REG - Zinnwald Lithium PLC - Operational Update

Zinnwald LithiumAnnouncement

07/03/2024 07:00

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RNS Number : 9032F  Zinnwald Lithium PLC  07 March 2024

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

07 March 2024

Zinnwald Lithium plc ('Zinnwald Lithium' or the 'Company')

 

Operational Update

 

MRE & positive processing testwork confirm long mine life and greater
annual LiOH production capacity

 

Zinnwald Lithium plc, the European focused lithium company developing the
integrated Zinnwald Lithium Project (the 'Project') in Germany, is pleased to
provide an operational update on recent activities. This follows the updated
Mineral Resource Estimate ('MRE') published in February 2024 (see RNS dated 21
February 2024), which established the Project as the second largest hard rock
lithium project in the EU and the third largest in Europe.

 

HIGHLIGHTS

·    MRE confirmed a 445% increase in tonnes and a 243% increase in
contained lithium.

·    MRE and mineral processing testwork confirmed the feasibility of
including Albite Granites in production plans.

·    Completed mineral processing pilot-scale tests in December 2023
confirming good lithium ('Li') recoveries and mainstream front end flowsheet
design.

·    Commenced Basic Engineering for the mineral processing flowsheet in
December 2023.

·    Confirmed Zinnwaldite concentrate suitability for Metso's alkaline
process at bench-scale; no additives or high temperatures required to achieve
Li-recovery to solution clearly above 95%.

·    Ongoing work to optimise the Project with Bankable Feasibility Study
('BFS') now expected in late 2024 dependent on availability of pilot testing
facilities.

·    Current cash position of €12.3m.

·    Continued to advance other targets within our 100% owned highly
prospective exploration license areas totalling almost 10,000 hectares that
surround the Zinnwald Project.

 

Zinnwald Lithium CEO, Anton du Plessis, commented: "As evidenced by our
recently published updated MRE for the Zinnwald Lithium Project, which
confirmed a 445% increase in tonnes and a 243% increase in contained lithium,
the Project's strategic value within the EU is clear. This substantial
expansion, driven by extensive drilling, positions us as a key player in the
region's lithium market and will, we hope, see our project classified as a
Strategic project within the EU.  In addition, results from various
processing testwork to date has been encouraging, potentially offering
significant advantages in terms of  overall recovery, efficiency, and reduced
impact on the environment.

 

"As we advance the various workstreams and engage with key stakeholders, we
are now aiming to deliver a robust BFS in late 2024. With a strong cash
position and ongoing collaboration with leading partners, we are positioned to
realise the full potential of the Zinnwald Project while prioritising
environmental stewardship and community engagement."

 

OPERATIONAL UPDATE

Zinnwald Lithium continues to make significant progress in the development of
its integrated Lithium Hydroxide ('LiOH') Project in Germany.

 

Updated Mineral Resource Estimate

As announced on 21 February 2024, the Company published an updated independent
MRE for the Zinnwald Lithium Project, which showed a 445% increase in tonnes
and a 243% increase in contained lithium to 429kt in the Measured and
Indicated category versus the previous 2018 MRE. The updated MRE includes 11.3
Mt grading 3,420ppm Li (0.736% Li2O) in the Measured category, 193.5 Mt
grading 2,220ppm Li (0.478% Li2O) in the Measured and Indicated ("M&I")
category, and 33.3 Mt grading 2,140 ppm Li (0.461% Li2O) in the Inferred
category.

 

The increase in overall tonnage is predominantly due to the incorporation of a
broad zone of mineralised granite as well as contribution of an extra 26,911
metres of new drilling over 84 holes.

 

The updated MRE was prepared in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects of the Canadian Securities
Administrators ("NI 43-101") by independent consulting firm Snowden Optiro Ltd
("Datamine International") of Bristol, United Kingdom.

 

The updated MRE establishes the Project as the second largest hard rock
lithium project in the EU and the third largest in Europe as a whole and
underlines the scale and strategic nature of the Project.

 

The Company is undertaking additional testwork on the Albite Granites to be
reviewed by Snowden Optiro over the coming months to assess whether further
resources can be identified.

 

Mining

The mine planning continued with SRK Consulting (Global) Ltd ('SRK'), with the
laterally and vertically extensive Albite Granite domain that now forms part
of the Project's MRE included in the mine plan.

 

As previously announced, large scale sub-level stoping with subsequent
backfill has been determined to be the optimal mining method. Sub-level
stoping offers higher capacity, lower operating expenditure and easier
backfill process than the Room and Pillar-method assumed in the earlier
studies.

 

The large dimensions of both the High Grade External Greisen domain as well as
the Albite Granite domain, now confirmed with the new MRE, will allow
substantially higher lithium grade than the life-of-mine average during the
early production years.

 

Process Development / Testwork / Engineering

The Company has continued its mineral processing, calcination, and
hydrometallurgical testwork programme run by Metso and UVR-FIA in Freiberg
with the initial results from the pilot and bench-scale testwork is
encouraging as further described below.

 

The processing testwork has utilised representative samples generated from
core from the Company's 84 hole drilling campaign including both ore types,
the High Grade Greisen ('HGG') and Albite Granite ('AG').

 

Mineral Processing

Pilot scale mineral processing testwork was completed in December 2023 at the
GTK pilot facilities in Outokumpu, Finland, by GTK and Metso experts. The
results of these tests confirmed the conclusions of the bench scale tests
performed in the summer of 2023 that mineral processing of run-of-mine ore is
achievable using a mainstream front end flowsheet consisting of a comminution
circuit and a rougher-scavenger wet magnetic separation circuit.

 

The material used in the tests was from a representative sample of circa two
tonnes to model the initial 15 years of mine life incorporating a mix of both
HGG and AG. The main conclusions are:

·    A mainstream front end flowsheet can be applied;

·    Anticipated Li-recovery is c. 80 % with a mass pull of c. 18 %; and

·    The same flowsheet is suitable for both of the ore types.

 

The mineral processing flowsheet was designed by Metso, with Basic Engineering
initiated in December 2023. The equipment selection was completed in February
2024.

 

Pyro- and Hydrometallurgy

To ensure the suitability of Zinnwaldite for Metso's proprietary alkaline
leaching, a sample of Zinnwaldite concentrate generated in the mineral
processing pilot testwork was calcined and subsequently leached  at bench
scale at Metso's facilities in Pori, Finland.  The encouraging main findings
are:

·    No additives needed in calcination; significantly less waste material
produced;

·    Temperature clearly below 1000°C; and

·    Li recovery to solution clearly above 95%.

 

This alkaline processing route has the potential to offer significant
advantages in terms of overall recovery, efficiency, and reduced impact on the
environment. Further testwork at pilot-scale is required to confirm the
initial results.

 

The Company is now moving on to the calcination pilot testwork at IBUtech's
facility in Weimar, Germany, under Metso's supervision, to confirm the
parameters of the calcination flowsheet.  Pilot-scale work on the leaching
and refining stages will follow.

 

A representative sample of Zinnwaldite concentrate has also been provided to
K-Utec for tests to confirm that the large-scale tests previously performed by
K-Utec based on HGG concentrate are applicable to and repeatable for the
material derived from a combination of both pre types.

 

Hydrogeology

In February 2024, the Company completed its hydrogeological drill programme
that comprised eight groundwater ('GW') monitoring wells. These included six
deep wells extending to reach the mineralised Albite Granite, and two shallow
drill wells intended to penetrate the Rhyolite rock of the hanging wall.  All
of these wells will be converted to long term ground water monitoring wells to
collate data on an ongoing basis.

 

The results of this programme will support the production of a hydrogeological
underground and surface model.  This model will include information received
from Geomet in regard to data on the Czech side of the border to support the
development of a combined cross-border hydrogeological model. This represents
an essential piece of work for both technical and planning as well as
environmental impact assessment ('EIA') permitting requirements.  The Company
is supported by a group of consultants in this effort, including SRK,
Geologische Landesuntersuchung Freiberg GmbH ('GLU-GICON Group'), Fugro GmbH,
and ERM.

 

Exploration Licenses

Whilst the primary focus is on the development of its core Zinnwald License,
the Company continues to advance targets on its other 100% owned prospective
exploration license areas including Falkenhain, Altenberg, Bärenstein, and
Sadisdorf that surround the Zinnwald license.  The Altenberg exploration
license was renewed in November 2023 for a further three years to February
2027. The Company now has licenses over almost 10,000 hectares in an area that
has been one of the mainstays of German mining for almost 800 years.  The
Company believes that these license areas have the potential for additional
satellite resources to support the longer-term expansion of the Zinnwald
Project as a whole and potentially provide an additional production
opportunity to further expand one of Europe's largest lithium opportunities.

 

Infrastructure

The work defining the optimal solutions for the required infrastructure has
continued based on the potential for higher production levels supported by the
results of the drilling campaign and the metallurgical testwork carried out.
To help to evaluate detailed site options, the Company has engaged Fichtner
GmbH, a German consulting group with experience concerning mining, materials
handling, road, and rail infrastructure as well as all civil works. The group
will evaluate the most suitable, economic, environmentally and socially
sensitive options for all surface facilities.

 

Sustainability / ESG Matters

The Company views sustainability as a guiding principle of its development
strategy and is dedicated to delivering on the commitments to its
shareholders, future investors, clients, employees, local communities, and
other stakeholders.  It believes that transparency and ethical behaviour are
central to any successful group and undertakes all development with respect
for the environment and neighbouring communities.

 

Environmental

In January 2024, Zinnwald Lithium received the Scoping Meeting Report from the
Saxony Mining Authority ('SOBA'), detailing stakeholder feedback on the
Project. The Company is addressing these items in its pursuit of the mandatory
Framework Operating Permit ('MFOP') and is concurrently undergoing the "Early
Spatial Planning Procedure" to ensure compliance with legal requirements and
early public engagement. Previously, in April 2023, Zinnwald Lithium initiated
the formal permitting process by submitting a Scoping Document to SOBA,
leading to a Scoping Meeting in August 2023. This meeting facilitated
discussions on project plans and gathered initial stakeholder feedback, which
will be taken on board in subsequent application stages.

 

The Company has ongoing engagement with all the relevant authorities and other
stakeholders including the State Directorate for spatial planning.

 

Social

Engagement with the local community of Zinnwald remains a priority for the
Company. Accordingly, the Company was delighted to strengthen its team on the
ground in Germany with the appointment of Marko Uhlig as Joint Managing
Director of Zinnwald Lithium GmbH in Q4 2023.  Mr Uhlig holds regular
meetings with local and regional representatives to foster collaboration and
dialogue on community-related matters.

 

The Company is planning to host another Town Hall event in the coming months
to provide further details on the development of the Project, its benefits,
and its aim to mitigate impact on the environment and community.

 

EU Market & Funding Opportunities

In December 2023, the EU Parliament formally adopted the proposed regulation
for the Critical Raw Materials Act ('CRMA'), which the European Council is
expected to approve by the end of March 2024 with the regulation coming into
force in April.  The CRMA proposes benchmarks of 10% of the EU's annual
consumption of lithium for extraction and 50% for processing; proposals to
simplify permitting procedures; and a plan to identify selected strategic
projects to benefit from EU financial support. The CRMA also sets time frames
for strategic projects to secure permits - a maximum 15 months for processing
and recycling project and 27 months for mining. Once the CRMA passes into law,
the EU Commission has indicated that it will invite applications to be
formally designated as a "strategic" project.  The Company intends to apply
for the designation as soon as applications start and believes that it has a
strong case to meet these key criteria, namely, its ability to deliver a
meaningful contribution of LiOH to the EU; the feasibility of its flowsheet;
its sustainability credentials; and its wider benefits to the EU.  The
Company has already started engagement with various EU and German bodies in
regard to both grant funding and the establishment of funds focused on
providing long term equity capital and will continue to do so as the Project
moves towards its Final Investment Decision.

 

OUTLOOK

The Company's strategy is centred on developing a project that is not only
significant in scale but also economically attractive and founded on a robust
technical and sustainable framework. Current and ongoing workstreams are
pivotal to this strategy, with significant progress already achieved and
several key milestones on the horizon. These include ongoing metallurgical
testwork, continuous advancement of hydrogeological drilling campaigns, and
detailed mining planning. Concurrently, the team is engaged in permitting and
commercial activities.

 

The scale of the Increase in the Company's MRE together with the encouraging
initial testwork results related to the Metso alkaline leaching process are
being evaluated in detail. Taken together, they have the potential to
materially increase the possible scale of the Project as well as reduce its
impact in terms of the volumes of waste material produced. Working through the
implications of these to optimise the Project will have an impact on the
expected timing of the BFS, which is now expected to be published in late
2024. An external factor beyond the Company's control that could affect this
timing is the availability of pilot testing facilities, however, the Company
is working closely with its technology partners to minimise the impact of
this.

 

The Company remains well financed with a current cash position of €12.3m and
the Board looks forward to updating the market on progress on all of these
fronts as its various workstreams continue.

 

Qualified Persons

In accordance with the AIM Rules - Note for Mining and Oil & Gas
Companies, the information in this announcement has been reviewed and approved
by Qualified Person EurGeol (#641) Christian Masurenko of Zinnwald Lithium,
Dipl. Geo., Member EFG, Fellow SEG

 

 

*ENDS*

 

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

 

 Anton du Plessis       Zinnwald Lithium plc  info@zinnwaldlithium.com (mailto:info@zinnwaldlithium.com)

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

 Dan Dearden-Williams   (Nominated Adviser)
 Michael Seabrook       Oberon Capital Ltd    +44 (0) 20 3179 5300

 Adam Pollock           (Joint Broker)
 Richard Greenfield     Tamesis Partner LLP   +44 (0) 20 3882 2868

 Charles Bendon         (Joint Broker)
 Isabel de Salis        St Brides Partners    zinnwald@stbridespartners.co.uk (mailto:zinnwald@stbridespartners.co.uk)

 Paul Dulieu            (Financial PR)

 

Notes

AIM quoted Zinnwald Lithium plc (EPIC: ZNWD.L) is focused 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.

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