REG - Zinnwald Lithium PLC - PEA - Robust Economics for German Lithium Project
07/09/2022 07:00
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RNS Number : 5079Y Zinnwald Lithium PLC 07 September 2022
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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
7 September 2022
Zinnwald Lithium plc
("Zinnwald Lithium" or the "Company")
Preliminary Economic Assessment Reports Robust Economics for German Lithium
Project
Zinnwald Lithium plc, the German focused lithium development company, is
pleased to announce that a NI 43-101 standard Preliminary Economic Study ('The
Technical Report' or 'PEA') has been published on its integrated Zinnwald
Lithium Project in Germany ('the Project') focused on supplying battery grade
lithium hydroxide ('LiOH') to the European battery sector.
HIGHLIGHTS
Robust economics with upside to expand production:
· Pre-tax NPV (at 8% discount) of US$1,605m
· Pre-tax Internal Rate of Return ('IRR') of 39.0%
· 3.3 years payback period (post commencement of production)
· US$336.5m initial construction capital cost
· US$6,200 Life of Mine ("LOM") operating costs per tonne LiOH (after
by-product credits)
· US$320.7m Average Annual LOM Revenue
· Post-tax NPV (at 8% discount) US$1,012m
· Post-tax IRR 29.3%
· US$192.0m Average Annual EBITDA with co-products
· US$22,500 per tonne of battery-grade LiOH in the financial model used
for this PEA
Opportunity to be become a key low-cost supplier to Europe's fast-growing
battery:
· Measured and Indicated lithium resource of 35.51 Mt of greisen ore
with a mean lithium grade of 3,519 ppm
· Production of c. 12,000 tonnes per annum ('tpa') of battery grade
(99.5%) LiOH
· LOM: >35 years
· Simple 5-stage processing confirmed by extensive testwork - the
estimated overall recovery rate from ROM to end product (LiOH) is 75.4%
· Includes the production of key by-products:
o c. 57 ktpa potassium sulfate as fertilizer and technical product;
o c. 16 ktpa precipitated calcium carbonate ('PCC'); and
o c. 75 ktpa granite and 100 ktpa sand as by-products
Rapidly expanding market due to an increase in the use of lithium-ion
batteries for electric vehicle and energy storage applications:
· Compound annual growth rate of lithium market for battery
applications projected to be more than 20% per year to 2028 (Roskill)
· 282 Gigafactories at various stages of production/construction, up
from only 3 in 2015 (May 2022: +300), which would require 5 Mt of Lithium each
year compared with 480,000 tonnes produced in 2021 (Benchmark)
· Lack of supply due to a lack of capital investment to build future
mines and estimated $42bn needs to be spent by 2030 to meet demand for lithium
(Benchmark)
· The EU has made it a strategic priority to improve its
self-sufficiency for lithium
· Analysts forecast an inflation adjusted long term price of $23,609
per tonne LiOH through to 2036 with a nominal rate of $33,200 by 2036
(Roskill, March 2022)
Aiming to become a leading European sustainable lithium producer:
· Located close to the German chemical industry enabling it to draw on
a well trained and experienced workforce with well-developed infrastructure
· Integrated, on-site, mining to battery grade product process and
proximity to many of the planned Gigafactories resulting in reduced transport
emissions
· An underground mine in an established mining region with extensive
existing and well-maintained infrastructure
· To be permitted under EU and German environmental rules, some of the
strictest global standards
· Basic process has key elements that are more sustainable than some of
its main rivals including limited water use and less energy intensive than
traditional spodumene-based production
· Potential to be a low or "zero-waste" project, as the vast majority
of both its mined product and co-products have their own large-scale
end-markets
· Bringing industrial activity and jobs back to a region long steeped
in mining history - across the lifetime of the Project, it is estimated to
generate c. €2.0bn in state and federal level taxes
Next steps ahead of planned project construction and production commencing
include:
· Better define the Resources and Reserves that lie within the ore body
at core Zinnwald license with ongoing infill drilling programme
· Complete exploration drilling campaign at the nearby Falkenhain
license to determine the potential for expansion of both the Project's
resources (including tin and tungsten) and the production level
· Collate data and optimize mining plan
· Continue to develop the technologies planned for its processes with
further testwork and refine plans for reducing the overall CO(2) footprint and
operating costs, such as via the use of electric mining equipment
· Continue EIA and other permit application processes, including
baseline studies and other reports
· Evaluate options for the construction strategy - currently EPCM
· Complete further work/negotiations on all infrastructure aspects of
the Project
· Publish Bankable Feasibility Study end 2023
Zinnwald Lithium CEO, Anton du Plessis, commented: "We are delighted with
the results of the PEA for our integrated Zinnwald Lithium Project in Germany,
which reported a headline pre-tax NPV8 of US$1,605m, IRR of 39.0%, $192m
EBITDA and a payback of just 3.3 years. The extremely robust economics in
tandem with the technically proven processing route to deliver circa 12ktpa
battery grade lithium hydroxide to the developing European battery storage/EV
manufacturing sectors, underpins the potential of the Project.
"There remain other positives: the current Measured and Indicated lithium
resource of 35.51 Mt grading 3,519 ppm, which provides feed for over 35 years,
is scalable and the short timeframe to production, targeted for 2026, is very
opportune, given the strong LiOH prices and global rise in green energy
strategies.
"We have made significant progress over the last year, undertaking extensive
research and testwork to re-orient the Project towards producing circa 12ktpa
battery grade lithium hydroxide from the initial plan to produce 5ktpa of
Lithium Fluoride. This optimisation has greatly improved both Zinnwald's
economics and sustainability credentials and I'd like to thank the team and
consultants for all their work.
"Looking ahead, we have an extremely active schedule to crystallise the value
of this project. We are already working on a Bankable Feasibility Study,
which we intend to deliver by the end of 2023 and will continue to evaluate
processing and manufacturing options to ensure the Project achieves economic
and environmental excellence; our aim is to become one of the more sustainable
and investable lithium projects worldwide."
Cautionary Statement Regarding Preliminary Nature of the PEA
Readers are cautioned that the PEA summarised in this press release is
preliminary in nature and is intended to provide an initial, high-level review
of the project's economic potential and design options. The PEA mine plan and
economic model includes numerous assumptions. There is no certainty that the
PEA will be realised. Actual results may vary, perhaps materially. The
projections, forecasts and estimates presented in the PEA constitute
forward-looking statements and readers are urged not to place undue reliance
on such forward-looking statements.
The Mineral Resources referred to in the PEA were announced in a Competent
Persons Report on the Zinnwald Lithium Project dated 20 September 2020.
Zinnwald Lithium confirms that it is not aware of any new information or data
that materially affects the information in the above releases and that all
material assumptions and technical parameters, underpinning the estimates
continue to apply and have not materially changed. Zinnwald Lithium confirms
that the form and context in which the Competent Person's findings are
presented have not been materially modified from the original market
announcements.
SUMMARY
Introduction
A Technical Report was commissioned by Zinnwald Lithium's 100% owned
subsidiary, Deutsche Lithium GmbH ('DL') in relation to its wholly owned
Zinnwald Lithium Project (the "Project") in Saxony, Germany.
The Project is situated near to the town of Altenberg, 35km south of Dresden
and adjacent to the border with the Czech Republic and is located in a
developed area with good infrastructure, services, facilities, and access
roads. Power and water supply is available from well-established existing
regional networks. DL has held license areas in Zinnwald since 2011 and
conducted various drilling campaigns from 2011 to 2017 to delineate a mineral
resource. DL was subsequently granted a mining permit over its core Zinnwald
License (the "License") area of 2,565,800m2 valid to December 2047 (subject to
receipt of operational permits).
A NI 43-101 Feasibility Study Technical Report for the Project was published
in May 2019 and updated in September 2020 (the "2019 FS"). However, this was
based on a smaller scale, niche end-product (Lithium Fluoride) project
designed to be internally financed and integrated to the original owners'
operational strategy. Since June 2021, Zinnwald Lithium Plc ("ZLP") has
refined the development plan in response to the wider lithium market dynamics
and has changed strategy to focus on a larger scale operation that produces
battery-grade Lithium Hydroxide Monohydrate ("LiOH", "LHM" or "LiOH*H(2)0")
products; to optimise the Project from a cost perspective, and also to
minimise the potential impact on the environment and local communities. All
aspects of the Project from mining through to production of the end product
will now be located near to the deposit itself.
The Project described in this Technical Report includes an underground mine
with a nominal output of approximately 880,000 t/a ore at estimated 3,004 ppm
Li and 75,000 t/a barren rock. Ore haulage is via a 7km partly existing
network of underground drives and adits from the "Zinnerz Altenberg" tin mine
which closed in 1991. Processing including mechanical separation, lithium
activation, and lithium fabrication will be carried out at an industrial
facility near the village Bärenstein, in close proximity to the existing
underground mine access and an existing site for tailings deposition with
significant remaining capacity.
The nominal output capacity of the project is targeted at c. 12,000 t/a LiOH
with c. 56,900 t/a of potassium sulphate ("SOP"), which is used as a
fertilizer, as a by-product. Another by-product that is contemplated is
Precipitated Calcium Carbonate ("PCC") a key filling material in the paper
manufacturing process. The estimated mine life covers >35 years of
production. The optimisation of mining methods has been a key consideration to
realise increased total mined tonnage from the Zinnwald mine. This includes
utilising more efficient techniques such as sub-level stoping and Avoca
wherever possible and in preference to the less efficient room and pillar
method.
The economic analysis included in this Technical Report demonstrates the
financial viability of the Project. Based on the assumptions detailed in this
report the Project supports a Pre-tax Net Present Value ("NPV") of US$1.6
billion (at a discount rate of 8%, "NPV8)") and a pre-tax Internal Rate of
Return ("IRR") of 39%. The after tax NPV8 is US$1.0 billion and post-tax IRR
is 29.3% The Project has a mine life of over 35 years and the payback period
is less than four years post commencement of production.
This Technical Report was prepared according to the rules of the National
Instrument 43-101 "Standards of Disclosure for Mineral Projects" developed by
the Canadian Securities Administrators effective as per June 30, 2011. The NI
43-101 follows the recommendations of the Canadian Institute of Mining (CIM)
Standing Committee on Reserve Definitions.
This PEA is preliminary in nature, it includes certain assumptions that are
considered too speculative to have economic considerations applied to them.
There is no certainty that the Project as described in this PEA will be
realised.
Accessibility, Local Resources, Infrastructure and Physiography
DL currently holds four licenses in the area. The core Zinnwald License,
which forms the basis of this report, has a mining classification, and runs to
31 December 2047. It also holds three other exploration licenses at
Falkenhain, Altenberg DL and Sadisdorf, as show in Figure 1 below:
Falkenhain - the license covers an area of 2,957,000 m² and is valid to 31
December 2022. DL has already applied for a 3-year extension and has
commenced a 10-drill hole exploration in September 2022. A geological 3-D
model of the "Falkenhain" license area is being created and further steps will
be taken depending on the results of the drill campaign, such as
laboratory-scale processing tests and the construction of a resource model.
Altenberg DL - the license covers an area of 42,252,700 m² and is valid to 15
February 2024. DL is currently evaluating historical data, which will be
used to define new exploration targets in the area
Sadisdorf - the license covers an area of 2,250,300 m² and is valid to 30
June 2026. The previous holder of the license had defined a JORC compliant
inferred resource of 25 million at a 0.45% Li(2)O grade. DL is reviewing and
evaluating this historic data to determine further exploration steps.
Figure 1: Location plan of the exploration licenses
and mining permission of DL
Geographically, the area shown above forms part of the upper elevations of the
Eastern Erzgebirge Mountains, at elevations of 750 to 880 m a.s.l. The general
topography is typical for a low mountain range with steep valleys and smooth
summits, the latter gently dipping towards north. It comprises wide grasslands
surrounded by forests and is structured by the local river network with
pronounced V-shaped valleys belonging to the Elbe River Basin. Most of the
land use in the area is agriculture and forestry with most surface rights
being privately owned. The surface water bodies are reserved for public water
supply, farming or recreation. With an average of 65 inhabitants per km2 the
region is sparsely populated. The town of Altenberg has a population of 7,785
inhabitants.
The main licence area is close to the town of Altenberg. The motorway A 17 (E
55), which connects Dresden with Prague in the Czech Republic (CZ) bypasses
the property 17 km to the east. Border crossing between Germany and the Czech
Republic at Zinnwald is possible by car and truck. The airports of Dresden,
Berlin and Prague are 70, 230 and 100 km away, respectively. The Altenberg
railway station is located on the north side of the town. The
Heidenau-Altenberg railway (38 km) connects in Heidenau (near Dresden) with
the Elbe valley railway. This railway represents line 22 of the Trans-European
Transport Network (TEN-T).
The overall area is well developed with respect to regional electricity,
sewage, water and gas networks. Electric power, gas and potable water is
available in the region. Area-wide broadband internet access is being rolled
out, but the area is already well covered by German and Czech mobile telephone
networks.
Since the closure of the main regional mining operations 30 years ago
following the reunification of Germany, tourism has become an important local
industry. In addition, the region is home to numerous small and medium-sized
enterprises that are based within in the mechanical, electrotechnical and
automotive industry sectors. However, the region faces the challenge of an
ageing population and the rural exodus of younger people. This is a supporting
factor to local authorities encouraging companies such as DL that are bringing
industrial activity and jobs back to a region long steeped in mining history.
Geology and Mineralization
The area covered in this Technical Report is part of the
Erzgebirge-Fichtelgebirge Anticlinorium, which represents one of the major
allochthonous domains within the Saxo-Thuringian Zone of the Central European
Variscan (Hercynian) Belt. Its geological structure is characterized by a
crystalline basement and post-kinematic magmatites (plutonites and
volcanites). The Zinnwald deposit belongs to the group of greisen deposits.
Greisens are formed by post-magmatic metasomatic alteration of late stage,
geochemically specialized granites and are developed at the upper contacts of
granite intrusions with the country rock. The Zinnwald greisen is bound to an
intrusive complex, which intruded rhyolitic lavas of Upper Carboniferous age
along a major fault structure.
The prospective mineralization is of late Variscan age (about 280 million
years old) and is geologically restricted to the cupola of the geochemically
highly evolved Zinnwald granite. It was in its apical parts underground mined
for veins with tin (cassiterite) and tungsten (wolframite, minor scheelite)
until the end of the Second World War. Lithium is incorporated by a
lithium-bearing mica, which is called "zinnwaldite", a member of the
siderophyllite-polylithionite series, which contains up to 1.9 wt.% lithium.
It is enriched in 10 parallel to subparallel stretching horizons below the
already mined tin mineralization. Individual lithium-bearing greisen beds show
vertical thicknesses of more than 40 m. The mineral assemblage consists of
quartz, Li-F-mica (zinnwaldite), topaz, fluorite and associated cassiterite,
wolframite and minor scheelite and sulfides.
Exploration Status
The first underground mining for tin in the Zinnwald deposit on both sides of
the current border between Germany and the Czech Republic was recorded in the
second half of the 15th century. The "Tiefe-Bünau-Stollen", which was driven
from the year 1686 on, became the most important gallery of the whole Zinnwald
ore field. This adit is part of the visitors' mine "Vereinigt Zwitterfeld zu
Zinnwald" and is located in the mining concession. Tin and minor tungsten
mining on the German side ceased with the end of the Second World War, and on
the Czech side in 1990. From 1890 to 1945 lithium-mica was produced as a
by-product and used as raw material for lithium carbonate production. Lithium
exploration on the German side started again in the 1950s.
DL initially focused its exploration activities on the central Zinnwald
license as well as underground on the accessible parts of the abandoned mine.
An underground sampling campaign was conducted in 2012, which provided a
series of 88 greisen channel samples from the sidewalls of the
"Tiefer-Bünau-Stollen" (752 m a.s.l.) and the "Tiefe-Hilfe-Gottes-Stollen"
galleries (722 m a.s.l.). DL subsequently expanded the work to peripheral
parts of the deposit. Exploration consisted of 10 surface drill holes (9 DDH
and 1 RC DH) completed between 2012 and 2014 with a total length of 2,484 m.
Infill and verification drilling was resumed and completed in 2017 by DL
consisting of 15 surface diamond drill holes with a total length of 4,458.9 m.
Resource Estimates
The Mineral Resources referred to in this PEA are as previously published in
the 2019 FS. In the 2019 FS, the geological and geochemical results of the
exploration campaigns were fully integrated in a data base, which comprises
the following underlying data:
· 76 surface holes,
· 12 underground holes,
· 6,342 lithium assays of core samples covering 6,465 m of core,
· 88 lithium assays from channels; and
· 1,350 lithium assays from pick samples.
DL's exploration samples were analysed by the accredited commercial ALS
laboratory at Roşia Montană, Romania. Duplicates were sent to Activation
Laboratories Ltd. In Ancaster, Canada, for external control. QA/QC procedures
were carried out for due diligence purposes and the results confirmed the
careful sampling and reasonable accuracy and precision of the assays. Twinned
drill holes showed a good match. The initial geological model of several
parallel to sub-parallel stretching mineral horizons ("Ore type 1 greisen
beds") was verified and an authoritative resource assessed.
The general mineral inventory of lithium, shown in Table 1, was estimated from
the block model based on a zero cut-off and without a constraint of minimum
thickness of the ore bodies. It accounts for 53.8 Mt greisen tonnage ("Ore
Type 1") with a rounded mean grade of 3,100 ppm.
Table 1: Lithium Mineral Inventory of Zinnwald
(German part below 740m)
Mineral inventory Volume Tonnage Mean Li grade
"Ore Type 1" [103 m³] [103 tonnes] ppm
Total 19,900 53,800 3,100
Selection criteria for eventual economic extraction (vertical thickness ≥ 2
m, cut-off = 2,500 ppm Li) applied to the mineral inventory result in a
demonstrated (measured and indicated) lithium resource of 35.51 Mt of greisen
ore with a mean lithium grade of 3,519 ppm (see Table 2).
Table 2: Lithium Mineral Resource - Zinnwald,
Base Case
Resource classification Ore Ore Mean Li grade Ore Ore Mean Li grade
volume tonnage ppm volume tonnage ppm
"Ore Type 1" [103 m³] [103 tonnes] [103 m³] [103 tonnes]
greisen beds
Vertical thickness ≥ 2 m, Vertical thickness ≥ 2 m,
cut-off Li = 2,500 ppm cut-off Li = 0 ppm
Measured 6,855 18,510 3,630 8,954 24,176 3,246
Indicated 6,296 17,000 3,399 8,046 21,725 3,114
Inferred 1,802 4,865 3,549 2,675 7,224 2,995
Total (Measured+Indicated) 13,152 35,510 3,519 17,000 45,901 3,183
Internal Dilution
Total (Measured+Indicated+Inferred 4,722 12,749 2,001
The potential of Sn, W and K(2)O have been estimated for the greisen beds as
mean grades for "Ore Type 1" for the German part of the Lithium Zinnwald
Deposit and below 740 m a.s.l.: At a total volume of rounded 15 million cubic
meters and a tonnage of 40 million tonnes, the overall mean tin grade accounts
for approximately 500 ppm, mean tungsten grade for approximately 100 ppm and
mean potassium oxide grade for approximately 3.1 wt.%.
Reserve Estimates
Since this Report summarizes the results of a Preliminary Economic Assessment
(PEA), no Mineral Reserves have yet been estimated for the revised Zinnwald
Lithium Project as per NI 43-101 guidelines. However, for the purpose of
project appraisal, the previously calculated Mineral Reserves from the 2019 FS
report have been used as mining inventory. This PEA includes assumptions for
an optimised of the mining extraction and production methods together with the
almost doubling of the Lithium price and accordingly considers this to be a
conservative and appropriate approach.
For detailed summary on the calculation of these mineral reserves the reader
should refer to the 2019 FS. Some key assumptions are as follows:
· Proven and Probable Mineral Reserves = 31.20 Mt, 3,004 ppm Li
o Including internal dilution (8%) = 2.28 Mt, 1,929 ppm Li
o Including external dilution (20%) = 5.5 Mt, 1,700 ppm Li
Processing and Metallurgical Test Work
Process Stages
The mineral processing consists of 5 stages
· Primary crushing using a jaw crusher
· Secondary crushing using a cone crusher
· Drying of the crushed material
· Dry grinding for liberation
· Dry-magnetic separation
The pyrometallurgical process consists of:
· Fine grinding of mica concentrate to below 315 µm
· Mixing of milled concentrate with suitable additives such as
anhydrite/gypsum and limestone
· Roasting in kilns e.g., rotary
The hydrometallurgical processing consists of:
· De-agglomeration of roasted material
· Leaching of roasted material with hot water
· Purification of the mother leach liquor
· Precipitation, washing and drying of lithium hydroxide
· Sulphate of potassium (SOP)-crystallization
The flow sheet is summarised at a high level in Figure 2 below.
Figure 2: Simplified Project Flowsheet
Test work undertaken
The most recent test work programmes undertaken in 2021 and 2022 built on the
work done for the Feasibility Study, which itself had confirmed the results of
laboratory test work on a technical scale. The earlier FS test work included
flowsheet development test work using a split of a 100t lithium-mica greisen
ore sample, that in turn generate a 50t sample used in the beneficiation work
and a 10t mica concentrate for use in the pyrometallurgical and
hydrometallurgical work. This ore was mined by drilling and blasting in the
Zinnwald visitor underground mine from ore body B, one of the largest ore
bodies in the deposit.
For mineral processing, DL continues to rely on the original metallurgical
test work undertaken by UVR-FIA for the 2019 FS, which comprised the
following:
· 2011 - approximately 20 t of ore that had a mean Li grade of 3,900
ppm.
· 2017 - approximately 100 t of ore that had a mean Li grade of
4,009 ppm.
· DDH core samples: 25 variability samples selected from drill core
from 2012- 2013 and 2017.
For pyrometallurgy, the basic calcination and leaching of Zinnwaldite
concentrate have been tested in several stages and are described in the FS
report. During 2022, a test campaign was carried out at IBU-TEC to:
· Further optimise the mixing ratios of the reagents
· Test the potential to further increase the leaching recovery of
metals, especially potassium
· Confirm that FGD Gypsum can be used as the reagent in the process
For hydrometallurgy, in 2021 further Laboratory scale and Pilot scale
hydrometallurgical test work was carried out at K-UTEC using 5.6 t Calcined
Zinnwaldite. This Calcined Zinnwaldite that originated from calcination tests
carried out in 2018 was used for pilot-scale tests to produce 50 kg of a
reference LiOH product sample as well as for the locked cycle test for process
verification as part of the process design work. The main areas of testwork
were as follows:
· Test the conversion of the leach brine resulting from calcined
Zinnwaldite leaching into LiOH.
· Further development of the removal processes for impurities in the
leach liquor
· Further development of the processes to ensure no downstream quality
issues in the sulphate and carbonate stages of the process
· Improvements to the crystallisation process for the production of
Potassium Sulphate (SOP)
· Lock cycle tests to confirm composition and quantity ratios required
for the mass balance
Summary of results
The key outcomes of the test work are summarized below and the design criteria
that has been used to develop the mass balance are based on these test work
results.
· The mineral processing has been shown to be very robust. The lithium
recovery was above 90 % for both the 20t test work of the PFS (94 %) and the
50t test work of the FS (92 %). The lithium recovery assumed in the FS and the
current PEA is 92 %.
· The pyrometallurgy test work continues to confirm a robust roasting
recipe consistently achieving yields of at least 90% for Lithium and 80% for
Potassium in the leach.
· The hydrometallurgical work included the following all of which
resulted in a battery-grade LiOH with 99.5% purity with a recovery rate of
95%.:
o The extraction of lithium and potassium through water leach of calcined
Zinnwaldite is viable, as well as providing the required amount of leach
liquor to verify the downstream processing.
o The test work around recirculation of the liquors showed the beneficial
effects of minimum sulfuric acid consumption for decarbonisation; minimum
losses of potassium and sulphate in the leach residues and the purification
sludge; and establish a constantly low level of calcium and magnesium
concentration below 5 ppm in the brine for further processing
o To avoid quality issues after downstream processing, the tests show that
the pH value should be lowered to just below 4.5 to avoid these.
o Confirmed the creation of both technical and fertilizer grade SOP with
further work to be done to clarify yields of both. The testwork also confirmed
the process to remove the remaining impurities.
o 4 lock cycles were performed that further developed the mass balance and
the process.
· The estimated overall recovery rate from ROM to end product (LiOH) is
75.4%.
Mining
The mining operation for the Project is planned as an underground mine
development using a main ramp for access to the mine and for ore
transportation from the mine to the surface via access tunnels. The
operation has been designed for an annual output of c. 12,000t of LiOH.
Applying the mineral reserve estimation of 3,004 ppm lithium content, and
estimated Lithium recovery in downstream processes this corresponds to an
average annual ore production of 880,000 tons.
The conceptual plan for mining operations is based on access from Altenberg
Mine on 500 m Reduced Level (RL) advancing upwards with room and pillar,
Avoca, and sublevel stoping methods followed by hardening backfill. On
production levels LHD (Load-Haul-Dump) loaders dump the mined material into
ore passes from where the ROM (Run of Mine) is transported 7 kms to ROM pad
downhill to Bärenstein via the Zinnerz - Altenberg Mine drainage tunnel.
The mine will be first accessed from two locations: From the Zinnerz -
Altenberg Mine with a 4 km tunnel (Access Tunnel) and from Zinnwald with a 1.7
km decline (Ventilation Decline). The two connect at +500 RL in the central
pillar / ore pass area. Once connected the decline functions as a second means
of exit and as a main ventilation route. The cross-section map of the area
shown in Figure 3 shows the drainage access tunnel, as well as the two access
mining tunnels. It also shows the historic tailings facility at IAA Bielatal,
as well as the prospective ore body at the Falkenhain license.
Figure 3: Cross section map of access tunnels to main ore body
In essence, the deposit structure represents an anticline, at the flanks of
which the ore bodies plunge below 400 RL. The Access Tunnel enters the deposit
in the north at 500 RL, which will be the first production level. The level
will be the loading/transportation level for all the material mined on the
level and levels above it. The ore will be transferred on to 500 RL via ore
passes.
The development drives are planned with a 5.0 m by 4.0 m profile and will be
driven by conventional drilling and blasting technology. The sublevels are
planned with a vertical distance of 12.5 m in East and North Flanks and with
25 m spacing in the West Flank. A mining area is first entered on the lowest
level, the location of the drive above is designed based on sludge drilling
profiles with horizontal spacing 12.5 m - 25 m.
For an optimal development of the mine and a steady output of ore material,
the initial development of the mine within the first years will be focused on
the bodies between +500 to +600 RL. The deepest envisaged sublevels are in the
North Flank at +392 RL and in the East Flank at +360 RL. The uppermost
mineable sublevel will be at +688 RL, leaving 20 m vertical distance to the
historic mine workings.
The tailings generated comprise two types. A "quartz-sand" tailing generated
during the mechanical processing of the greisen ore within the processing
plant and a dry Leached Roasted Product ('LRP') tailing generated as residue
from the metallurgical process. Based on the project outline of c.
12,000t/a LHM, c. 610,000 t/a "quartz sand" tailings and about 310,000 t/a
(dry) LRP tailings are generated. The "quartz-sand" tailings represent
basically a sharp-edged crushed grit to fine sand (< 0.1 mm to 1.25 mm
grainsize) and predominantly consist of quartz (> 80 %). This quality of
quartz sand is identical to a building aggregate already being mined nearby
for use in various construction industries. The Company is exploring options
to create a railhead nearby to facilitate the sale and use of this aggregate
rather than having to store it.
During the first years of the production the preferred extraction method is
AVOCA as it allows immediate backfill. The key working principle of this
method is to continuously backfill the excavated stope with waste rock, the
dry LRP and quartz sand. This minimises the risk of any potential subsidence
and could also increase mining recovery of the resource whilst reducing the
need for intermediate storage facilities for materials such as LRP. It is
anticipated that c. 90% of the mined-out void will be backfilled.
The ground water draining to the mine will be collected in settling ponds on
500-level. The clarified excess water will be drained further to the
Bärenstein processing site into a central water treatment plant. The amount
of excess water will change during operation and depends on the weather and
backfill operations. The mine drainage water between the surface and +750 RL
(TBS level) and +720 RL (THG level) is drained through the existing galleries.
Recovery Methods
The Zinnwald Lithium Process Plant is designed to process 880,000 dmt/a of ROM
feed, at an average grade of 0.30 wt.% Li, to produce a minimum of 12,011 t/a
of battery grade LiOH*H2O (equivalent to 10,530 t/a LCE) and 56,887 t/a of
K2SO4 and about 16,000 t/a PCC (precipitated calcium carbonate) by-products.
The potassium sulfate produced is expected to be sold as a sulfate of potash
(SOP) in technical grade and as fertilizer.
The beneficiation plant will operate 24 h/d, using three 8 h shifts per day
from Monday to Friday, 260 d/a. The extraction plant is a continuous 24 h/d
operation, using three 8 h shifts per day, 7 days per week, 365 d/a. Design
plant availabilities are 96 % (6,000 h/a) for the beneficiation plant and 91 %
(8,000 h/a) for the extraction plant.
The flowsheet, as shown in Figure 2, is based on calcium sulfate/calcium
carbonate roasting and consists of the following major unit processes:
· Comminution followed by beneficiation using dry magnetic separation
to recover a lithium mica concentrate.
· Calcium sulfate / carbonate roasting, which converts the lithium and
potassium to water soluble Li2SO4 and K2SO4 in the presence of anhydrite or
gypsum and limestone
· A hydrometallurgical section where the roasted product is leached in
water to form an impure Li2SO4 aqueous pregnant leach solution (PLS).
Impurities are then removed from the PLS using precipitation and ion exchange
prior to the precipitation of battery grade LHM.
· Potassium sulfate is recovered from the mother liquor using
crystallization and selective dissolution.
· Precipitated CaCO(3) (PCC) is precipitated from the PLS
Project Infrastructure
On a high-level basis, the Project is located in a region with developed
infrastructure, services, facilities, and access roads. Power and water are
provided by existing regional supply networks. It is also located close to
the heart of the German automotive and chemical industries. The Project
itself comprises several industrial modules each of which have specific
requirements to local infrastructure, space and proximity to other parts of
the process. Aligned with the conceptual nature of this technical report, the
preferred location is focussed on the geographic area of Zinnwald / Altenberg
for all facilities. However, as required for on-going development of technical
planning and permitting the Project retains some optionality regarding the
precise location of certain facilities.
The Company has prioritised the alignment of Project goals with the concerns
and needs of other stakeholders and minimise the potential impact of the
operation on the local environment, businesses, and residents. By removing the
need to transport large volumes of material via roads of the Altenberg and
Freiberg region (as was considered in previous technical reports), the
expected impact of the operation on the environment and local communities can
be reduced significantly.
The preferred Site Option (shown in Figure 4 below) is in the area near
Bärenstein, due to its key advantages:
· Mine access through existing de-watering adit of the Zinnerz
Altenberg mine (ceased operations in 1991, refurbished in 2020, total useable
length 4 km, with sufficient cross section).
· Quarry site with intermittent operation.
· Existing tailings storage facility from the former Zinnerz Altenberg
mine with remaining capacity.
· Nearby existing rail connection with connection to Dresden.
Figure 4: Local Infrastructure at Altenberg /
Barenstein
The Company has identified a second site location option for the location of
the pyrometallurgical and hydrometallurgical processes at facilities at an
industrial site in Boxberg / Oberlausitz / Kringelsdorf, close to a former
lignite open-pit and coal fired power station operated by LEAG. The site is
approximately 150 km distance by road and accessible by sealed roads. As an
established industrial site, power, gas and other services are already
available at site. The site has a rail line within 1km, is itself however not
connected to the rail network.
Environmental Studies
Due to the revised operational plan that involved a significant increase in
planned production and the location of the refining plant near to the mine
site - the Company has suspended its previous strategy to pursue the
Facultative Framework Operational Plan (FFOP). Instead, the Company will
convert the permitting progress made so far into a regular permitting process,
including EIA/UVP permits within a Mandatory Framework Operation Plan (MFOP)
under mining law.
The overall permitting pathway for the project is subdivided between processes
to be permitted under
· Mining Act, including the mine, its associated infrastructure and the
mechanical separation plant. This includes the Mandatory Framework Operation
Plan (MFOP) approved by the Saxon Mining Authority.
· Bundesimmissionsschutzgesetz (BImSchG) (Federal Emission Protection
Act) can be led by either regional authorities or the mining authority and
evaluates compliance of facilities with existing technical standards as well
as other requirements set by law. It provides for protections from noise and
air pollution, vibration, and other impacts on the environment from human
activity.
· Water Permits - all aspects relevant to water use, potential for
water pollution etc are reviewed and permitted by the water authority, in this
case the lower water authority.
The MFOP provides clarity on a first outline of the planned operation, even if
final technical items are still outstanding. It provides an overview of the
technical process of mining and processing, considerations for environmental
aspects, urban planning and expected impact on residents. The MFOP will
include a specific EIA on all directly mining related assets.
· Note: Following MFOP approval, the Company will also require a
separate Mine Operation Plan Permit to cover the actual construction and
operation of the assets.
The BImSchG Permit under Germany's environmental legal framework ensures that
installations meet all technical minimum standards based on provided technical
plans. DL commissioned G.E.O.S. in 2021 to carry out an updated Environmental
Impact Assessment Screening study to consider several operational concepts,
including trucking ore material over longer distances to external facilities
vs. local processing operations. The study concluded that the option to
concentrate all processing operations at one location will likely have the
least environmental impact of all options under consideration. DL is
currently updating this study for the revisions to the site location and
technical processes and will submit shortly. The EIAs for the
pyrometallurgical and hydrometallurgical plants will fall under the BImSchG.
The Company is committed to being a responsible project developer and
maintains the environmentally acceptable and sustainable construction and
operation of the Project as a paramount principle in its activities. The
Company will comply with all applicable environmental laws and regulations, as
well as other industry codes and standards to which we subscribe, such as:
· Social Impact Assessment - noise, light pollution. Vital for local
stakeholder support.
· Prevention/ mitigation of impact on Animals, Plants and Biodiversity,
based on international best practice.
· Compliance with European Water Framework Directive around
groundwater, surface water, mine water.
· Maintenance of Air Quality
· Ensure that the Project does not compromise local recreation and
tourism
Market Review and Lithium Pricing
Background to Lithium and its production
Lithium compounds typically come from one of two sources - metallic brines or
hard-rock mining of spodumene ores. In many ways, Lithium extraction and
production is a specialty chemicals business rather than a conventional mining
one, and it is that chemicals expertise that plays a vital role in a project's
success, especially for those designed to produce battery grade lithium
compounds. Qualification of battery grade lithium compounds for use in battery
cathode materials can take a long time and is often specific to individual
battery manufacturers/cathode makers.
Brines
Brine is pumped from subsurface reservoirs to surface ponds and evaporated
until the lithium liquor content reaches 6%, when it is removed and processed
into lithium chemicals. This processing, initially into lithium carbonate,
generally occurs on site. Typically, the timetable to produce a saleable
lithium product is in the range of 2 - 3 years, depending on prevailing
weather conditions. Several companies are currently experimenting with
Direct Lithium Extraction (DLE) technologies in an attempt to speed up the
extraction process and utilise lower grade brines. Whilst the application of
DLE to low grade brines has been shown to work at a laboratory scale, large
scale industrial extraction has yet to be demonstrated. Where DLE has been
used in commercially, it has typically been following a pre-concentration step
and using higher-grade brines.
Historically, brine producers have enjoyed a significant advantage on the cost
curve given the fact that there is no mining and crushing involved and their
location in arid regions enables them to utilize evaporative drying. From a
sustainability point of view, brines benefit from a low energy intensity for
production and the technology involved is conventional and well established.
However, it has three main ESG downsides - its water intensity is high and
typically in areas where water is scarce; it also takes up a very large
physical footprint during production and tailings disposal; finally these
sites are typically a long way from the end market for its product with the
resultant transport costs and CO2 emissions.
Hard-rock Mining
Hard rock mining is the more traditional extraction process. Spodumene, a
lithium-containing mineral, is mined and crushed to form a low-grade
concentrate (4-6%). This mineral concentrate is then sold to lithium
processors which use the feedstock to produce lithium chemicals, or to glass
and ceramics producers for use as an additive. Mineral producers, compared
with Brines, have additional costs associated with both hard rock mining and
processing and historically have not benefited from the integration of the
chemical conversion. Currently the majority of mineral producers are located
in Australia and typically supply concentrate to lithium processors in
China. As such they typically often have extensive transport costs due to
the low-grade concentrate and distances covered.
From a sustainability point of view, Spodumenes benefit from a relatively low
water intensity in their production process and the extraction technology is
well established. However, it has three main ESG downsides - the physical
footprint of the sites are usually large and often open-pit; the energy
required to process a spodumene concentrate is high; and the transport
distances are usually extremely large raising the overall CO2 footprint
(especially given that they are effectively transporting 94% waste product).
Further, as noted above, the majority of spodumene currently comes from
Australia and processed in China which has a high proportion of coal-based
power in its energy mix.
Lithium Market - Supply / Demand and Pricing Forecasts
The global lithium market is expanding rapidly due to an increase in the use
of lithium-ion batteries for electric vehicle and energy storage applications.
In recent years, the compound annual growth rate of lithium for battery
applications was over 22% and is projected by Roskill to be more than 20% per
year to 2028. This expansion is being driven by global policies to support
decarbonisation towards carbon neutrality via electrification, which is
underpinned by Carbon Emission Legislation (COP26, EU Green Recovery, Paris
Accord); Government regulation and subsidies; and Automakers commitment to
EVs.
Benchmark Minerals highlighted that there are 282 Gigafactories at various
stages of production/construction, up from only 3 in 2015 (by May 2022, this
number had gone over 300). If all these plants did come online in the
planned 10-year timeframe, it would equate to 5,777 GWh of battery capacity,
equivalent to 109 million EVs. But more relevantly it would require 5m
tonnes of Lithium each year, as compared with 480,000 tonnes produced in
2021. They noted that the lack of supply is not due to any geological
constraints but to a simple lack of capital investment to build future mines
and estimated $42bn needs to be spent by 2030 to meet demand for lithium.
In April 2022, the Belgium-based research university KU Leuven published a
report "Metals for Clean Energy" on behalf of Europe's metal industry group,
Eurometaux, and endorsed by the EU. This report explored in detail the
supply, demand and sustainability factors at play around critical raw
materials, especially in Europe. It noted that Europe's 2030 energy
transition goals would require 100-300kt of lithium rising to around 600-800kt
by 2050, equivalent to 3,500% of Europe's low consumption levels today. In
terms of direct European supply, Eurometaux comments that "Several projects
are subject to local community opposition (most visibly in Portugal, Spain,
and Serbia). Others are dependent on untested technologies to be viable or
have less certain economics. However, the EU has made it a strategic priority
to improve its self-sufficiency for lithium."
Lithium Supply is currently concentrated in four main countries, each of which
have strengths and weaknesses to their ability to materially ramp-up supply to
meet the expected demand.
· Chile - dominated by the incumbent suppliers, SQM and Albermarle.
Strengths are that they are the established industry experts in production of
lithium from brines. They have announced plans for expanded production, but
that is set against a backdrop of local water issues and also a potentially
punitive royalty regime at a governmental level on expanded production.
· Argentina - the newcomer in the production from brines with Livent
and Orocobre in production and a number of well-funded newcomers, such a
Lithium Americas, Neo, POSCO and Millennial. Argentina is expected to be the
next major source of battery grade lithium to the market. Its biggest
downsides are on a sustainability front around water usage and transport
distances to the end-users.
· Australia - the dominant producer of spodumene concentrate globally
with the largest producers being Pilbara, Mineral Resources/Ganfeng, Talison
JV. Australia has the advantages of a well-established mining industry and
significant scope to increase production. Its downsides are that it has
almost no processing facilities currently, so its emissions levels from
transport and conversion in China are high.
· China - has an existing in-country mining industry, but this is
dwarfed by its dominance in the production of end-product lithium based
primarily on Australian spodumene. Ganfeng and Tianqi are two of the world's
four biggest lithium companies and are expanding their investments globally.
The biggest issue is one of sustainability and that its energy intensive
processing of spodumene is largely from coal fired power station, thus
worsening the already high emissions levels from transport.
One of the wider issues around constriction of global supply is that of
resource nationalism and security of title. Bolivia has had a long-standing
nationalised industry that has resulted in its production being suppressed to
a fraction of its potential. Mexico has recently nationalised its nascent
lithium industry. In the wider mining industry, political and economic
instability in many jurisdictions has manifested itself in significant real
and perceived risks around security of ownership and continued ability to
operate resulting in limited production. These factors have contributed to
an increasing interest by western car makers to secure supply in domestic or
more "reliable" jurisdictions.
Price Forecasts
Definitive and accurate lithium pricing is inherently problematic, due to the
opaque nature of what is, in global mining terms, a relatively new and small
market by value. Lithium is not quoted on any major exchange, so there is no
readily available information. There is no terminal market, although the LME
is working to launch a futures contract. There is a spot market visible in
China, but this is a small part of the overall lithium market. As there is
no industry wide benchmark for pricing, the bulk of the market is sold based
on negotiation between buyer and seller on long term contracts with prices
fixed on an annual or quarterly revised basis. This is not wholly surprising
given that battery grade lithium is a speciality chemical that requires cycle
testing by manufacturers who value the consistency of quality of end product
and its impurities and guarantee on supply.
Furthermore, the largest current players in the market are companies that are
either not listed or ones that are not required by local listing rules to
detail their contract pricing achieved. This will likely change as the
industry matures and more listed companies become involved.
What is clear is that lithium prices have experienced exponential growth in
the last 18 months. SQM announced their Q1 2022 numbers that showed $38,000
per tonne for contract lithium hydroxide. Allkem has also increased its
Q2'22 guidance on contract pricing for lithium from $35k to $40k per tonne and
that China spot pricing is now around $70k per tonne.
There is also a growing consensus around the worsening Supply / Demand
imbalance, which is generally accepted economic pre-cursor to increased
prices. In terms of what that means for long term lithium hydroxide prices,
back in Q3 2021 Benchmark forecast a price of $12,110 long term, but this is
before the step change in balance in the market. In March 2022, Roskill
forecast an inflation adjusted long term price of $23,609 per tonne through to
2036 with a nominal rate of $33,200 by 2036.
Zinnwald Project Business Model
Strengths and Sustainability of the Project
The Zinnwald Lithium Project's business model is predicated around utilising
its inherent advantages to enable it to become one of the more sustainable
projects in the global lithium market:
· It is located close to the German chemical industry enabling it to
draw on a well trained and experienced workforce and attendant
infrastructure. Addresses the issue of "Lithium is a specialty Chemicals
industry rather than a conventional mining one."
· It is situated close to many of the planned Gigafactories, and it is
an integrated mining to battery grade product process. The transport
distances for emissions will be measured in the tens of kilometres rather than
tens of thousands.
· It will be an underground mine and is in an established mining
region. There is extensive existing and well-maintained infrastructure that
the Project may be able to use.
· It will be permitted under EU environmental rules, which are some of
the strictest globally. OEMs will be able rely on the production being done
in compliance with EU Battery Chain directives.
· Its basic process has key elements that are more sustainable than
some of its main rivals
· The process has limited water use relative, in particular, to brine
producers.
· The process flowsheet is less energy intensive than traditional
spodumene-based production as it involves a single pyrometallurgical step at a
lower temperature than is required in a spodumene-based process
· Overall transport costs and emissions are reduced by being an
integrated operation located close to end markets especially when compared to
Australian sourced spodumene concentrate processed in China
· German energy sources currently include a higher overall "low carbon"
component than China
· It has the potential to be a low or "zero-waste" project, as the vast
majority of both its mined product and co-products have their own large-scale
end-markets:
· Its initial mined waste product, quartz sand, is a "benign dry stack
end product" that itself is used as a construction aggregate for roads and
other projects.
· Its primary co-product is high grade Potassium Sulphate, which is in
huge demand as a fertiliser.
· Its secondary co-product is Precipitated Calcium Carbonate ("PCC")
typically used as a filler in the paper making process
Project's pricing assumptions
As part of the PEA process, the Company commissioned Grand View Research to
provide 25-year pricing forecasts for Lithium Hydroxide and Potassium
Sulphate, to underpin the pricing assumptions assumed in the financial
model. The results of these forecasts are shown in Figure 5 below.
Figure 5: LiOH and SOP - 25 Year Pricing forecasts
Primary Output - Lithium Hydroxide (LiOH)
The Company has used a base average price of US$22,500 per tonne of
battery-grade Lithium Hydroxide in the financial model used for this PEA.
This price is based on a conservative discount to the projections provided
Grand View Research. It is also at a discount to pricing forecast data
issued by peer companies in recent months (Keliber: $24,936, European Lithium:
$26,800, Bearing Lithium: $23,609).
Primary by-product - Potassium Sulphate
The primary by-product produced from the Hydromet stage is a high-grade
potassium sulfate (K(2)SO(4) or sulfate of potassium "SOP"). Based on an
annual production of c.12,000 tonnes of LiOH, the Project will produce
approximately 57,000 tonnes of SOP each year. The process can be adjusted to
produce a blend of Fertiliser Grade SOP (98.45% K2SO4) and Technical Grade SOP
(>99.6% K(2)SO(4)). The former is a high value fertilizer with particular
application for producers of fruits, vegetables and nuts. The latter is
supplied to the chemical industry. The bulk of global production is
predominantly in China and European production is heavily sourced from
Russia. Grand View has produced a forecast that shows combined demand for
these types of SOP rising in Europe alone from circa 410,000 tonnes in 2021 to
more than a million tonnes by 2045, so the Zinnwald Project's output of SOP
should be readily absorbed into this market without distorting pricing.
For the purposes of the financial model, a blended SOP price level of €875
per tonne has been assumed.
Secondary by-product - Precipitated Calcium Carbonate
PCC is used in 5 five main industrial areas, as a filler in high-performance
adhesives and sealants; as dietary calcium in medicines, food and cosmetics;
as an extender in paints to increase opacity and porosity; as a coating and
surface finishing agent in papers; and as filler/extender in Plastics, such as
improving impact strength in rigid PVC fillers. PCC is estimated to
represent approximately 20% of the European market for Calcium Carbonate
products, which itself is expected to grow at around 5.6% CAGR from 2022 to
2030 to a market size in of US$14.1 billion (circa US$3bn for PCC
alone). In terms of pricing, ongoing political turmoil from Russia's
invasion of Ukraine, has caused prices to rise to $297 per tonne in Europe in
Q1 2022, as compared with €150 per tonne in the same quarter of 2021. For
the purposes of the financial model, the Company has used US$150 per
tonne and expects to produce circa 16,300 tonnes of PCC per annum.
Other by-products - Construction Aggregates
Approximately 75% of the original ore mined is a coarse grade Quartz Sand,
which can either be stored as an inert landfill or potentially sold to
construction companies as an industrial aggregate. The current financial
model assumes a very limited revenue for this end product of 100,000 tonnes
per year at €5 per tonne. However, the goal is to find outlets to take
this in-demand industrial product either as a direct revenue stream or simply
to reduce the cost of storage.
Other by-products - Tin
The Zinnwald Lithium Project has historically not considered the option of
including a tin circuit as part of its production process, primarily because
the planned annual mining rate did not support the economics of a such a
concept. However, with the planned increase in size of the Zinnwald Project,
and the generally stronger tin price, the Company is reviewing both the cost
and the practicality of adding beneficiation of tin to the Project. The
Company may include further details in any future NI 43-101 Feasibility Study,
if the economics support such a plan.
Capital Cost Estimates
The overall capital cost estimate is summarized in Table 3. The capital cost
estimates were produced by ZLP, OEMs and external expert consultants.
· G.E.O.S.
· Epiroc for mining capital costs
· Metso:Outotec for beneficiation capital costs
· CEMTEC for pyrometallurgical capital costs
· K-UTEC for hydrometallurgical costs
It must be noted, that, at the time of writing this study, extraordinary
supply chain disruptions are having a general effect on the cost estimates.
The estimates presented below are made with the assumption that at the time of
construction, the underlying supply disruptions have been resolved and raw
material costs normalised. Capital costs below are all presented in US$ and a
USD / EUR exchange rate of 1.05 for costs based in €.
The capital cost estimates cover the design and construction of the mine and
the process plants, together with on-site and off-site infrastructure to
support the operation including water and power distribution and support
services. The capital costs associated with the gas supply pipeline and
power/steam stations are also included.
Table 3: Overview of the Project's Capital
Expense Estimate
Category Initial Capital (US$m)
Mining 54.0
Mineral Processing 73.1
Pyrometallurgy 49.4
Hydrometallurgy 115.7
Surface Land acquisition 1.6
Subsidies (15.8)
20% Contingency 58.5
Total Capex 336.5
(* The subsidies are based on present EU and German laws and are granted for
investments in the industrial sector of the former German Democratic
Republic.)
Operating Cost Estimates
The project operating cost is mainly determined by the cost of labour, power
(electrical and natural gas), consumables and reagents. For this estimate,
long term average prices as well as consensus forecasts for reagents and
energy were used. Fixed cost components have been drawn from current process
unit engineering plans, which include estimates of labour costs. All costs
have been attributed to the production of battery-grade lithium hydroxide. The
chemical circuits produce a by-product of potassium sulphate ("SOP"), which
can be sold as a potash fertiliser, and the financial model treats this as
co-product credit revenue with no associated direct costs. Table 4 summarizes
the average overall operating costs per tonne of LiOH produced over the
36-year life of mine plan of the financial model.
Table 4: Average Operating Costs per tonne of
LiOH
Category US$ per tonne LiOH
Mining 2,254
Mechanical Processing 898
Chemical Processing (Pyrometallurgical and Hydrometallurgical) 7,358
G&A 306
Total Operating Costs per tonne LiOH before by-product credits 10,816
Total Operating Costs per tonne LiOH after by-product credits 6,200
Total Cost per tonne mined 147.63
The operating cost estimate has been compiled by ZLP supported by G.E.O.S. /
K-UTEC and is based on the basic estimates received from:
- G.E.O.S. for mining operating costs
- Metso:Outotec for mechanical process operating
costs
- CEMTEC for pyrometallurgical operating costs
- K-UTEC for hydrometallurgical operating costs
Economic Analysis
As shown in Table 5, the PEA demonstrates the financial viability of the
Project at an initial minimum design production rate of approximately 12,011
t/a LiOH (battery grade 99.5 %). The Project is currently estimated to have
a payback period of 3.3 years. Cash flows are based on 100 % equity funding.
The economic analysis indicates a pre-tax NPV, discounted at 8 %, of
approximately US$ 1,605m and an Internal Rate of Return (IRR) of approximately
39%. Post-tax NPV is approximately US$1,012m and IRR 29.3%.
German federal income tax and depreciation were applied to the appropriate
capital assets and income categories to calculate taxable income. A basic
corporation tax rate of 30.9 % has been assumed together with a 100,000 EUR/a
Mining Royalty Tax due to the Government of Saxony. Across its lifetime, the
Project is estimated to generate c. €2.0bn in state and federal level taxes.
Table 5: Overview
Financial Analysis
PEA Key Indicators Unit Value
Pre-tax NPV (at 8 % discount) US$ m 1,605
Pre-tax IRR % 39.0%
Post-tax NPV (at 8 % discount) US$ m 1,012
Post-tax IRR % 29.3%
Simple Payback (years) Years 3.3
Initial Construction Capital Cost US$ m 336.5
Average LOM Unit Operating Costs (pre by-product credits) US$ per tonne LiOH 10,872
Average LOM Unit Operating Costs (post by-product credits) US$ per tonne LiOH 6,200
Average LOM Revenue US$ m 320.7
Average Annual EBITDA with by-products US$ m 192.0
Annual Average LiOH Production Tonnes per annum 12,011
LiOH Price assumed in model US$ per tonne $22,500
Annual Average SOP Production Tonnes per annum 56,887
Blended SOP Price assumed in model € per tonne 875
A sensitivity analysis has shown that the Project is more sensitive to the
lithium price than it is to either CAPEX or OPEX. An increase of 22% in the
average lithium hydroxide price, from 22,500 US$/t to 27,500 US$/t, increases
the post-tax NPV from US$1,012.3m to 1,444.6m (42%) and the post-tax IRR to
36.8%. A decrease of 22 % in the average lithium hydroxide price, from
22,500 US$/t to 17,500 US$/t, decreases the post-tax NPV (8 %) from
US$1,012.3m to 579.9m (-42%) and the post-tax IRR to 21.1%.
The financial analysis for this report considers only the project level
economics and excludes any cost of financing or any historic cost incurred in
the development of the project. The analysis assumes the Project is 100 %
equity financed. It includes the project phases comprising 24 months of
construction, followed by 12 months of commissioning, ramp-up and
stabilisation phases. A total mine life of 36 years is expected when assuming
the mining rate of 880,000t / a, and mineral inventory of 31.2Mt which is
equivalent to the Proven and Probable category tonnage of the latest Mining
Reserve statement, as announced on 31st May 2019. A mean grade of 3,004 ppm Li
was assumed, as per the historic Mining Reserve grade, which should account
conservatively for potential dilution from mining.
Project Development Plan
The tentative project schedule in this PEA report is developed on the
assumption that the Project will be fully funded throughout both its next
stage of producing a Bankable Feasibility Study ("BFS") phase and then into
construction; all environmental and other regulatory permits will be granted
without delays; external agencies and suppliers will be cooperative; and
management of the execution will be by competent EPCM / EPC groups. The
preliminary development schedule is shown in Figure 6 below.
DL is continuously in contact with the administrative bodies in Altenberg and
Zinnwald (mayor, municipal council) regarding ongoing project developments.
Furthermore, the Company continues to keep the residents of Zinnwald and
Altenberg updated about the Project via newspapers and regular information
meetings.
Execution Strategy
The execution strategy assumed in the PEA report is based on the hybrid model
mixing the conventional EPCM and Engineering Procurement Construction ("EPC")
approach. This type of hybrid model will allow for extensive participation of
the local contractors where possible. The preliminary schedule includes
typical durations for major activities based on experience with similar size
projects. A more detailed execution plan is to be developed during the BFS
phase of the project. Project permitting will cover the mining and
processing stages at the same time.
Project Development Plan and Timetable
The project development plan includes the following major phases
· PEA
· Geological and Processing development
· EIA and Permits
· Bankable Feasibility Study
· EPCM and EPC selection
· Construction and commissioning into Production
The schedule of project development shown in Figure 6, developed for the PEA
phase, is a graphical snapshot of the driving summary activities and logic.
The intent is to demonstrate major project execution activities and key
milestones following completion of this PEA. The schedule covers the entire
project life cycle from the start of the PEA study until commissioning and
nameplate production capacity is reached.
Figure 6: Project Development Plan
Sustainability Matters
As a mining development Group operating in Germany and the UK, the Company and
the wider ZLP Group (the Group") takes seriously its ethical responsibilities
to the communities and environment in which it works. Wherever possible, local
communities are engaged in the geological operations and support functions
required for field operations, providing much needed employment and wider
economic benefits to the local communities. In addition, the Company and Group
follows international best practice on environmental aspects of its work. The
Company's goal is to meet or exceed the required standards, in order to ensure
the Company obtains and maintains its social licence to operate from the
communities with which it interacts.
The Group has already put in place a Sustainability Committee in place at Plc
Board level to incorporate and emphasise the Group's commitment to
Sustainability and ESG Matters. The Group's Sustainability framework. is based
on the United Nations' set of 17 Sustainable Development Goals. The
Company recognises the need to proactively consult and engage with the
communities that may be affected by our activities. The Company aims to
foster long-term relationships with these communities to develop mutual
understanding, cooperation, and respect. As part of this process, the
Company will put in place a local Sustainability Committee as part of the
Group's wider structures.
Conclusions and Recommendations
The results of this study confirm the development of an underground mine with
an extraction rate of 880,000 t/a and a mine life of more than 30 years,
including the ramp-up phase, followed by mechanical processing (crusher and
magnetic concentrator) at the mine site for the separation of 179,200 t/a of a
Zinnwaldite concentrate and the construction of a plant for the production
nominally 12,000 t/a of lithium hydroxide monohydrate (LHM) (corresponding to
10,565 t/a of LCE). The project includes the production of 56,887 t/a
potassium sulfate as fertilizer and technical product, 16,320 t/a PCC
(precipitated calcium carbonate) and annual sales of 75,000 t of granite and
100,000 t quartz sand as by-products.
The Project is of substantial size with the potential to produce 496,000 t of
LHM over 36 years. It has a robust average grade compared to the cut-off
grade, promising an operation at a significant profit margin.
The Company has already commenced an infill drilling programme at the core
Zinnwald license with the objective of better defining the Resources and
Reserves that lie within the ore body, as well as determine the detailed early
years' mining plan. This will likely lead to revised Resource and Reserves
Estimate to be included in the new BFS planned for the re-scoped Project as
defined in this PEA Study. The Company has also commenced an exploration
drilling campaign at its nearby Falkenhain license to determine the potential
for expansion of both the project's resources and the production level.
The Company will continue to develop the technologies planned for its
processes. Individual processing methods and stages are well established in
mining and other industries. As the recognition of Zinnwaldite as a source for
battery metals is more recent, the application of methods such as
high-intensity magnetic separation has not previously been used in
beneficiation of this specific type of lithium ore but is utilised and well
established in the beneficiation of other ore types. Evaporators and
crystallizers are common processing methods in the production of fertiliser
salts. The Company has also completed the initial phases of bulk and particle
sorting techniques designed to increase the type of resource available to the
Project. The Company will also continue to refine its plans for reducing its
overall CO2 footprint and operating costs, such as via the use of electric
mining equipment.
The Company has already commenced its EIA and other permit application
process, including baseline studies and other reports. This will be the
highest priority area over the coming quarters.
This PEA assumes that the Group will adopt an EPCM construction strategy, but
in the BFS phase other options should also be evaluated. The EPCM contractor
will provide overall management for the Project as Zinnwald will likely look
to limit the size of its Owner's team. The EPCM Contractor will need to work
in collaboration with the Company, its consultants and the relevant regulatory
bodies.
Forward Work Program
Geology
The Company is currently executing an In-fill drilling campaign to further
improve the mineral resources. In connection with the campaign, it is
recommended to:
· Further investigate geo-metallurgical properties of the Ore type 2 to
possibly increase the Resources.
· Collect all geotechnical and structural data from the core to better
understand small scale features of the deposit and provide information for
detailed mine planning.
The Company is also undertaking an exploration drill campaign at its
Falkenhain license area in order to test historic drill results. The intention
to establish a lithium resource with potential for tin and tungsten. If
successful, this could ultimately provide additional high grade feed for the
Project.
Mining
To optimize the full project and to prepare the bankable feasibility study and
to minimize further risks, additional recommendations include:
· To ensure access to underground mine galleries in Altenberg.
Negotiation with current owner, LMBV, are on-going.
· The ventilation must be optimized and validated by modelling
· Further optimising the logistical system of the mine, both regarding
export of ore and return of material for back-filling.
· A more detailed concept for backfilling by means of pumps must be
developed in the next project steps.
Processing
The next phase testwork for optimization should focus on the following
aspects:
· To further explore the application of ore sorting technology with the
goal of
· Reduction of material for comminution (size reduction) and thus cost
/ energy reduction.
· Improve overall process efficiency through the reduction of fines
generated in comminution.
· Facilitate geo-metallurgical control over the ROM-feed material to
the mineral processing plant.
· Test work to check whether a tunnel kiln will be better in process
stability and cheaper than a rotary kiln
· Evaluation of in-house grinding of limestone chunks to flour with the
aim to reduce cost for additives
· Study to further improve SOP and PCC production planning, as
economically significant by-products and integrate with the existing extended
process design.
· Further test option for in-house production of potassium carbonate
(K2CO3) from other potassium compounds to reduce costs and supply risks for
this reagent.
· Explore the opportunity to additionally reduce the carbon footprint
of the process.
· Carry out further testwork for alternative usages of Quartz Sand
· Carry out further testwork for alternative usages of LRP Improve the
energy efficiency of processes including heat-recovery, heat recirculation or
reduction of overall heat / energy demand within the process stages.
· Progress REACH / CLP registration with the European Chemicals Agency
(ECHA) for required reagents as well as products.
Infrastructure
Further work on infrastructure related items is recommended in the following
areas:
· To progress negotiations to access the IAA Bielatal tailings facility
with the state company LMBV
· To carry out Geotechnical studies on the IAA Bielatal tailings
facility with regard to risk assessment
· Alternative options for placement of dry stack tailings material
should be investigated.
· Advance the negotiations for land usage / purchase required for
surface installations.
· Advance negotiations for service contracts for electric power and
natural gas with local power companies as well as supply contracts for
required reagents and materials
Environment, Social and Governance
Environmental considerations of the Project are a critical aspect that are a
key issue to be advanced. The following aspects should be advanced / improved
in the further development of the Project:
· Carry out required environmental baseline surveys for the areas under
consideration.
· Complete a comprehensive Environmental and Social Impact Assessment
study that will quantify the expected impact of the project, with special
regard to:
o Local environment, flora, and fauna
o Local residents and stakeholders
o Possible effect on local economy and businesses
o Opportunities for additional benefit to local stakeholders by
§ Improved employment opportunities
§ Retention of younger residents and families in an area of overall ageing
population
§ Improved local infrastructure for residents and businesses
To continue and intensify efforts of public participation and local
stakeholder engagement. These must be carried out with the goal of better
local understanding of the project and its potential benefits and risks.
Qualified Persons
Kersten Kühn (EurGeol), Head of the Resources Department and Senior Geologist
for G.E.O.S. Ingenieurgesellschaft GmbH, Schwarze Kiefern 2, 09633
Halsbrücke, Germany, and Dr Bernd Schultheis (FIMMM), Deputy Head of
Department, Chemical / Physical Process Engineering of K-UTEC AG Salt
Technologies, each being a Qualified Person as defined in the AIM Rules for
Companies and Canadian National Instrument 43-101, have reviewed the
information in this announcement.
*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
Liz Kirchner (Nominated Adviser)
Michael Seabrook Oberon Capital Ltd +44 (0) 20 3179 5300
(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.
Appendix 1 - List of Definitions, Symbols, Units and Technical Terms
List of Definitions
Title Explanation
A / B Resource class according to the resource classification of the former G.D.R,
comparable approximately with the category "Measured"
Bulk density In situ density of material
Cut-off grade The lowest grade or quality of mineralized material that qualifies as
economically mineable and available in a given deposit. May be de- fined on
the basis of economic evaluation or on physical or chemical attributes that
define an acceptable product specification.
C1 Resource class according to the resource classification of the former G.D.R,
comparable approximately with the category "Indicated"
C2 Resource class according to the resource classification of the former G.D.R,
comparable approximately with the category "Inferred"
Density The mass or quantity of a given substance per unit of volume of that
substance, usually expressed in kilograms or tonnes per cubic metre.
Dip The maximum angle at which a planar geological feature is inclined from the
horizontal.
Grade Any physical or chemical measurement of the characteristics of the material of
interest in samples or product.
Indicated Mineral Resource That part of a Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a reasonable
level of confidence. It is based on exploration, sampling and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes. The locations are too
widely or inappropriately spaced to confirm geological and/or grade continuity
but are spaced closely enough for continuity to be assumed.
Inferred Mineral Resource That part of a Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a low level
of confidence. It is inferred from geological evidence and assumed but not
verified geological and/or grade continuity. It is based on information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that may be limited or of uncertain
quality and reliability.
Measured Mineral Resource That part of a Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a high level
of confidence. It is based on detailed and reliable exploration, sampling and
testing information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes. The locations are
spaced closely enough to confirm geological and grade continuity.
Mineralization Any single mineral or combination of minerals occurring in a mass or deposit
of economic interest. The term is intended to cover all forms in which
mineralisation might occur, whether by class of deposit, mode of occurrence,
genesis or composition.
Mineral Resource A concentration or occurrence of material of economic interest in or on the
Earth's crust in such form, quality and quantity that there are rea- sonable
prospects for eventual economic extraction. The location, quantity, grade,
continuity and other geological characteristics of a Mineral Resource are
known, estimated or interpreted from specific geological evidence and
knowledge. Mineral Resources are subdivided, in order of increasing geological
confidence, into "Inferred", "Indicated" and "Measured" categories.
Mineral Reserve The economically mineable part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and allowances for losses, which may
occur when the material is mined. Appropriate assessments, which may include
feasibility studies, have been carried out and include consideration of and
modification by realistically assumed mining, metallurgical, economic,
marketing, legal, environmental, social and governmental factors. These
assessments demonstrate at the time of reporting that extraction could
reasonably be justified. Mineral Re- serves are sub-divided in order of
increasing confidence into "Probable" Mineral Reserves and "Proved" Mineral
Reserves.
NI 43-101 National Standard of Disclosure for Mineral Projects, enforced by the Canadian
Securities Administrators (CSA)
PERC Code The Pan European Reserves and Resources Reporting Committee (PERC) Code for
reporting of exploration results, mineral resources and mineral reserves sets
out minimum standards, recommendations and guidelines for public reporting of
exploration results, mineral resources and mineral reserves in the United
Kingdom, Ireland and Europe.
Pre-production period A period of mine commissioning, construction of mechanical and chemical
processing plant.
Recovery The percentage of material of initial interest that is extracted during mining
and/or processing. A measure of mining or processing efficiency.
List of element symbols and element oxide conversion factors
Symbol Element Oxide formula Oxide Multiply factor (element to oxide)
Al Aluminium Al2O3 Aluminium oxide 1.8895
Ba Barium BaO Barium oxide 1.117
Ca Calcium CaO Calcium oxide 1.399
Cs Caesium Cs2O Caesium oxide 1.06
Fe Iron FeO Iron (II) oxide 1.2865
Fe Iron Fe2O3 Iron (III) oxide 1.4297
K Potassium K2O Potassium oxide 1.2046
Mg Magnesium MgO Magnesium oxide 1.6581
Mn Manganese MnO Manganese oxide 1.2912
Na Sodium Na2O Sodium oxide 1.348
P Phosphorus P2O5 Phosphorus oxide 2.2914
Rb Rubidium Rb2O Rubidium oxide 1.094
Si Silicon SiO2 Silicon oxide 2.1393
Sn Tin SnO2 Tin oxide 1.2696
Sr Strontium SrO Strontium oxide 1.185
Ti Titanium TiO2 Titanium oxide 1.6681
W Tungsten WO3 Tungsten oxide 1.2611
List of Lithium Salts and Lithium salt conversion factors
Name Formula Mass g/mol Proportion Li % Conversion factor
Lithium element/metal Li 6.941 100.00 1.000
Lithium oxide Li2O 29.880 46.46 2.152
Lithium carbonate Li2CO3 73.887 18.79 5.323
Lithium fluoride LiF 25.940 26.76 3.737
Lithium hydroxide LiOH 23.946 28.99 3.450
Lithium hydroxide monohydrate LiOH.H2O 41.960 16.54 6.045
Lithium chloride LiCl 42.392 16.37 6.107
Lithium nitrate LiNO3 68.944 10.07 9.933
Lithium sulphate Li2SO4 109.940 12.63 7.920
Lithium sulfate monohydrate Li2SO4.H2O 127.995 10.85 9.220
Lithium phosphate Li3PO4 115.790 17.98 5.561
Appendix 2 - List of Abbreviations
Abbreviation Explanation
AAS Atomic absorption spectrometry
Actlabs Activation Laboratories Ltd., Ancaster, Ottawa (Canada)
ALS ALS Global / ALS Romania SRL, Rosia Montana (Romania)
a.s.l. Elevation above sea level
ATVC Altenberg-Teplice volcanic complex (also Altenberg-Teplice caldera)
BBergG Bundesberggesetz (German Mining Act)
BC Kataclastic breccia (lithology in model)
BBF Baubüro Freiberg GmbH
BE Basic engineering
BFS Bankable Feasibility Study
BOO Build, own, operate
BSE Back scattered electron
CAD Computer-aided design
CAGR Capex Growing
CHS Channel sample
CAPEX Capital expenditure
CEF Balance measures
CEO Chief Executive Officer
CFO Chief Financial Officer
CHS Channel sample
CIF Cost, Insurance & Freight
CIM Canadian Institute of Mining
COO Chief Operation Officer
C.P. Competent Person (according to PERC Standard)
CSO Chief Sales Officer
CTO Chief Technical Officer
CZ Czech Republic
DDH Diamond drillhole
DGEG Deutsche Gesellschaft für Erd und Grundbau (German Society of Earthworks and
Foundation Engineering)
DH Drill hole
DIN Deutsches Institut für Normung (German Institute of Standardization)
DIN 18136 German Standard No. 18136 for soil investigation and testing - unconfined
compression test
DIN 52105 German Standard No. 52105 for testing compressive strength of natural stone
DL Deutsche Lithium GmbH
D&M Distribution and Marketing
E East
EDX Energy-dispersive X-ray spectroscopy
EEG Renewable Energy Sources Act
EFG European Federation of Geologists
EIA Environmental impact assessment
EPCM Engineering, Procurement, Construction and Management
EU European Union
EUR Euro
EurGeol European Geologist (Professional who has had his training and experience peer
reviewed and who practises in accordance with the EFC code of ethics. Listened
in the register of European Geologists in the section EurGeol title available
at www.eurogeologists.eu (http://www.eurogeologists.eu/) ).
EV Electric vehicle
EXW Ex Works (name placed of delivery)
FEED Front-end engineering design
FEL Front-end loader
FFOP Facultative frame operation plan
FGD Flue gas desulfurization
FIBC Flexible intermediate bulk container
fl Fluorite
FM Finance model
FMC FMC Corporation
FP Flame photometry
FS Feasibility study
GA Dyke rock (lithology in model)
GDO Large rotary kiln
G.D.R. German Democratic Republic
G.E.O.S. G.E.O.S. Ingenieurgesellschaft mbH
GFE F VEB Geologische Forschung und Erkundung Freiberg (former G.D.R. com- pany for
geological research and exploration)
GL Gallery
Gy L VEB Geophysik Leipzig (former G.D.R. company)
HEV Hybrid electric vehicles
HIMS High intensity magnetic separation
HPGR High pressure grinding roll
HQ Diamond core drilling with core diameter 63.4 mm
HR Human resources
IAA Industrial setting plant
ICP-AES Inductively coupled plasma - atomic emission spectrometry
ICP-MS Inductively coupled plasma - mass spectrometry
ICP-OES Inductively coupled plasma - optical emission spectrometry
IRR Internal rate of return
IS1 Internal standard 1 (high grade standard)
IS2 Internal standard 2 (low grade standard)
ISE Ion-selective electrode
ISO International Standards Organization
ISO 9001 International Standard 9001 for quality of management systems
ISO 17025 International Standard17025 for general requirements for the competence of
testing and calibration laboratories
IT Information technology
KDO Small rotary kiln
KV Loss of drill core
LCE Lithium carbonate equivalent
LFA Lignite filter ash
LfULG Federal State Office for Agriculture, Environment and Geology of Saxony
LHD Load - Haul - Dump Technology
LMBV Lausitzer und Mitteldeutsche Bergbau-Verwaltungsgesellschaft mbH
Li-OG63 Analysis of lithium by 4-acid digestion and ICP-AES (ALS Romania SRL, range
0.005 - 10 %)
LOI Loss of ignition
LOMP Life of mine plan
ME-4ACD81 Analysis of base metals by 4-acid digestion and ICP-AES (ALS Romania SRL)
ME-MS81 Analysis of 38 elements by lithium borate fusion (FUS-LI01) and ICP-MS (ALS
Romania)
ME-XRF05 Analysis of single elements by pressed pellet XRF (ALS Romania)
MLA Mineral Labaration Analyzer
msc Muscovite
my Mylonite (lithology in model)
N North
n.a. Not analyzed
NCA Nickel cobalt aluminium battery
NE Northeast
NI 43-101 National Instrument 43 - 101 Standard of Disclosure for Mineral Projects
NMC Nickel cobalt aluminium battery
NNE Northnortheast
NNW Northnorthwest
NPV Net present value
NQ Diamond core drilling with a core diameter of 47.6 mm
NW Northwest
OIC Older intrusive complex
OK Percussion drilling
OPEX Operational expenditure
PDC Process design criteria
PDF Portable document format
PERC (Standard) Compliance and Guidance Standards Proposed by Pan-European Reserves &
Resources Reporting Committee ("The PERC Reporting Standard")
PFS Prefeasibility study
PG Albite granite (lithology in model)
PG_GGM_1 Weakly greisenized albite granite (lithology in model)
PG_GGM_2 Medium greisenized albite granite (lithology in model)
PG_GGM_3 Strongly greisenized albite granite (lithology in model)
PG_PR Porphyritic albite granite (lithology in model)
PG_PR_GGM_1 Weakly greisenized porphyritic albite granite (lithology in model)
PG_PR_GGM_2 Medium greisenized porphyritic albite granite (lithology in model)
PG_PR_GGM_3 Strongly greisenized porphyritic albite granite (lithology in model)
PG_UK Stockscheider (lithology in model)
PL Poland
PLS Pregnant leach solution
PPG Porphyritic protolithionite granite
PPM Porphyritic protolithionite microgranite
PQ Diamond core drilling with a core diameter of [.0 mm
PZM Porphyritic zinnwaldite-microgranite
Q Quaternary (lithology in model)
QA/QC Quality assurance / Quality control
Q.P. Q.P. Qualified Person (according to NI 43-101)
Q1, Q2, Q3, Q4 Year quarter1 to 4
qtz Quartz
RBS Rock bulk sample
RC Resource category
RC DH Reverse circulation drill hole
RCS Rock chip sample
REACH Registration, Evaluation, Authorization and restriction of chemicals
ROM Run-of-mine ore
RQD Rock quality designation index
R2 Linear coefficient of correlation
R&D Research and development
S South
SA Spectral analyses
SOBA Sächsisches Oberbergamt (Mining Authority of Saxony)
SD Standard deviation
SE Southeast
SEM Scanning electron microscope
SGK Staatliche Geologische Kommission (State Geological Commission of the former
G.D.R.
SOP Sulphate of potash (K2SO4)
SQM Sociedad Química y Minera
SSE Southsoutheast
SSW Southsouthwest
StVK Staatliche Vorratskommission (State Resource Committee of the former G.D.R)
SW Southwest
SWS SolarWorld Solicium GmbH
SY Syenite (lithology in model)
TBS Tiefer-Bünau-Stollen gallery
TF Feldspatite or metasomatized feldspathic rock (lithology in model)
TGGM Mica greisen (lithology in model)
TGQ Quartz greisen (lithology in model)
TGQ+GM Quartz mica greisen (lithology in model)
THG Tiefe-Hilfe-Gottes Stollen gallery
TINCO TINCO Exploration Ltd.
to Topaz
TR Teplice Rhyolite
TU BAF Technical University Mining Academy Freiberg
UG Microgranite (lithology in model)
UG_GGM_1 Weakly greisenized microgranite (lithology in model)
UG_GGM_2 Medium greisenized microgranite (lithology in model)
UG_GGM_3 Strongly greisenized microgranite (lithology in model)
UG_GQ_3 Microgranite with strong quartz greisenization (lithology in model)
UK United Kingdom
UNESCO United Nations Educational, Scientific and Cultural Organization
US US Dollar
UVR-FIA UVR-FIA GmbH
VA Measures for special protection
VBGU Union for Mining, Geology and Environment
VEB Public owned enterprise of the former G.D.R.
W West
WRRL Water Framework Directive
XE Xenolith (lithology in model)
XRD X-ray diffraction analysis
XRF X-ray fluorescence analysis
YI Rhyolite (lithology in model)
YI_GGM_1 Weakly greisenized Teplice rhyolite (lithology in model)
YI_GGM_2 Medium greisenized Teplice rhyolite (lithology in model)
YI_GGM_3 strong greisenized Teplice rhyolite (lithology in model)
YI_GQ Teplice rhyolite with quartz greisenization (lithology in model)
YIC Younger intrusive complex
ZAG Zinnwald Albite Granite
ZG Zinnwald Granite
ZGI Zentrales Geologisches Institut (Central Geological Institute of the former
G.D.R.
ZW Zinnwaldite
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