REG - Zinnwald Lithium PLC - Operational Update

Zinnwald LithiumAnnouncement

23/11/2022 07:00

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RNS Number : 2702H  Zinnwald Lithium PLC  23 November 2022

Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information as stipulated under the
UK Market Abuse Regulation. With the publication of this announcement, this
information is now considered to be in the public domain.

 

Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector: Mining

23 November 2022

Zinnwald Lithium plc

("Zinnwald Lithium" or the "Company")

Operational update

 

Zinnwald Lithium plc, the German focused lithium development company, is
pleased to provide an operational update as it advances its 100% owned
Zinnwald Lithium Project (the "Project") in Germany towards its goal of a
materially expanded Mineral Resource Estimate ("MRE") and completion of a
Bankable Feasibility Study ("BFS") by the end of 2023.

 

HIGHLIGHTS

·    Completed 13 in-fill drillholes and 4,311m at core Zinnwald license -
programme aims, inter alia, to assess the potential to accommodate greater
mining capacity for expanded lithium output

o  First assays from four drillholes include long mineralised intervals such
as 2,503ppm Li over 86.4m and 1,846ppm Li over 121m within which there are
several high-grade core intervals including of 4,286ppm Li over 4.6m and
4,345ppm Li  over 6.5m

o  Initial drill results support the plan to consider the Albite Granites
(previously referred to as "Ore Type 2" in the recent Preliminary Economic
Assessment ("PEA")) for the Mineral Resource and future mine plan, with
potential to materially increase the total Mineral Resource

·    Awaiting initial assay results at Falkenhain exploration license
where the first drillhole has been completed to a depth of 600m

·    Extended exploration license at Falkenhain by three years

·    Advancing testwork related to production processes

o  Confirmed ratios of high grade technical / fertiliser grade by-product
that can be achieved, which will form the basis for higher level engineering
studies

o  Additional tests being undertaken to confirm the mineral processing
assumptions for Albite Granites as part of the future mining feed

·    Completed environmental surveys at areas under consideration for the
Project, which will be utilised to determine the scope of the Environmental
Impact Assessment ("EIA")

·    Strengthening relationships with leading partners:

o  SRK Consulting UK Ltd - providing Competent Person ("CP") support and
guidance for the Project

o  TheiaX GmbH - assisting with cutting edge hyperspectral scanning of
drill-core to be used in the geo-metallurgical optimisation of the Project

o  Metso Outotec - providing expert support in advancing the mineral
processing concept and engineering

o  Epiroc - developing plans for an electrically powered mining operation

o  GICON / GLU - supporting in the permitting process of mining assets in the
state of Saxony

·    As at the date of this announcement, the Company has funds on hand of
€4.4 million

 

Zinnwald Lithium CEO, Anton du Plessis, said: "We continue to make excellent
progress advancing multiple workstreams, including drilling, testwork and
permitting, with the aim of publishing a BFS by the end 2023; this will
further quantify the economic returns of the recently published PEA, which
reported a pre-tax NPV8 of US$1,605m, IRR of 39.0%, $192m EBITDA and a payback
of 3.3 years.

 

"Accordingly, initial results from an in-fill drill programme at our key
deposit to optimise the mine plan and build the scale of our lithium hydroxide
output have supported the potential to apply larger scale mining methods that
can deliver higher economic returns.  Furthermore, testwork programmes
related to mineral processing and by-product production are making headway,
while studies to advance the various permit applications including the EIA are
also advancing.  We hope to keep up the pace of activity as we move into
2023."

 

DETAILS

Zinnwald Lithium has made good progress advancing its 100% owned Zinnwald
Lithium Project in Germany as it looks to become an important supplier of
lithium hydroxide to Europe's fast-growing battery sector.

 

The Company's plan is to complete a BFS by the end of 2023, subject to
financing, with a key interim stage being the completion of an updated MRE.
The Project's historic MRE was based solely on the Greisen beds and excluded
the Albite Granites. One of the goals of the ongoing in-fill drilling
programme is to materially increase the MRE, which could, in turn, accommodate
greater mining capacity for an expanded Li-product output. Historic estimates
quantified the tonnage potential of the Albite Granites alone at above 200Mt,
an estimate that the Company is working to verify.

 

1.    Resource Development

Zinnwald Lithium Deposit

The Company is progressing an in-fill drilling campaign at its core Zinnwald
Lithium license area (see RNS dated 27 July 2022) to study the mining scale
variability of the ore with the view of applying larger scale mining methods.

 

To date a total of 4,311m over 13 drillholes have been completed with assays
received for 592 m in four of these drillholes. Drilling results have shown a
high degree of grade continuity within the Albite Granite lithology.  These
also include significant levels of lithium ("Li") bearing mineralisation that
were excluded from the previous MRE from 2018. The Company intends to further
investigate the option to include this material in a future update to the MRE.

 

First assays include long mineralised intersections such as 2,503ppm Li over
86.4m and 1,846ppm over 121m as well as high grade core intervals of 4,345ppm
over 6.5m and 4,243ppm over 9.0m. Selected assay intervals are included below.
While the first drill-holes have focussed on the western side of the deposit,
they confirm the prospect of applying larger scale mining methods.

 

The Albite Granite rock indicates favourable geotechnical strength parameters
with good core recovery and Rock Quality Designation ("RQD") values typically
above 90. This is a crucial metric for the application of high productivity
mining methods, which are expected to be a key driver of the Project's
potential economic returns. One of the objectives of this drill campaign is to
further strengthen the geotechnical dataset of the deposit, which will be a
key input into future mine planning activities.

 

On-going hyperspectral results are now being gathered in conjunction with the
logging, cutting and sample preparation of the drill core. This includes the
application of AI-driven computer processing of hyperspectral images of drill
core. The inclusion of geo-metallurgical testing at this stage is critical for
the optimisation of mineral processing design and mine planning.

 

Highlights of Zinnwald In-fill drilling

To test priority geological targets, the Company decided to focus the first
drill-holes on the western side of the deposit, with over 300m long holes
aimed to identify the contact between the Rhyolite host rock and the Albite
Granite, which hosts the Greisen style mineralisation. In addition, the
distribution of high-grade Greisen pockets where grades commonly exceed
4,000ppm Li have been of interest.

 

Continuous mineralisation intercepts exceeding 1,000ppm Li were selected to
highlight the dimensions of the mineralisation. The high-grade selection was
based on lithology and a minimum length of four meters.

 

The first results from this programme include the following and confirm the
expectations regarding high grades in the Greisen:

·    Drillhole ZGLi- 024 - 135.79-227.00m (91.21m) Average 1,786ppm Li

·    Drillhole ZGLi- 025 -  93.00m-97.60m (4.60m) Average 4,286ppm Li

·    Drillhole ZGLi- 025 - 111.00-232.00m (121.00m) Average 1,846ppm Li

·    Drillhole ZGLi-026 - 166.60-253.00m (86.40m) Average 2,503ppm Li

o  Including 209.00-218.00mm (9.00m) Average 4,243ppm Li

·    Drillhole ZGLi-028 - 54.77-107.60m (52.83m) Average 2,587ppm Li

o  Including 74.47-81.00m (6.53m) Average 4,345ppm Li

 

Falkenhain Exploration drilling

During September, the Company was informed by the Saxony Mining Authority
("SOBA") that its application to extend its exploration license at Falkenhain
was successful. The exploration license is now valid until the 31 December
2025. This exploration licence is located 7km north from the core Zinnwald
License.

 

The Company is currently undertaking an exploration drill programme consisting
of ten diamond drill holes at the Falkenhain license to test historic drill
data and better determine the deposit's resource potential.  The first
exploration drill hole has been completed to a depth of 600m and the Company
is awaiting the initial assay results.

 

2.    Testwork related to Production Processes

The technical scoping study for potassium sulphate ("SOP) and precipitated
calcium carbonate ("PCC") product optimisation has been completed, which
confirmed the ratios of high grade technical / fertiliser grade SOP products
that can be achieved. This work specifically considered the operational
aspects of producing various quantities of SOP products and will form the
basis for higher level engineering studies.

 

Additional tests to further confirm the mineral processing assumptions for the
Albite Granites as part of the future mining feed are being undertaken at UVR
FIA GmbH in Freiberg. This principally considers the processing
characteristics, mineralogy, and geo-metallurgy of the Albite Granite, which
also holds significant amounts of lithium bearing mineralisation.

 

3.    Permitting / ESG / Sustainability Matters

Permitting

The Company has started the process to secure its Mandatory Framework
Operation Plan ("MFOP") permit required for the commencement of all
operations.  The MFOP permit includes all required environmental permits.

 

Environment

In line with its strict environmental policy, the Company is closely
monitoring site conditions with regards to current drilling activities at the
Zinnwald and Falkenhain licenses  and frequent coordination meetings with the
regional nature protection agency and environmental surveyors have been held.
The preservation of the existing nature and areas of recreation is a key
concern to the Company.

 

Additionally, this month, environmental surveys were completed at areas under
consideration for the Project. The surveys will be utilised to determine the
scope of the Environmental Impact Assessment ("EIA").

 

Social

The Company maintains a positive relationship with the local community and
continuously engages with various local organisations and authorities.  As
well as conducting a public information event about the Project in Zinnwald,
local elected representatives are continuously updated about the progress of
the drill-campaign and the Company's local site office in Zinnwald is almost
permanently open to address any questions by local stakeholders.
Furthermore, the Company has donated to several local associations and public
institutions such as the local Kindergarten and the volunteer fire brigade.

 

4.    Partnerships

SRK Consulting UK Ltd ("SRK")

SRK is providing CP  support and guidance for the campaign. SRK is an
independent, international consulting practice providing focused advice and
solutions to clients, mainly in the earth and water resource industries
offering specialist services for the entire lifecycle of a mining project from
exploration to closure and across the full spectrum of mineral commodities.

 

TheiaX GmbH ("TheiaX")

Following on from initial tests completed earlier in 2022, the Company engaged
TheiaX to carry out a large-scale tailored hyperspectral imaging and
characterisation of historic and new drill cores from both the Zinnwald and
Falkenhain license areas. When identifying and mapping the distribution of key
minerals, TheiaX's products can be used to derive geometallurgical parameters.

 

TheiaX has its headquarters in Freiberg and is a recently established start-up
company spun out from the Helmholtz Institute Freiberg for Resources
Technology.

 

Epiroc Rock Drills AB ("Epiroc")

As announced 1 November 2022, the Company entered into a non-binding
Memorandum of Understanding with Epiroc, a leading provider of electric and
battery-operated mining solutions, to collaborate in the development of a
state-of-the-art mine at the Project. Designing an underground mine to be
operated with fully electrical equipment from the outset can provide material
environmental and cost benefits in terms of reduced ventilation requirements,
lower lifetime operating costs.

 

Metso Outotec Corporation ("Metso Outotec")

The Company has engaged Metso Outotec to assist it in further refining its
process flow sheet ahead of delivery of the BFS. The scope of work includes
verification of historic engineering, the development of a conceptual study to
produce engineering deliverables to enable a smoother transition into basic
engineering and support of further development stages of the Project.  Within
this, state-of-the-art solutions for water recycling and energy optimisation
across mineral processing, pyro- and hydrometallurgical processes are
essential deliverables for the Project.

 

Metso Outotec is a frontrunner in sustainable technologies, end-to-end
solutions and services for the aggregates, minerals processing and metals
refining industries globally.  Headquartered in Helsinki, Finland, and listed
on the Nasdaq Helsinki, Metso Outotec employs over 15,000 people in more than
50 countries and its sales for 2021 were about EUR 4.2 billion.

 

GICON® Großmann Ingenieur Consult ("GICON Group")

For support in all permitting matters, the Company has engaged Geologische
Landesuntersuchung GmbH Freiberg ("GLU"), part of the GICON Group, which has
extensive experience in the permitting process of mining assets in the state
of Saxony.

 

The GICON Group is a group of independent, internationally operating
engineering service providers. GICON's motto is "Sustainable and Innovative",
and the companies of the Group provide complete interdisciplinary engineering
services "from one source".  GLU is an engineering service provider with
broad geological, mining, and geotechnical expertise, that can plan and
implement complex interdisciplinary projects. GLU contribute not only
methodological, scientific, and technical know-how, but also extensive
experience in the fields of mine planning and raw material exploration, as
well as from the specialist areas of engineering geology and geotechnics.

 

5.    Outlook

The Company's near-term priorities are the completion of the in-fill and
exploration drill campaigns. In addition, it is focused on the delivery of a
BFS by the end of 2023, further building on the technical concept detailed in
the PEA published in September 2022.  The PEA demonstrated a robust Project
with very attractive economics and the team is working hard to advance this to
the next stage.

 

As at the date of this announcement, the Company has funds on hand of €4.4
million.

 

The technical information in this announcement has been reviewed on behalf of
Zinnwald Lithium by Martin Pittuck CEng, FGS, MIMMM of SRK Consulting. Mr
Pittuck is a Corporate Consultant of SRK Consulting Ltd. Mr Pittuck has
sufficient experience relevant to the style of mineralisation and type of
deposit under consideration, and to the activity which he is undertaking to
qualify as a Competent Person in accordance with the guidance note for Mining,
Oil & Gas Companies issued by the London Stock Exchange in respect of AIM
Companies, which outlines standards of disclosure for mineral projects.

 

.*ENDS*

 

 For further information visit www.zinnwaldlithium.com or contact:

 

 Anton du Plessis    Zinnwald Lithium plc  info@zinnwaldlithium.com

 Cherif Rifaat
 David Hart          Allenby Capital       +44 (0) 20 3328 5656

 Freddie Wooding     (Nominated Adviser)
 Michael Seabrook    Oberon Capital Ltd    +44 (0) 20 3179 5300

 Adam Pollock        (Broker)
 Isabel de Salis     St Brides Partners    zinnwald@stbridespartners.co.uk (mailto:zinnwald@stbridespartners.co.uk)

 Catherine Leftley   (Financial PR)

 

Notes

AIM quoted Zinnwald Lithium plc (EPIC: ZNWD.L) is focussed on becoming an
important supplier of lithium hydroxide to Europe's fast-growing battery
sector. The Company owns 100% of the Zinnwald Lithium Project in Germany,
which has an approved mining licence, is located in the heart of Europe's
chemical and automotive industries and has the potential to be one of Europe's
more advanced battery grade lithium projects.

 

Reference to Ore / Lithology Types

 

In historic reporting and regulatory news releases, the Albite Greisen
mineralisation, commonly surrounding the higher-grade greisen ore material has
been referred to as "Ore Type 2". In this release, this material will be
referred to as Albite Granite.

 

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