting along with Permit.
any known impediments to obtaining a licence to operate in the area.
Exploration done by other parties · Acknowledgment and appraisal of exploration by other parties. · There has been no acknowledgment or appraisal of exploration by
other parties.
Geology · Deposit type, geological setting and style of mineralisation. · Cinovec is a granite-hosted tin-tungsten-lithium deposit.
· Late Variscan age, post-orogenic granite intrusion tin and
tungsten occur in oxide minerals (cassiterite and wolframite). Lithium occurs
in zinnwaldite, a Li-rich muscovite.
· Mineralization in a small granite cupola. Vein and greisen
type. Alteration is greisenisation, silicification.
Drill hole Information · A summary of all information material to the understanding of the · Reported previously.
exploration results including a tabulation of the following information for
all Material drill holes:
o easting and northing of the drill hole collar
o elevation or RL (Reduced Level - elevation above sea level in metres) of the
drill hole collar
o dip and azimuth of the hole
o down hole length and interception depth
o hole length.
· If the exclusion of this information is justified on the basis that
the information is not Material and this exclusion does not detract from the
understanding of the report, the Competent Person should clearly explain why
this is the case.
Data aggregation methods · In reporting Exploration Results, weighting averaging techniques, · Reporting of exploration results has not and will not include
maximum and/or minimum grade truncations (eg cutting of high grades) and aggregate intercepts.
cut-off grades are usually Material and should be stated.
· Metal equivalent not used in reporting.
· Where aggregate intercepts incorporate short lengths of high grade
results and longer lengths of low grade results, the procedure used for such · No grade truncations applied.
aggregation should be stated and some typical examples of such aggregations
should be shown in detail.
· The assumptions used for any reporting of metal equivalent values
should be clearly stated.
Relationship between mineralisation widths and intercept lengths · These relationships are particularly important in the reporting of · Intercept widths are approximate true widths.
Exploration Results.
· The mineralization is mostly of disseminated nature and
· If the geometry of the mineralisation with respect to the drill hole relatively homogeneous; the orientation of samples is of limited impact.
angle is known, its nature should be reported.
· For higher grade veins care was taken to drill at angles ensuring
· If it is not known and only the down hole lengths are reported, there closeness of intercept length and true widths.
should be a clear statement to this effect (eg 'down hole length, true width
not known'). · The block model accounts for variations between apparent and true
dip.
Diagrams · Appropriate maps and sections (with scales) and tabulations of · Appropriate maps and sections have been generated by Geomet and
intercepts should be included for any significant discovery being reported independent consultants. Available in customary vector and raster outputs and
These should include, but not be limited to a plan view of drill hole collar partially in consultant's reports.
locations and appropriate sectional views.
Balanced reporting · Where comprehensive reporting of all Exploration Results is not · Balanced reporting in historic reports guaranteed by norms and
practicable, representative reporting of both low and high grades and/or standards, verified in 1997 and 2012 by independent consultants.
widths should be practiced to avoid misleading reporting of Exploration
Results. · The historic reporting was completed by several State
institutions and cross validated.
Other substantive exploration data · Other exploration data, if meaningful and material, should be · Data available: bulk density for all representative rock and ore
reported including (but not limited to): geological observations; geophysical types; (historic data + 92 measurements in 2016-21 from current core holes);
survey results; geochemical survey results; bulk samples - size and method of petrographic and mineralogical studies, hydrological information, hardness,
treatment; metallurgical test results; bulk density, groundwater, geotechnical moisture content, fragmentation etc.
and rock characteristics; potential deleterious or contaminating substances.
Further work · The nature and scale of planned further work (eg tests for lateral · Grade verification sampling from underground or drilling from
extensions or depth extensions or large-scale step-out drilling). surface. Historically-reported grades require modern validation in order to
improve resource classification.
· Diagrams clearly highlighting the areas of possible extensions,
including the main geological interpretations and future drilling areas, · The number and location of sampling sites will be determined from
provided this information is not commercially sensitive. a 3D wireframe model and geostatistical considerations reflecting grade
continuity.
· The geologic model will be used to determine if any infill
drilling is required.
· The deposit is open down-dip on the southern extension, and
locally poorly constrained at its western and eastern extensions, where
limited additional drilling might be required.
· No large-scale drilling campaigns are required.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to
this section.)
Criteria JORC Code explanation Commentary
Database integrity · Measures taken to ensure that data has not been corrupted by, for · Assay and geologic data were compiled by Geomet staff from
example, transcription or keying errors, between its initial collection and primary historic records, such as copies of drill logs and large scale sample
its use for Mineral Resource estimation purposes. location maps.
· Data validation procedures used. · Sample data were entered into Excel spreadsheets by Geomet staff.
· The database entry process was supervised by a Professional
Geologist who works for Geomet.
· The database was checked by independent competent persons (Lynn
Widenbar of Widenbar & Associates).
Site visits · Comment on any site visits undertaken by the Competent Person and the · The site was visited by Dr. Pavel Reichl who identified the
outcome of those visits. previous shaft sites, tails dams and observed the mineralisation underground
through an adjacent mine working and was previously the Competent Person for
· If no site visits have been undertaken indicate why this is the case. exploration results.
· The current Competent Person for exploration results, Dr. Vojtech
Sesulka, has visited the site on multiple occasions and has been involved in
2014 to 2021 drilling campaigns.
· The site was visited in June 2016 by Mr. Lynn Widenbar, the
Competent Person for Mineral Resource Estimation. Diamond drill rigs were
viewed, as was core; a visit was carried out to the adjacent underground mine
in Germany which is a continuation of the Cinovec Deposit.
Geological interpretation · Confidence in (or conversely, the uncertainty of) the geological · The overall geology of the deposit is relatively simple and well
interpretation of the mineral deposit. understood due to excellent data control from surface and underground.
· Nature of the data used and of any assumptions made. · Nature of data: underground mapping, structural measurements,
detailed core logging, 3D data synthesis on plans and maps.
· The effect, if any, of alternative interpretations on Mineral
Resource estimation. · Geological continuity is good. The grade is highest and shows
most variability in quartz veins.
· The use of geology in guiding and controlling Mineral Resource
estimation. · Grade correlates with degree of silicification and greisenisation
of the host granite.
· The factors affecting continuity both of grade and geology.
· The primary control is the granite-country rock contact. All
mineralization is in the uppermost 200m of the granite and is truncated by the
contact.
Dimensions · The extent and variability of the Mineral Resource expressed as · The Cinovec Deposit strikes north-south, is elongated, and dips
length (along strike or otherwise), plan width, and depth below surface to the gently south parallel to the upper granite contact. The surface projection
upper and lower limits of the Mineral Resource. of mineralization is about 1km long and 900m wide.
· Mineralization extends from about 200m to 500m below surface.
Estimation and modelling techniques · The nature and appropriateness of the estimation technique(s) applied · Block estimation was carried out in Micromine 2021.5 using
and key assumptions, including treatment of extreme grade values, domaining, Ordinary Kriging interpolation.
interpolation parameters and maximum distance of extrapolation from data
points. If a computer assisted estimation method was chosen include a · A geological domain model was constructed using Leapfrog software
description of computer software and parameters used. with solid wireframes representing greisen, granite, greisenised granite and
the overlying barren rhyolite. This was used to both control interpolation and
· The availability of check estimates, previous estimates and/or mine to assign density to the model (2.57 for granite, 2.70 for greisen and 2.60
production records and whether the Mineral Resource estimate takes appropriate for all other material).
account of such data.
· Analysis of sample lengths indicated that compositing to 1m was
· The assumptions made regarding recovery of by-products. necessary.
· Estimation of deleterious elements or other non-grade variables of · Search ellipse sizes and orientations for the estimation were
economic significance (e.g. sulphur for acid mine drainage characterisation). based on drill hole spacing, the known orientations of mineralisation and
variography.
· In the case of block model interpolation, the block size in relation
to the average sample spacing and the search employed. · An "unfolding" search strategy was used which allowed the search
ellipse orientation to vary with the locally changing dip and strike.
· Any assumptions behind modelling of selective mining units.
· After statistical analysis, a top cut of 5% was applied to Sn%
· Any assumptions about correlation between variables. and W%; a 1.2% top cut is applied to Li%.
· Description of how the geological interpretation was used to control · Sn% and Li% were then estimated by Ordinary Kriging within the
the resource estimates. mineralisation solids.
· Discussion of basis for using or not using grade cutting or capping. · 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
· The process of validation, the checking process used, the comparison 8 composites were required.
of model data to drill hole data, and use of reconciliation data if available.
· 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 10m (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, swath plots and
production reconciliation. All methods produced satisfactory results.
Moisture · Whether the tonnages are estimated on a dry basis or with natural · Tonnages are estimated on a dry basis using the average bulk
moisture, and the method of determination of the moisture content. density for each geological domain.
Cut-off parameters · The basis of the adopted cut-off grade(s) or quality parameters · A series of alternative cutoffs was used to report tonnage and
applied. grade: Lithium 0.1%, 0.2%, 0.3% and 0.4%.
· The final reporting cutoff of 0.1% Li was chosen based on
underground mining studies carried out By Bara Consulting in 2017 while
developing an initial Probable Ore Reserve Estimate.
Mining factors or assumptions · Assumptions made regarding possible mining methods, minimum mining · Mining is assumed to be by underground methods, with fill.
dimensions and internal (or, if applicable, external) mining dilution. It is
always necessary as part of the process of determining reasonable prospects · An updated Preliminary Feasibility Study prepared in 2019
for eventual economic extraction to consider potential mining methods, but the established that it was feasible and economic to use large-scale, long-hole
assumptions made regarding mining methods and parameters when estimating sub-level open stope mining.
Mineral Resources may not always be rigorous. Where this is the case, this
should be reported with an explanation of the basis of the mining assumptions · The 2022 updated Preliminary Feasibility Study establishes that
made. it is feasible and economic to mine using long hole open stoping with paste
backfill.
· Using a total processing cost of $41/t and a recovery of 77% of
Li grade in ROM ore, a gross payable value per ROM ore tonne of $96/t ($55/t
net margin) has been assumed before inclusion in the 2022 PFS mine plan.
Metallurgical factors or assumptions · The basis for assumptions or predictions regarding metallurgical · Successful locked-cycle tests ("LCTs") carried out in 2022, a
amenability. It is always necessary as part of the process of determining pilot programme carried out in 2023 and further optimisation LCTs post-pilot
reasonable prospects for eventual economic extraction to consider potential programme carried out in 2024 demonstrate the Cinovec project's ability to
metallurgical methods, but the assumptions regarding metallurgical treatment produce battery-grade lithium carbonate.
processes and parameters made when reporting Mineral Resources may not always
• European Metals has also demonstrated that Cinovec battery grade lithium
be rigorous. Where this is the case, this should be reported with an carbonate can be easily converted into lithium hydroxide monohydrate with a
explanation of the basis of the metallurgical assumptions made. commonly utilised liming plant process.
• Six LCTs were run in 2022 and the crude lithium carbonate from LCTs 4, 5
and 6 was successfully converted to battery grade lithium carbonate.
• Lithium recoveries of up to 93% were achieved in the LCTs performed.
• The LCTs and the pilot programme tested zinnwaldite concentrate from the
southern part of Cinovec, representative of the
first five years of mining.
· The 2023 pilot
programme successfully demonstrated the hydrometallurgical process flowsheet
on a semi-industrial batch-continuous basis.
· Nine LCTs performed at Nagrom Laboratories in 2024 successfully
demonstrated that the sodium sulphate roast reagent can be replaced with the
mixed sulphate waste stream. These LCT results were incorporated into the
SysCAD software model, which determined 89.5% overall lithium recovery for the
LCP flowsheet.
· Extensive testwork was conducted on Cinovec ore in the past.
Testing culminated with a pilot plant trial in 1970, where three batches of
Cinovec ore were processed, each under slightly different conditions. The best
result, with a tin recovery of 76.36%, was obtained from a batch of 97.13t
grading 0.32% Sn. A more elaborate flowsheet was also investigated and with
flotation produced final Sn and W recoveries of better than 96% and 84%,
respectively.
· Historical laboratory testwork also demonstrated that lithium can
be extracted from the ore (lithium carbonate was produced from 1958-1966 at
Cinovec).
Environmental factors or assumptions · Assumptions made regarding possible waste and process residue · Cinovec is in an area of historic mining activity spanning the
disposal options. It is always necessary as part of the process of determining past 600 years. Extensive State exploration was conducted until 1990.
reasonable prospects for eventual economic extraction to consider the
potential environmental impacts of the mining and processing operation. While · The property is located in a sparsely populated area, most of the
at this stage the determination of potential environmental impacts, land belongs to the State. Few problems are anticipated with regards to the
particularly for a greenfields project, may not always be well advanced, the acquisition of surface rights for any potential underground mining operation.
status of early consideration of these potential environmental impacts should
be reported. Where these aspects have not been considered this should be · The envisaged mining method will see much of the waste and
reported with an explanation of the environmental assumptions made. tailings used as underground fill.
· Waste rock will be disposed of by re-sale to offtakers in the
region.
· Tailings will be disposed of in a dry-stack facility located at
Severočeské doly's (SD) Doly Nástup Tušimice coal mine near Chomutov.
Bulk density · Whether assumed or determined. If assumed, the basis for the · Historical bulk density measurements were made in a laboratory.
assumptions. If determined, the method used, whether wet or dry, the frequency
of the measurements, the nature, size and representativeness of the samples. · The following densities were applied:
· The bulk density for bulk material must have been measured by methods · 2.57 for granite
that adequately account for void spaces (vugs, porosity, etc), moisture and
differences between rock and alteration zones within the deposit. · 2.70 for greisen
· Discuss assumptions for bulk density estimates used in the evaluation · 2.60 for all other material
process of the different materials.
Classification · The basis for the classification of the Mineral Resources into · The new 2014 to 2021 drilling has confirmed the Lithium
varying confidence categories. mineralisation model and allowed the Mineral Resource to be classified in the
Measured, Indicated and Inferred categories.
· Whether appropriate account has been taken of all relevant factors
(i.e. relative confidence in tonnage/grade estimations, reliability of input · The detailed classification is based on a combination of drill
data, confidence in continuity of geology and metal values, quality, quantity hole spacing and the output from the kriging interpolation.
and distribution of the data).
· Measured material is located in the south of the deposit in the
· Whether the result appropriately reflects the Competent Person's view area of new infill drilling carried out between 2014 and 2021.
of the deposit.
· Material outside the classified area has been used as the basis
for an Exploration Target.
· The Competent Person (Lynn Widenbar) endorses the final results
and classification.
Audits or reviews · The results of any audits or reviews of Mineral Resource estimates. · Wardell Armstrong International, in their review of Lynn
Widenbar's initial resource estimate stated "the Widenbar model appears to
have been prepared in a diligent manner and given the data available provides
a reasonable estimate of the drillhole assay data at the Cinovec deposit".
Discussion of relative accuracy/ confidence · Where appropriate a statement of the relative accuracy and confidence · In 2012, WAI carried out model validation exercises on the
level in the Mineral Resource estimate using an approach or procedure deemed initial Widenbar model, which included visual comparison of drilling sample
appropriate by the Competent Person. For example, the application of grades and the estimated block model grades, and Swath plots to assess spatial
statistical or geostatistical procedures to quantify the relative accuracy of local grade variability.
the resource within stated confidence limits, or, if such an approach is not
deemed appropriate, a qualitative discussion of the factors that could affect · A visual comparison of Block model grades vs drillhole grades was
the relative accuracy and confidence of the estimate. carried out on a sectional basis for both Sn and Li mineralisation. Visually,
grades in the block model correlated well with drillhole grade for both Sn and
· The statement should specify whether it relates to global or local Li.
estimates, and, if local, state the relevant tonnages, which should be
relevant to technical and economic evaluation. Documentation should include · Swath plots were generated from the model by averaging composites
assumptions made and the procedures used. and blocks in all 3 dimensions using 10m panels. Swath plots were generated
for the Sn and Li estimated grades in the block model, these should exhibit a
· These statements of relative accuracy and confidence of the estimate close relationship to the composite data upon which the estimation is based.
should be compared with production data, where available. As the original drillhole composites were not available to WAI. 1m composite
samples based on 0.1% cut-offs for both Sn and Li assays were
· Overall Swath plots illustrate a good correlation between the
composites and the block grades. As is visible in the Swath plots, there has
been a large amount of smoothing of the block model grades when compared to
the composite grades, this is typical of the estimation method.
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