European Metals Holdings Ltd (LON:EMH) has today announced an interim upgrade of its Mineral Resources at the Cinovec lithium/tin project in the Czech Republic. The upgrade has delivered a 420% increase in Indicated Mineral Resources, which, when combined with the Inferred Mineral Resources, results in a total resource of an estimated 6.46Mt of LCE.
The significant increase in the indicated portion of the Mineral Resource, and the resource in total, will have a positive impact for mine planning and the life of mine. In particular, the Mineral Resource will allow management to optimise the mine plan and maximise Cinovec’s financial returns and further progress in the ongoing pre-feasibility study, which is due for publication at the end of March next year.
The lithium (“Li”) and tin (“Sn”) resources have been updated using data from the latest drill holes released to market over the last 5 months. Resource classifications have been revised on the basis of the new data.
· Lithium Indicated Resource increased 420% to 2.6 Mt LCE, contained in 232.8 Mt @ 0.45% Li2O (0.1% Li cutoff)
· Lithium Total Resource increased 11.8% to 6.46 Mt LCE, contained in 606.8 Mt @ 0.43% Li2O (0.1% Li cutoff)
· Tin Indicated Resource increased by 64% to 28.6 Mt @ 0.23% Sn, 0.54% Li2O (0.1% Sn cutoff) for 65.8 kt Sn, 0.38 Mt LCE
· Results from the drilling programme support the original Cinovec model. Management are confident that additional drilling will result in further significant resource upgrades.
· Lithium Exploration Target remains 350 to 450 Mt @ 0.39% to 0.47% for 3.4 Mt to 5.3 Mt of LCE.
European Metals Holdings Ltd Managing Director Keith Coughlan said, “This significant upgrade to the Cinovec Indicated lithium resource is particularly pleasing as it provides basis for the soon to be completed preliminary feasibility study. When the tonnage and grade for this material are compared to the previously calculated Inferred resource, neither grade nor tonnage changed much, highlighting the robustness of the resource and geological models, and continuity of the orebody. Drilling will continue until the end of the year at which point the model will be updated again.
The substantial upgrade to the Indicated tin resource is also very encouraging, particularly in light of the rising tin price on LME throughout 2016. The tin credits at Cinovec will be significant for the project and greatly enhance the overall economics.
The pre-feasibility study is moving ahead rapidly and I look forward to releasing some exciting updates on this in the very near future.”
Resource consultant Lynn Widenbar noted, “The completion of 18 additional diamond drill holes between 2014 and 2016, in combination with historic geological data, has seen the generation of a new geological model of the greisen and granite distribution. This has been used to control a new, geostatistically based resource estimation. As a result, there has been an increase in confidence in the classification of the Mineral Resource in much of the central and south western parts of the Cinovec South Deposit. Approximately 40% of the Lithium Resource is now classified as Indicated, compared to 10% in the May 2016 Resource Model. The proportion of Indicated for the Tin Resource has increased from 20% to approximately 45%.”
The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Mineral Resource Upgrade
Independent expert Lynn Widenbar of Widenbar and Associates updated the Mineral Resource Estimates. Mr Widenbar has compiled all resource estimates at Cinovec to-date.
Total Indicated and Inferred lithium resources (see Table 1) at 0.1% Li cut-off are now:
· 606.8 Mt @ 0.43% Li2O for 6.46 Mt LCE
Total Indicated and Inferred tin resources (see Table 1) at 0.1% Sn cut-off are now:
· 70.5 Mt @ 0.20% Sn, 0.53% Li2O for 141 kt Sn, 0.87 Mt LCE
|Table 1: Cinovec Project Mineral Resource Estimate November 2016|
|Cinovec Lithium Mineral Resource|
|Cut-off||Tonnes (Mt)||Li %||Li2O%||LCE||Sn %||Sn t|
|Cinovec Tin Mineral Resource|
|Cut-off||Tonnes (Mt)||Sn %||Sn t||Li %||Li2O%||LCE|
1. Mineral Resources are not reserves until they have demonstrated economic viability based on a feasibility study or pre-feasibility study.
2. Mineral Resources are reported inclusive of any reserves and are prepared by Widenbar in accordance with the guidelines of the JORC Code (2012).
3. The effective date of the Mineral Resource is November 2016.
4. All figures are rounded to reflect the relative accuracy of the estimate.
5. The operator of the project is Geomet s.r.o., a wholly-owned subsidiary of EMH. Gross and Net Attributable resources are the same.
6. Any apparent inconsistencies are due to rounding errors.
7. LCE is Lithium Carbonate Equivalent and is equivalent to Li2CO3.
The Cinovec database used for the Mineral Resource Estimate incorporates information derived from almost 800 historic underground and surface diamond drill holes, historic underground channel sampling as well as the 18 surface diamond holes drilled to date by European Metals. A total of 71,312 assay intervals are now included in the database. Figure 1 is a map showing the location of holes drilled by European Metals relative to historic drill holes and underground workings.
(Please refer to the announcement on the European Metals Website for the graphic Figure 1 – Plan view of Cinovec Project drill hole locations, historic underground workings, Li Indicated and Inferred Resource – www.europeanmet.com.)
Historically, core samples were either split or consumed entirely, with intervals ranging from 0.03 to 10.5m; more than 99.75% of historic drill samples fall in a range between 0.1 and 3m long. Historic channel samples were collected across 1m intervals. Samples collected from 2014, 2015 and 2016 holes drilled by European Metals comprised half core and honoured geological contacts and mineralised domains, ranging from 0.5 to 2.1m long.
Historic analytical methods included XRF and wet chemical techniques; samples collected from the new holes were analysed by fusion or 4 acid digest with ICP finish. Assay data were composited to 1m intervals prior to Mineral Resource estimation.
Sample spacing used in Mineral Resource estimation for tin ranges from continuous channel sampling up to approximately 100m. The range reflects the density of historical work – samples are very closely spaced in areas of underground development and trial mining, less so in areas sampled only by surface or underground drill holes.
Sample spacing used for lithium Mineral Resource estimation is wider, as development samples were not assayed for lithium; sample spacing typically ranges from 50m to 200m. Note that only blocks in the lithium model which had an average distance to samples used of less than 90m were assigned to the Mineral Resource, with the remainder considered to form part of an Exploration Target.
At a 0.1% Li cutoff, the Exploration Target is:
· 350 to 450 Mt @ 0.39 to 0.47% Li2O for 3.4 to 5.3 Mt LCE
The Sn-W-Li mineralisation is hosted in an alkalic granite dome of late Variscan age. Tin and tungsten occur mainly in oxide minerals (cassiterite and wolframite). Lithium occurs mainly in zinnwaldite, a Li-rich muscovite. Quartz veining and greisenisation is associated with the mineralisation.
A geological domain model was constructed using Leapfrog software with solid wireframes representing greisen, granite, greisenised granite and the overlying barren rhyolite. This was used to both control interpolation and to assign density to the model.
Analysis of sample lengths indicated that compositing to 1m was necessary. Search ellipse sizes and orientations for the estimation were based on drill hole spacing, the known orientations of mineralisation and variography. An “unfolding” search strategy was used which allowed the search ellipse orientation to vary with the locally changing dip and strike.
After statistical analysis, a top cut of 5% was applied to Sn% and W%; no top cut is applied to Li%. Sn%, W% and Li% were then estimated by Ordinary Kriging within the geological solids.
The primary search ellipse was 150m along strike, 150m down dip and 7.5m across the mineralisation. A minimum of 4 composites and a maximum of 8 composites were required. A second interpolation with search ellipse of 300m x 300m x 12.5m was carried out to inform blocks to be used as the basis for an exploration target. Block size was 5m (E-W) by 10m (N-S) by 5m
Validation of the final resource has been carried out in a number of ways including section comparison of data versus model, swathe plots and production reconciliation.
Densities applied for Mineral Resource tonnage calculations are based on historical bulk density measurements of 2.57 for granite and 2.70 for greisen, confirmed by laboratory measurements in 2016.
The impact of the new European Metals drill holes on the geological model and the block model have been reviewed. Globally the geology and resource model are similar to the previous (May 2016) model, with only relatively minor local changes to grade distributions. The increase in confidence resulting from the new drill data has allowed additional areas of the block model to be upgraded in classification from Inferred to Indicated.
BACKGROUND INFORMATION ON CINOVEC
Cinovec Lithium/Tin Project
European Metals owns 100% of the Cinovec lithium-tin deposit in the Czech Republic. Cinovec is an historic mine incorporating a significant undeveloped lithium-tin resource with by-product potential including tungsten, rubidium, scandium, niobium and tantalum and potash. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 49.1Mt @ 0.43% Li2O and an Inferred Mineral Resource of 482Mt @ 0.43% Li2O containing a combined 5.7 million tonnes Lithium Carbonate Equivalent.
This makes Cinovec the largest lithium deposit in Europe and the fourth largest non-brine deposit in the world.
Within this resource lies one of the largest undeveloped tin deposits in the world, with total Indicated Mineral Resource of 15.7Mt @ 0.26% Sn and an Inferred Mineral Resources of 59.7 Mt grading 0.21% Sn for a combined total of 178kt of contained tin. The Mineral Resource Estimates have been previously released on 18 May 2016. The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining operation.
A Scoping Study conducted by specialist independent consultants indicates the deposit could be amenable to bulk underground mining. Metallurgical test work has produced both battery grade lithium carbonate and high-grade tin concentrate at excellent recoveries with the Scoping Study. Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed road adjacent to the deposit, rail lines located 5 km north and 8 km south of the deposit and an active 22 kV transmission line running to the historic mine. As the deposit lies in an active mining region, it has strong community support.