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Scoping Study Results and Revised Mineral Resource Estimate for the Toral Project, Spain
Europa Metals Ltd
(Formerly Ferrum Crescent Limited)
(Incorporated and registered in Australia
and registered as an external company in
the Republic of South Africa)
(Registration number 4459850)
(External company registration number 2011/116305/10)
Share code on the ASX: EUZ
Share code on AIM: EUZ
Share code on the JSE: EUZ
ISIN: AU0000014342
("the Company")
Scoping Study Results and Revised Mineral Resource Estimate for the Toral Project, Spain
Cautionary Statement
The scoping study referred to in this announcement (the “Scoping Study” or the “Study”) has been undertaken by Addison
Mining Services Limited (“AMS”) to review initial build and operating cost estimates for the Company’s wholly owned
Toral lead, zinc and silver project in Spain (the “Toral Project” or “Toral”) in order to determine whether further
development of the project is warranted.
The Scoping Study is a preliminary technical and economic study of the potential viability of the Toral Project. It is
based on low level technical and economic assessments that are not sufficient to support the estimation of ore
reserves. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no
certainty that further exploration work will result in the determination of Measured or Indicated Mineral Resources.
For this reason, in accordance with Section 8.5, ASX Guidance Note 31, Europa Metals cannot disclose production
targets, forecast financial information or income-based valuations related to the Scoping Study, but instead discloses
appropriate information of a technical nature to ensure that the market is properly informed of the Company's
prospects. Accordingly, the Company hereby makes certain aspirational statements, announces exploration targets
and discloses parts of the Study that do not contain production targets
The estimated Mineral Resources used for the Study are updated versions of those reported in the Company’s
announcement of 20 September 2018, updated with an effective date of 29 October 2018 and an issue date of 3
December 2018, and announced herein. The Scoping Study was based on Inferred Resources. Confidence in the estimate
of Inferred Mineral Resources is not sufficient to allow the results of the application of technical and economic
parameters to be used for detailed planning in pre-feasibility or feasibility studies. For this reason, there is no direct link
from an Inferred Mineral Resource to any category of Ore Reserves.
The Scoping Study was based on the material assumptions outlined below. These include assumptions about the
availability of funding. Whilst Europa Metals considers all of the material assumptions to be based on reasonable
grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping
Study will be achieved. To achieve the range of outcomes indicated in the Scoping Study, funding in the order of AU$9
million (£5 million) will likely be required. Investors should note that there is no certainty that Europa Metals will be able
to raise that amount of funding when needed to progress development. It is also possible that such funding may only be
available on terms that may be dilutive to or otherwise affect the value of Europa Metals’ existing ordinary shares. It is
also possible that Europa Metals could pursue other ‘value realisation’ strategies such as a sale, partial sale or joint
venture of the Toral Project. If it does, this could materially reduce Europa Metals’ proportionate ownership of the
project.
Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the
Scoping Study.
Announcement
Scoping Study Highlights:
- Positive Scoping Study completed for Europa Metals’ Toral lead, zinc and silver project
- Three conceptual underground mining development and production scenarios considered
throughout the Study
- The conceptual scenario selected progresses decline access ramp with a high grade focus
- Mechanised Cut and Fill (MCAF) mining method proposed
- Entry to mine via a principal decline reaching various levels
- Series of internal mining inclined ramps constructed to access levels
- A ventilation raise would be drilled (raise-bored) to provide both adequate ambient
conditions underground and a second, emergency means of access/egress into the
mine
- Ore transported to a flotation process plant by conveyor or haul truck from the mine
and crushed to a suitable product for milling
- Milled ore floated by standard flotation technology to provide two products: lead and
zinc concentrate. Silver will probably report to the lead concentrate for sale as a
combined product
- 4x4 metre mine standard development size
- 4% Zn Eq cut-off used with potential for mine life extension
- Key Recommendations: Infill drilling campaign to convert resources to the Indicated
category (JORC 2012), metallurgical and geotechnical test work and progression to a full
feasibility study
Europa Metals, the European lead-zinc explorer, is pleased to announce the results of an
independent Scoping Study completed in accordance with JORC 2012 for its wholly owned Toral
Project located in the Castilla y León region, Northwest Spain. The findings of the Study are positive
with a recommendation that the Toral Project should be progressed towards a feasibility study to
determine full economics, technical and environmental parameters for an underground mining
operation focussed on near-term recovery of the higher-grade mineralised zones.
Further to discussions with the ASX and in accordance with Section 8.5 of ASX Guidance Note 31,
the Company will not make public any economic forecasts from the Scoping Study until further work
has been undertaken to prove up at least 60% of the estimated resource from an Inferred to the
Indicated category as per the JORC (2012) guidelines. The comprehensive Scoping Study will be
made available in full to industry groups on application to the Company. Key elements include:
- Three conceptual underground mining development and production scenarios considered
throughout the Study
- The conceptual scenario selected progresses decline access ramp with a high grade focus
- 4x4 metre mine standard development size
- Mining method and production schedule over estimated mine life
- Efficient mining block sequence identified
- Key Recommendations: Infill drilling campaign to convert resources to the indicated
category (JORC 2012), metallurgical and geotechnical test work and progression to a full
feasibility study.
Commenting today, Laurence Read, Executive Director of Europa Metals, said:
“After an intense year of activity, Europa Metals has successfully obtained a highly detailed Scoping
Study, which clearly recommends that we progress our Toral Project in order to investigate distinct
high grade resource areas and complete all of the necessary metallurgical testwork. The Study also
identified an anomaly in the licence area during the finalisation stage of the report which has now
been investigated and rectified.
“The work undertaken on the Scoping Study models a series of development scenarios, from which
one clear path has become apparent. We shall now use the Study to inform a core part of our strategy
for 2019 as we aim to progress with a full feasibility study. We look forward to announcing results
from our first diamond drill campaign shortly and to continue work on this promising project next
year.”
Commenting today, Myles Campion, Executive/Technical Director of Europa Metals, said:
“Both our team on site at Toral and AMS have delivered a robust and positive Scoping Study, on
time and on budget. We identified the clear potential of the asset last year and have taken a big step
forward with this Study in identifying where value can be further defined and most efficiently
extracted.
“I look forward to advancing our understanding via further work on the Toral deposit next year.”
Revised JORC (2012) resource estimate
An updated JORC (2012) resource estimate is included within the Scoping Study comprising 16
million tonnes, in the Inferred category, @ 7.5% Zn equivalent (Pb, Ag), 3.9% zinc, 3.1% lead and
24g/t silver equating to 640,000 tonnes of zinc, 510,000 tonnes of lead and 13 million ounces of
silver*. The reduction in the resource is due to a coordinate anomaly on the licence area, discovered
during the verification process on the final draft of the Scoping Study, that resulted in an error and
subsequent shift in the historical licencing coordinates. The area that now falls outside the Toral
licence is the NW tip of the resource, however the Company will be able to make an application to
bring it into the Toral licence area upon the future granting of a mining licence for the Toral Project.
In any event, this area of the resource was considered to be outside of the Company’s focus due to
its proximity to the River Sil and its shallow narrow intersection characteristics.
*Zn Eq (PbAg)% is the calculated Zn equivalent incorporating silver credits as well as lead; (Zn Eq (PbAg)% = Zn + Pb*0.96
+ Ag*0.022). Zn equivalent calculations were based on 3-year trailing average price statistics obtained from the London
Metal Exchange and London Bullion Market Association giving an average Zn price of US$2,500/t, Pb price of US$2,100/t
and Ag price of US$17/oz.
2019 Outlook
The Company currently anticipates that the results from its first diamond drilling campaign will be
available in mid-December 2018, following the release of which it will look to expeditiously progress
its Toral Project during 2019, with the following key objectives:
- commencement of an Environmental Impact Study and all baseline work for the duration of
2019;
- completion of a surface work programme, currently underway, to remap the licence area and
incorporate new data into the Toral model;
- conducting an infill diamond drilling programme targeting a distinct high grade area of the
resource. Drilling will seek to convert the Inferred resource into the Indicated status; and
- undertaking both the requisite metallurgical and geotechnical test work in order to progress
the Toral Project towards a feasibility study.
Additional information on the Scoping Study
Mining Summary
AMS were engaged by the Company in June 2018 to undertake a scoping study on the Toral Project.
The project area is slightly mountainous, with elevations of up to 740 metres above sea level (masl),
and with rivers forming the base of the topography at 415 masl. Mineralisation is encountered at
surface and, based on current testing, extends to approximately 1,100m below the surface.
Following the completion of recent exploration work, mineralisation has been tested across a 2,800m
strike length and the orientation of the mineralisation zone is approximately 110 degrees, averaging
approximately 3 metres in thickness. Mineralisation is hosted in a dominant single structure or “lode”
along and immediately adjacent to the limestone-slate contact, with six subordinate lodes.
The region and immediate local area surrounding the project has been host to a mining industry for
a significant period of time with the adjacent, Antonina lead-zinc mine (1935-1983) situated 2km
away from Toral. Data sets to determine the potential for a viable lead-zinc mine are as follows:
- zinc equivalent Inferred Resource of 16 Mt (7.5% Zn equivalent with Pb and Ag credits) and
24 g/t Ag with 640,000 contained tonnes of zinc, 510,000 contained tonnes of lead and 13
million ounces of contained silver;
- historical mining data for mines in the area including metallurgical assumptions, supported
by recent mineralogical studies;
- detailed examination of equivalent plant types currently in operation in terms of throughput
and costs; and
- potential routes for product based on known existing concentrate-smelter routes for lead-zinc
in the wider region.
The Scoping Study concluded that, as a result of the Toral deposit being sub vertical and its particular
combination of depth and thickness, underground mining is a viable development option.
The results of the Scoping Study also suggest that the Toral Project should be investigated to a
feasibility study stage in order to determine full technical and economic viability for a high-grade
lead-zinc-silver mine with the potential for extension of mineralisation outside of the currently
estimated conceptual mine life. Plant construction and processing is anticipated to be low cost with
concentrate production modelled on existing long-term metrics for other mines in the region. The
focus for Europa Metals will be to move the existing high-grade resources from Inferred to the
Indicated category (JORC 2012) and conclude metallurgical testing on samples to confirm the
processing assumptions for final concentrates.
Updated Mineral Resource
As part of the Scoping Study’s licence tenure and permitting investigative work and verification
checks, an identified permit location shift has prompted the requirement to revise the previously
reported Toral Mineral Resource Estimate within Europa Metals’ licence 15.199 and update the input
mineral resource block model used for the purposes of the Scoping Study.
The issue has arisen due to a legacy discrepancy between the historical and current coordinate
systems used in the mining and permitting industry in Spain. The Mineral Resource estimate was
therefore updated due to a coordinate discrepancy and, as such, the block model was also updated
to reflect this change. The reduction in the reported resource through the tenement shift in no way
affects the Scoping Study and economic potential of the project.
The portion of the deposit affected by the boundary issue, containing approximately 3 million tonnes
of mineralisation, is in the north-western extension of the deposit, a very narrow area not currently
considered to be of interest in terms of future mining. The adjustment to the input block model in no
way affects the technical and economic findings of the Scoping Study at this stage.
Under Spanish mining law the area concerned can be secured by Europa Metals at the point the
Company converts its exploration licence to a mining licence, as it cannot be claimed by third parties,
except for the very far western extension, due to the presence of a limestone quarry that operates
at surface. It is envisaged that the quarry will attract little interest due to the elements on surface
including a national road and a river; accordingly, the quarry area can only be mined by underground
methods for high value minerals, if determined economically viable.
Apart from the area under the limestone quarry, which will require direct negotiation with its owner,
the other areas are subject to a defined procedure set out under Spanish mining law and it is currently
anticipated that such areas will be incorporated into Europa Metals’ Toral property upon future grant
of a mining license. The Board of the Company believes that there are no competitors in relation to
securing this further acreage.
The above mentioned reduction in the licence area has led to a temporary loss of approximately 3
million tonnes of resource as set out in Table 1 and Figure 1 and 2.Table 1: Comparison Between the
September 2018 and December 2018 Reduced Licence Area
Contain
Ag Troy
4% Zn Eq Tonnes Density Zn Eq Zn Eq Contained Zn ed Pb
Zn % Pb % Ag g/t Oz
(PbAg)% (Millions) g/cm3 (Pb)% (PbAg)% Tonnes (000s) Tonnes
(Millions)
(000s)
September
2018 19 2.8 6.9 7.4 3.9 3.1 24 720 570 14
Resource
December
2018 16 2.8 7 7.5 3.9 3.1 24 640 510 13
Resource
Figure 1: Resource Outside of Current Licence Area Looking North
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject]
Figure 2: Resource Outside of Current Licence Area in Plan
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Mine Development Scenarios
Entry into the mine would be via a principal decline to reach the various levels, and internally, within
the mine, a series of inclined ramps would be constructed to access the various levels. A ventilation
raise would be drilled (raise-bored) to provide both adequate ambient conditions underground and a
second, emergency means of access/egress into the mine. Actual positioning of this ventilation raise
will be decided at the feasibility stage.
Ore would be delivered to a flotation processing plant by conveyor or haul truck from the mine and
crushed to a suitable product for milling. The milled ore would then be floated by standard flotation
technology to provide two products – a lead and a zinc concentrate. The silver would probably report
to the lead concentrate, the combined metal product then being sold for process separation by the
purchaser. These concentrates would be marketable on the open market or via specialist traders.
Two conceptual mining sequencing scenarios were considered:
1. The first approach considered was to dig the mine access decline from surface and to mine the
near surface +4% mining blocks to start the mine production sequence as quickly as possible.
However, these higher-level blocks are relatively low-grade blocks, due to the current thickness
of sub-2.5m and resultant applied grade dilution. In terms of decline approach mining blocks 1
through to 10 have been identified, progressing down to block 20 and zero RL, then across to
higher grade core as shown in the mining block model in Figure 3.
2. The second approach targeted mining blocks in the high-grade mineralised core directly, as these
blocks in the centre of the mine might prove more attractive financially even though these blocks
would take longer to access, being deeper into the mine. Commencing production at mining block
21 (labelled in Figure 3) onwards, mining the lower numbered mining blocks later in the life of
mine - this approach has been identified as the preferred option for further investigation.
Conceptual sequencing scenarios 1 and 2 in relation to the diluted block model Zn Eq grades are
shown below in Figure 3. Conceptual mine access and haulage designs are shown in Figure 4 and
5.
Figure 3: Conceptual Sequence scenarios 1 and 2 and diluted Zn Eq (Pb, Ag) mining block grades
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Figure 4: Toral Pb-Zn 3D Solid Model, Conceptual Access Decline and Haulage Shaft 3D view
looking South
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Figure 5: Toral Pb-Zn 3D Solid Model, Conceptual Access Decline and Haulage Shaft 3D view
looking West
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Because the schedule is based on Inferred resources, it should be considered to be indicative only
for the purposes of the Scoping Study and is not a statement of intended fact. Mine standard
development size will be 4 m x 4 m.
Mineral Processing
The conceptual processing plant for Toral includes:
- three-stages of crushing;
- single stage of ball mill grinding. The ball mill will operate in a closed circuit with a cluster of
hydro-cyclones;
- sequential Pb and Zn flotation circuits, each incorporating three cleaning stages;
- concentrates and tailings dewatering circuits using thickeners; and
- concentrates and tailings storage and load-out facilities.
The three-stage crushing circuit will reduce the material with an anticipated top size of 600mm to an
anticipated product size of 80% passing (P80) 12 mm.
The subsequent single stage grinding circuit will target a probable P80 grind size of 75 pm, before
Pb and Zn are recovered into rougher concentrates using sequential flotation. The rougher
concentrates will be reground to a size to be confirmed before using a cleaner flotation circuit, but
20 to 35 pm may be needed. The provisional plant flow block diagram is shown in figure 6.
Figure 6: Provisional Process Flow Diagram
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Mine Access
It is proposed that the main access into the Toral underground mine would be via a decline.
However, because of the known vertical extent of the deposit, ore haulage by means of this decline
would most likely be uneconomic below around 600m in vertical depth. Accepted practice is that
decline haulage usually is uneconomic at vertical depths of greater than 600m. Ore haulage would
therefore be by alternative means, as discussed below.
Since ore haulage in trackless vehicles would not be economic at the sorts of depths anticipated at
Toral, it is proposed to mine a raise-bored shaft, equipped with rope guides, to be used as a rock
hoist.
Because the decline is not intended to be used as an ore haulage route, the gradient may be made
steeper than if diesel trucks were being used. The choice of gradient for the haulage case is 8% -
based on good practice for trackless vehicles. Steeper gradients are possible, and manufacturers
claim that steeper grades are possible, but experience dictates that there is a longer-term cost to
employing steeper gradients. On the other hand, where regular haulage in the decline is not
proposed, a gradient of 12% is acceptable.
Plant Location
Following a desk study review of six sites, three potential plant sites were identified and investigated
further, located on the Northern flank of the Toral ridge, as shown in Figure 7. Of the three, two are
within the licence boundary and represent likely candidates for further investigation and qualification
as part of next step feasibility work.
Figure 7: Toral Plant and Tailings Locations and resource model >4% ZnEq. Plan View.
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Conceptual plant layout for sites at Chantin and Peon and conceptual plant 3D solids for Chantin
are shown below in Figure 8 and 9 respectively.
Figure 8: Conceptual Plant Layout for Chantin and Peon Sites, and conceptual tailings sites
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Figure 9: Conceptual Plant 3D Solids tailings for Chantin Site
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Indicative Mining
The choice of mining method is based on the following factors:
- relatively narrow ore zones (~3m)
- steeply dipping zones
- weak mining footwall - slates
- good hanging wall (carbonates)
- medium grade ore - 4 - 8 % Pb/Zn equivalent range
Mechanised Cut and Fill (MCAF) is the proposed method within the Scoping Study. To investigate
the ability to mine economically and in sufficient quantities, AMS generated a resource block model
with a minimum mining width of 2.5m, with dilution factor applied. This had little material effect on
the overall resource grade but would ensure that the more productive mining method of MCAF can
be employed and help identify those areas where local dilution does significantly impact on grade
for exclusion from the conceptual production plan, and/or possible application of other methods of
mining.
Main access levels would be developed at 100 metre vertical intervals from which stope accesses
would be developed. A stope block would be 50 metres in height and would be up to 100 metres
along strike. Much of the development would be in the mineralisation. At the base of the stope
would be an extraction drive from which an ore pass raise would be developed. At the stope sill
level, about 5 metres above the extraction drive, the first cut would be developed along strike,
advancing as a single face at a height of 5 metres. At the end of the stope, the hanging wall would
be extracted in retreat by drilling uppers back along the stope length. Blasted ore would be handled
by Load, Haul Dump machine (“LHD”) into the ore pass raise for mucking on the extraction level into
haul trucks. At the end of the first pass, the stope floor would be raised by a combination of waste
rock and classified tailings hydraulically placed.
On completion of the fill cycle, stoping activity would be resumed. The ore pass raise would be
extended by concrete segments up through the fill and the stope progresses upwards. The stope
will extend upwards to a level around 4 metres below the extraction level of the stope above. This
crown pillar might be extracted in future and the design for this will be elaborated in any future
feasibility study.
In some areas, where the mineral width is less than the minimum mining width of 2.5m, the stope
has been bulked out by introducing lower grade surrounding material. Although this has the effect
of reducing the stope grade, it will enable the use of a more efficient and lower cost mining method
and identify those areas where dilution does significantly impact on grade for exclusion from the
production plan, or possible application of other methods of mining.
A schematic diagram for mechanised cut and fill is shown in Figure 10.
Figure 10: Schematic Mechanised Cut and Fill Diagram (Source: Queens University Mines
Department)
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Waste Rock
Waste rock from initial underground development before backfilling is required, if suitable, will be
utilised for construction and for the initial starter wall for tailings facilities.
It is not anticipated that Acid Mine Drainage (AMD) or Metal Leaching (ML) will be a significant issue
from the Toral waste rock as the deposit is associated with high acid-consuming carbonates
/dolomite. Nevertheless, ore, waste rock and tailings will be the subject of a comprehensive
geochemical characterisation study with AMD/ML predictive testwork as part of the Environmental
and Social Impact Assessment (ESIA) and technical studies. Utilisation of waste rock will be
determined by these studies.
Any surface placement of waste rock will minimise haul distance; stay within the mine’s lease area;
fit the natural terrain and be at sufficient distance from the Sil River to allow water management;
avoid archaeological sites and important cultural/tourist sightlines and will not compromise further
ore targets. At this stage of the Toral Project’s planning it is anticipated that waste rock will be co-
disposed of with process tailings.
Market Studies and Contracts
No market studies have been completed for the project at this time, but the zinc concentrate
produced at Rubiales (28 km from Toral) was noted to contain 0.12% cadmium and 0.16% mercury
so mine product is likely to need appropriate blending at smelters.
No contractual arrangements for smelting exist at this time. Furthermore, no contractual
arrangements have been entered into for the potential future sale of zinc or lead concentrate at this
time. These are assumed and will require further investigation and negotiation as part of a pre-
feasibility study, however, the Scoping Study notes the following:
- Glencore plc provides options at Asturiana and Portovesme, also Nordenham in Northern
Germany.
- Transport of concentrate by boat to Scandinavia and Northern Germany could be an option
if Asturiana and Portovesme are not suitable.
- The third party, Tara Mine’s, Pb-Zn concentrates are shipped via Dublin Port to Boliden AB's
smelters in Kokkola, Finland and Odda, Norway.
- Nyrstar N.V. has smelters in Europe while Boliden AB has smelters in Scandinavia.
Capital and Operating Costs
As 100% of the Mineral Resources at Toral are currently in the Inferred category, in accordance with
Section 8.5 of ASX Guidance Note 31, the Company is not able to publish a production target or
forecast financial information at this time.
Economic Analysis
Europa Metals commissioned AMS to undertake a financial modelling exercise for the Toral Project,
based on a number of different processing scenarios and mining methods. The results of this
exercise, as well as the overall positive outcomes of the Scoping Study, supports the
commencement of a full feasibility study. However, since 100% of the Mineral Resources at Toral
are currently in the Inferred resource category, in accordance with Section 8.5 of ASX Guidance
Note 31, the Company is not able to publish a production target or forecast financial information at
this time.
Resource Statement
For the purposes of the Scoping Study, the input block model resource estimate used was an
updated version of that reported in the Company’s announcement of 20 September 2018 and is set
out below:
The reported total Inferred resource estimate for the Toral Project has an effective date of 29 October
2018 and issue date of 3 December 2018 and is approximately 16 million tonnes at 7.5% Zn
Equivalent (including Pb and Ag credits) and 24 g/t Ag. Individual zinc and lead grades are 3.9% Zn
and 3.1% Pb, with an estimated metal content of 640,000 tonnes of zinc, 510,000 tonnes of lead and
13 million troy ounces of silver.
It is the Company’s opinion that all the elements included in the metal equivalents calculation have
a reasonable potential to be recovered and sold. Grade tonnage curves are shown in Figure 11
below.
Figure 11: Grade Tonnage Curves, tonnage based on Zn equivalent with Pb and Ag credits.
See link: http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralProject
Table 2: Summary of Inferred Mineral Resources for the Toral Project reported at a 4.0% Zn
equivalent cut-off grade and estimated grade and tonnages at various cut off grades.
Contained Contained
Cut-Off Ag Troy
Tonnes Density Zn Eq Zn Eq Zn Pb
Zn Eq Zn % Pb % Ag g/t Oz
(PbAg)%
(Millions) g/cm3 (Pb)% (PbAg)% Tonnes Tonnes
(Millions)
(000s) (000s)
Total
6 9.6 2.8 8.6 9.3 4.7 4 30 450 390 9.1
5 13 2.8 7.7 8.3 4.3 3.5 26 570 450 11
4 16 2.8 7 7.5 3.9 3.1 24 640 510 13
3 19 2.8 6.4 6.9 3.7 2.9 22 700 550 14
Transitional Oxide Material
4 1.5 2.4 5 5.6 2.4 2.7 27 36 42 1.3
Unweathered Fresh Rock
4 15 2.8 7.2 7.7 4.1 3.2 24 610 470 11
Notes:
1. No mineral reserve calculations have been undertaken. Mineral resources that are not mineral reserves do not have
demonstrated economic viability. Please refer to the “Cautionary Statement” at the beginning of this announcement.
2. Numbers are rounded to reflect the fact that an Estimate of Resources is being reported as stipulated by JORC 2012.
Rounding of numbers may result in differences in calculated totals and averages. All tonnages are metric tonnes.
3. Zn equivalent calculations were based on 3 year trailing average price statistics obtained from the London Metal
Exchange and London Bullion Market Association giving an average Zn price of US$2,500/t, Pb price of US$2,100/t
and Ag price of US$17/oz. Recovery and selling factors were incorporated into the calculation of Zn Eq values. It is
the Company’s opinion that the elements included in the metal equivalents calculation (Zinc, Lead and Silver) have
a reasonable potential to be recovered and sold.
4. Zn Eq (PbAg)% is the calculated Zn equivalent incorporating silver credits as well as lead and is the parameter used
to define the cut-off grade used for reporting resources (Zn Eq (PbAg)% = Zn + Pb*0.96 + Ag*0.022).
5. Zn Eq (Pb)% is the calculated Zn equivalent using lead credits only. It is displayed here for comparison purposes (Zn
Eq (Pb)% = Zn + Pb*0.96).
6. The mineral resource estimate set out above for the zinc, lead and silver mineralisation in the Toral Project area is
based on a 3D geologic model and wireframe restricted block model that integrated the exploration work on the Toral
Project up to 20th September 2018. The block model used uniform cell size of 50x2x50m to best suit the orientation
of the mineralisation and sample spacing. The block model was rotated by 20° in plan view to best match the trend
of mineralisation. Sub cells were applied to better fit the wireframe solid models and preserve accurate volume as
much as possible. Cells were interpolated at the parent block scale using an Ordinary Kriged interpolation technique
with a single search ellipsoid orientated to the interpreted strike, dip and pitch of mineralisation.
7. No top cutting was applied to Zn or Pb grades due to the upper detection limit of the data being 30%. High-grade
outlier values for Ag were capped (‘top-cut’) at 200 ppm (g/t) based on the data distribution and statistics.
8. The Inferred mineral resource category for the Toral zinc-lead-silver project set out in Table 2 (at cut-off grades >4%
Zn Equivalent) complies with the resource definitions as described in the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves. The JORC Code, 2012 Edition. Prepared by: The Joint
Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists
and Minerals Council of Australia (JORC).
9. The tonnages and grades reported at a cut-off grade of 3% Zn equivalent are below the economic cut-off grade of
4% and as such should not be considered mineral resources and they are shown here for comparison purposes only.
Mineral resources are reported in accordance with the JORC Code, 2012 edition and in compliance
with the Australian Stock Exchange Chapter 5 ‘Additional reporting on mining and oil and gas
production and exploration activities’ Clause 5.8 (5.8.1 and 5.8.2). Set out in the appendix to this
announcement, JORC 2012 Table 1 Sections 1-4 provides all the information that is material to the
understanding of the reported mineral resources.
In September to October 2018, Europa Metals completed four reverse circulation drill holes drilled
to the East of the input resource block model as reported in the Company’s announcement of 31
October 2018. The results of these holes are currently not included in the input block model used in
the Scoping Study. An updated geological model and mineral resource estimates are to be
completed and reported in due course.
Environmental and Social Issues
Initial screening review has considered the potential impacts of the Toral Project on the landscape
and land-use, hydrology (particularly to the Sil River), biodiversity, project neighbours and to local
socio-economics. While some impacts are inevitable with any mining operation, no fatal flaw or red
flag issues have been identified at this stage.
Land-use Designation
The project area covers the municipalities of Carracedelo, Sobrado, Borrenes, Carucedo,
Villadecanes and Toral de los Vados although none of these villages are in the mining lease. Three
of the Toral Project area municipalities currently designate the project ridge area as protected forest
and change of land-use will therefore be part of the permitting requirements. The process to convert
the land use designation to allow full mine development has been initiated by the Company and
discussions with the Junta of Castilla y León have led to an agreed course of action. A specialist
consultancy, MAGMA Soluciones Ambientales SL (MAGMA), has been engaged to progress the
land-use applications with the three municipalities concerned. MAGMA has a proven track record of
successfully modifying municipal planning instruments for natural resources projects.
In summary, this process requires an initial review of current land use with submissions to each
municipality, followed by a series of studies and reports presented at municipal, provincial and
federal level. The process is estimated to take approximately 18 months. The work programme for
the environmental permitting will run alongside the change of land-use applications.
By way of a precautionary note, permitting could require a long lead-time, as permitting in Castilla y
León can be very protracted, especially where additional studies are stipulated. It is critical to ensure
continuous engagement and discussions with the environmental authorities and local stakeholders
to agree the ESIA’s terms of reference and constantly update them on its progress and findings in
order to pre-empt the demand for lengthy additional studies following ESIA submission.
Recommendations
Exploration Recommendations
The Scoping Study and application of grade thickness and dilution parameters, and likely mine
production schedules, have identified key resource areas for follow up, thereby aiding the next phase
of infill and step out drill and trench targeting and formulation of additional exploration work
programmes.
In order to progress the project, systematic closed grid drilling is required to test the higher-grade
areas to de-risk the Toral Project as well as to inform the model and recategorise tonnes into the
Indicated resource category.
A combination of deep drilling is recommended to upgrade the model. In addition, shallower holes
and trenching to define the upper extents of mineralisation and add additional tonnes in both the
east and west strike extents is also recommended. In particular, there is scope to improve potential
short term production opportunities by step out drilling in untested areas above the high-grade zone
to extend the high-grade core towards shallower earlier accessible levels.
The future upgrade of mineral resources to a higher classification and the identification of additional
resources is not guaranteed. However, it is reasonable to expect such increases as a result of the
following work:
- Infill and step-out drilling in areas of low data density and drill testing of thrust repeat zones.
- Sampling and re-sampling of existing drill core to allow grade control to deposit boundaries
as opposed to sampling interval control and use of actual wall rock grade values for mining
shape dilution skins.
- Accompanying controlled surface trench sampling and logging on drill traverses.
- Airborne and ground based Geophysical surveys
- Improved drilling recoveries.
- Further sampling and structural analysis of the mineral deposit. In particular the collection of
orientated drill core structural readings to aid confidence in the modelling of mineralised
domain geometries.
- Continued and improved Quality Assurance and Quality Control.
- Continued and improved downhole orientation surveys.
- Collection of further density determination across all lithologies, material types and grade
ranges within the mineralised areas and in the surrounding waste rocks.
- Utilisation and application of findings from the Rubiales technical and academic studies, in
particular structural controls on mineralisation and focus of high grade zones and mineral
zonation in certain potentially deleterious elements.
Mining Recommendations
- Geotechnical drilling and test work
- Structural data capture and modelling
- Equipment and mine development, labour and power cost quotations
- Infill drilling to update resources to a higher classification to enable a more accurate
production plan and mine design
Processing Recommendations
- Perform metallurgical testwork on a number of samples of differing characteristics so that a
flowsheet specific for Toral material can be developed.
- Undertake further SEM testwork e.g. modal proportions, deportment, grain sizes, liberation
analysis (on crushed material/concentrates) and association data.
- Develop process engineering.
- Develop CAPEX and OPEX with possible trade-offs between them.
- Produce concentrate samples so that an assessment can be made of deleterious elements
for smelters.
Environmental Recommendations
The work undertaken to date is considered adequate for the current stage of the Toral Project and
allows a basic understanding of the environmental and social issues likely to affect the project. The
additional work recommended by AMS is to advance the permitting, change of land-use designation,
land acquisition, baseline studies and impact assessments required for the next stage of the project’s
development.
Metals price and Cut Off
The Company has reviewed the latest model along with its appointed geological consultants, AMS,
and concluded that a 4% cut-off was appropriate utilising estimated mining parameters typical for
similar types of projects and mineralogy, and an historical three-year trailing average for metal prices,
which, although conservative, was deemed appropriate at this stage in the project’s development.
Zn Price Used: US$2,500/t US$c/lb1.13
Pb Price Used: US$2,100/t US$c/lb0.95
Ag Price Used: US$17/oz
Competent Person’s statement
The Scoping Study and JORC (2012) resource estimate for Toral was prepared by Mr J.N. Hogg, MSc. MAIG
Principal Geologist for AMS, Mr J. Bennett BSc (Hons). ARSM, FIMMM CEng Associate Principal Mining
Engineer for AMS, Dr N. Holloway, CEng, FIMMM Associate Processing Engineer for AMS, and Dr S. Struthers
CEnv, FIMMM, Associate Environmental Consultant for AMS together being independent Competent Persons
within the meaning of the JORC (2012) code and qualified persons under the AIM Note for Mining and Oil &
Gas Companies. The Scoping Study was aided by Mr R. J. Siddle, MSc, MAIG Senior Resource Geologist for
AMS, under the guidance of the competent persons. Mr Hogg, Mr Bennett, Mr Holloway and Ms Struthers
have reviewed and verified the technical information that forms the basis of, and has been used in the
preparation of, the Scoping Study and this announcement, including all analytical data, assumed and acquired
technical and economic inputs, diamond drill hole logs, QA/QC data, density measurements, and sampling,
diamond drilling and analytical techniques, and consent to the inclusion in this announcement of the matters
based on the information, in the form and context in which it appears. Mr Hogg, Mr Bennett, Mr Holloway and
Ms Struthers have also reviewed and approved the technical information in their capacities as qualified persons
under the AIM Rules for Companies.
Additionally, Mr Hogg confirms that the entity is not aware of any new information or data that materially affects
the information contained within the Company’s previous announcements referred to herein.
For further information on the Company, please visit www.europametals.com or contact:
Europa Metals Ltd
Dan Smith, Non-Executive Director and Company Secretary (Australia)
T: +61 417 978 955
Laurence Read, Executive Director (UK)
T: +44 (0)20 3289 9923
Strand Hanson Limited (Nominated Adviser)
Rory Murphy / Matthew Chandler
T: +44 (0)20 7409 3494
Turner Pope Investments (TPI) Limited (Broker)
Andy Thacker
T: +44 (0)20 3621 4120
Sasfin Capital Proprietary Limited (a member of the Sasfin group) (JSE Sponsor)
Sharon Owens
T (direct): +27 11 809 7762
The information contained within this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Glossary of technical terms:
"Ag" silver;
"g" grammes;
"g/t" grammes per tonne;
"Inferred Resource" that part of a Mineral Resource for which quantity and grade (or quality) are
estimated on the basis of limited geological evidence and sampling.
Geological evidence is sufficient to imply but not verify geological and grade
(or quality) continuity. It is based on exploration, sampling and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes;
"JORC" the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves, as published by the Joint Ore Reserves
Committee of The Australasian Institute of Mining and Metallurgy, Australian
Institute of Geoscientists and Minerals Council of Australia;
"JORC (2012)" the 2012 edition of the JORC code;
“LHD” Load, Haul, Dump;
"m" metre;
“masl” metres above sea level
"Mineral Resource" a concentration or occurrence of material of economic interest in or on the
earth's crust in such form and quantity that there are reasonable and
realistic prospects for eventual economic extraction. The location, quantity,
grade, continuity, and other geological characteristics of a Mineral Resource
are known, estimated from specific geological evidence and knowledge, or
interpreted from a well-constrained and portrayed geological model;
"Mt" million tonnes;
"oz" troy ounce;
"Pb" lead;
“SEM” Scanning electron microscope;
"QA/QC" quality assurance/quality control;
"Zn" zinc.
Appendix: Table 1 Appendix 5A ASX Listing Rules (JORC 2012)
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Criteria JORC Code explanation Commentary related to the Toral Project
Sampling - Nature and quality of sampling (e.g. Historic and recent diamond drill core and underground cut channel sampling. Three
techniques cut channels, random chips, or main phases of exploration drilling and sampling:
specific specialised industry
standard measurement tools 1972 - 1984 Peñarroya – Adaro. Diamond drill core method was used to obtain samples
appropriate to the minerals under for geological logging and sampling. Geological and analytical data is recorded on
investigation, such as down hole hardcopy. Selective sampling method was employed around areas of interest. Sampling
gamma sondes, or handheld XRF intervals measure approx. 1m, half core sent for analysis, with half core retained for
instruments, etc). These examples reference. Exact details on core processing, sampling techniques and analytical methods
should not be taken as limiting the are unclear, however subsequent explorers Lundin Mining sent the majority of
broad meaning of sampling. Peñarroya core pulp reject samples to ALS Chemex for multi element re-analysis by ICP.
- Include reference to measures
taken to ensure sample 2006 - 2008 Lundin Mining. Diamond drill core method was used. Core logging
representivity and the appropriate completed on paper. Selective sampling method was employed around areas of interest.
calibration of any measurement Sampling intervals measure approx. 1m, half core sent for analysis, with half core
tools or systems used. retained for reference. Samples typically 1m half core, with samples prepared at the then
- Aspects of the determination of Lundin Laboratory in Suecia, then shipped to ALS Chemex Vancouver for multi-element
mineralisation that are Material to analysis by ICP. Half core samples reduced to -400 microns and 100g sub-sample taken
the Public Report. for analysis. Multi-element re-analysis of available Peñarroya ddh pulp reject samples
- In cases where ‘industry standard’ completed at ALS Chemex Vancouver using ICP.
work has been done this would be
2016 - 2017 Europa Metals. Diamond drill core and underground cut channel sampling
relatively simple (e.g. ‘reverse
methods used to obtain samples for geological logging and sampling. Geological and
circulation drilling was used to
analytical data is recorded on hardcopy. Selective sampling method was employed
obtain 1 m samples from which 3
around areas of interest. Sampling intervals measure approx. 1m, half core sent for
kg was pulverised to produce a 30
analysis, with half core retained for reference. Samples sent to ALS Seville for
g charge for fire assay’). In other
preparation and multi-element analysis by ICP. Half core samples reduced to -400
cases more explanation may be
microns and 100 g sub-sample taken for analysis.
required, such as where there is
coarse gold that has inherent
sampling problems. Unusual
commodities or mineralisation
types (e.g. submarine nodules) may
warrant disclosure of detailed
information.
Criteria JORC Code explanation Commentary related to the Toral Project
Drilling - Drill type (e.g. core, reverse A total of 92 diamond drill holes (Inc. wedges) for 45,000 metres, and 19 underground
techniques circulation, open-hole hammer, channels for 18.75 metres were used as the input database for geological modelling and
rotary air blast, auger, Bangka, resource estimation.
sonic, etc) and details (e.g. core
diameter, triple or standard tube, Drill core diameter was PQ, HQ and NQ depending upon depth. Tube type is unknown
depth of diamond tails, face- for Peñarroya drilling, triple tube method was used for Lundin and Europa Metals
sampling bit or other type, whether campaigns.
core is oriented and if so, by what
method, etc). No orientation has been done on drill core.
Sept-Oct 2018 Europa Metals. Four reverse circulation drill holes were drilled to the East
of the input resource block model as reported in the Company’s announcement of 31
October 2018. The results of these holes are currently not included in the Study. An
updated geological model and mineral resource estimates are to be completed and
reported in due course.
Drill sample - Method of recording and assessing Recovery data was recorded for selected intervals in 23 drillholes (11 Peñarroya, 6
recovery core and chip sample recoveries Lundin and 6 Europa Metals).
and results assessed.
- Measures taken to maximise A total of 332 core recovery measurements exist in the database with average recovery
sample recovery and ensure of 83%. 109 core recovery measurements occur within the interpreted mineralised zone.
representative nature of the
samples. Core recovery was measured over lengths often corresponding to sample length.
- Whether a relationship exists
Recoveries average 80% within the mineralised zone, ranging from 100% down to 19%
between sample recovery and
within areas of broken ground conditions, intense fracturing and alteration.
grade and whether sample bias
may have occurred due to Statistical assessment suggests a possible slight bias exists between recovery and grades,
preferential loss/gain of with higher recovery returning slightly higher average grades. However, due to limited
fine/coarse material. samples findings are currently inconclusive and additional recovery data and
investigation is required to draw conclusions.
Logging - Whether core and chip samples Selected intervals representing areas of interest were logged in the Peñarroya drill holes.
have been geologically and All Lundin and Europa Metals holes were logged in their entirety.
geotechnically logged to a level of
detail to support appropriate Core logging was recorded on paper logs, using a combination of printed graphic log
Mineral Resource estimation, templates (Peñarroya, Lundin), and plain paper (Europa Metals).
mining studies and metallurgical
studies. DH lithology, alteration, mineralisation and structural observations were recorded by
- Whether logging is qualitative or variable interval based on characteristical similarities and change boundaries.
quantitative in nature. Core (or
Criteria JORC Code explanation Commentary related to the Toral Project
costean, channel, etc) photography. Summary interval information was input to Excel, comprising single code field and codes
- The total length and percentage of to describe logged lithology, alteration, mineralisation and major structure for the
the relevant intersections logged. interval.
Graphic and schematic logs were produced for all drilling.
Lundin and Europa Metals core was routinely photographed.
Drill core logging is considered satisfactory for the level of study and resource class.
Sub-sampling - If core, whether cut or sawn and The sub-sampling techniques and sample preparation details are not known for the
techniques and whether quarter, half or all core Peñarroya drill core.
sample taken.
preparation - If non-core, whether riffled, tube Lundin and Europa Metals core was cut by core saw and half core submitted for analysis.
sampled, rotary split, etc and
whether sampled wet or dry. Underground channels were cut by angle grinder/circular saw. A channel approximately
- For all sample types, the nature, 7 cm wide and 5 cm deep to obtain 2-3 kg sample.
quality and appropriateness of the
Sample collection, sample size, preparation and analysis are considered appropriate for
sample preparation technique.
the mineralogy and deposit type.
- Quality control procedures
adopted for all sub-sampling stages Samples are considered representative of the in-situ material collected.
to maximise representivity of
samples. QAQC sample insertion procedures were not employed during the historical Peñarroya
- Measures taken to ensure that the drill campaigns.
sampling is representative of the in
situ material collected, including Lundin Mining completed limited quarter core field duplicate insertion and selected pulp
for instance results for field re-assay by external lab.
duplicate/second-half sampling.
- Whether sample sizes are Europa Metals conducted a QC program of inserting quarter core field duplicates, coarse
appropriate to the grain size of the blank and pulp blank material, external standards, selected pulp repeats and submission
material being sampled. of pulp rejects for umpire lab analysis.
ALS internal QC exists for Peñarroya re-analysis, Lundin and Europa Metals sample
batches.
Quality of assay - The nature, quality and Historical Peñarroya assaying and laboratory procedures are unknown.
data and appropriateness of the assaying
laboratory tests and laboratory procedures used Commercial laboratories ALS Chemex Vancouver and ALS Seville (ISO9001:2008) were
and whether the technique is used for Lundin and Europa Metals drill core respectively and Europa Metals
considered partial or total. underground channel sample analysis.
Criteria JORC Code explanation Commentary related to the Toral Project
- For geophysical tools, Multi-element analysis, including Pb, Zn, Cu, Ag by ICP-MS were completed on all
spectrometers, handheld XRF samples.
instruments, etc, the parameters
used in determining the analysis Over limits samples were re-analysed using ore grade methods of determination.
including instrument make and
model, reading times, calibrations Sample analytical techniques are considered in line with industry standard for this style
factors applied and their of mineralisation.
derivation, etc.
QAQC sample insertion procedures were not employed during the historical Peñarroya
- Nature of quality control
drill campaigns. However, Lundin re-analysis of Peñarroya drill core pulp rejects does
procedures adopted (e.g.
allow for comparison of original and pulp duplicate analysis results for verification
standards, blanks, duplicates,
purposes.
external laboratory checks) and
whether acceptable levels of Lundin Mining completed limited quarter core field duplicate insertion and pulp reject
accuracy (i.e. lack of bias) and re-analysis. No external standards.
precision have been established.
Europa Metals conducted a QC programme of inserting quarter core field duplicates,
coarse blank and pulp blank material, standards, selection of pulp repeats and
submission of pulp rejects for umpire lab re-analysis.
ALS Chemex and ALS Seville internal QC exists for the Peñarroya Lundin re-analysis,
Lundin core and Europa Metals core and channel sample batches.
No significant issues or fatal flaws were identified from the assessment of QA data.
The nature and quantity of QAQC data, procedures employed, level of accuracy and
precision are considered acceptable for the assigned resource classification. The quality
of assay data and laboratory tests is acceptable for the resource classification for this
deposit.
No geophysical tools, spectrometers or handheld XRF instruments were used in the
exploration and resource work.
Verification of - The verification of significant Paper recorded drill hole logging data is transferred to Excel, imported in to MapInfo for
sampling and intersections by either viewing and imported to Micromine 3D geological modelling software for validation.
assaying independent or alternative
company personnel. DGPS collar and survey excel data, and lab analytical data transferred from lab.csv, to
- The use of twinned holes. Excel and imported to Micromine 3D geological modelling software.
- Documentation of primary data,
data entry procedures, data
verification, data storage (physical
Criteria JORC Code explanation Commentary related to the Toral Project
and electronic) protocols. Geological data from gallery is observed and reported by geologists and mining
- Discuss any adjustment to assay engineers.
data.
All analytical data generated from Lundin re-analysis and Lundin core samples, Europa
Metals core and channel samples for use as input to estimation have been verified by
cross reference against lab assay certificates, re-import and re-building of the project
analytical database.
No adjustment to the analytical data was considered necessary, other than conversion to
zinc equivalents for reporting purposes, following industry best practice. Raw analytical
data remained unchanged.
Location of data - Accuracy and quality of surveys Lundin and Europa Metals drill collars were surveyed using a Geomax 35 high-precision
points used to locate drill holes (collar and DGPS device Accuracy +/-3cm. Downhole survey measurements taken using Reflex
down-hole surveys), trenches, Maxibore downhole survey tool.
mine workings and other locations
used in Mineral Resource Peñarroya drill hole collar locations were measured off plans and sections, located on
estimation. the ground and picked up using Geomax 35 high-precision DGPS device. Accuracy +/-5
- Specification of the grid system m. Peñarroya drill hole dip and azimuth measured from historical plans, cross sections
used. and longitudinal section. Accuracy +/-5 m.
- Quality and adequacy of
topographic control. Old workings were surveyed using Lieca Disto tmx310 survey device.
Co-ordinate grid system used is European Terrestrial Reference System 1989 UTM Zone
29.
Topographic DTM taken from 5 m resolution Lidar data MDT05-Lidar, from government
mapping and survey association Plan Nacional de Ortofotografía Aérea (PNOA).
Criteria JORC Code explanation Commentary related to the Toral Project
Data spacing - Data spacing for reporting of Drill and UG channel sample data spacing across the current resource area ranges from
and Exploration Results. approximately 50-100mx50-100m centres within the most densely tested area towards
distribution - Whether the data spacing and the NW, stepping out to approximately 200mx200m within the mid-section, and 100-
distribution is sufficient to 200x500m in the SE. Toral ZnEq block model and sample points are set out in Figure
establish the degree of geological 12 (see link:
and grade continuity appropriate http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsTora
for the Mineral Resource and Ore lProject
Reserve estimation procedure(s)
and classifications applied. The distribution of drillholes, UG channel sampling, supported by surface and
- Whether sample compositing has underground mapping is sufficient to establish the degree of geological and grade
been applied. continuity appropriate for JORC (2012) Inferred classification of resources.
Intervals were not composited at the sampling stage. Grade compositing was done for
domain interpretation and modelling, and 2 m length compositing done for grade
interpolation.
Orientation of - Whether the orientation of Drilling is angled to intercept mineralised structures at high angle, as close to
data in relation sampling achieves unbiased perpendicular to dip and strike as practicable.
to geological sampling of possible structures and
structure the extent to which this is known, No sample bias is introduced by drilling orientation.
considering the deposit type.
- If the relationship between the
drilling orientation and the
orientation of key mineralised
structures is considered to have
introduced a sampling bias, this
should be assessed and reported if
material.
Criteria JORC Code explanation Commentary related to the Toral Project
Sample security - The measures taken to ensure Historical Peñarroya sample security protocols are not available.
sample security.
Lundin/Europa Metals drill core is transported from site to logging facility in securely
covered core boxes by the Lundin/Europa Metals geologists.
Core logged and sampled in secure facility.
Samples are bagged in plastic bags and labelled with individual sample numbers, sample
name and sample location. Each bag is sealed to avoid loss and contamination. Plastic
bags are placed in dry weave bags.
Samples are delivered to laboratory by courier in secured boxes.
Audits or - The results of any audits or reviews Competent Person’s review and discussion of sampling techniques and data took place
reviews of sampling techniques and data. prior to and during the consultant’s site visit between 20-22 November 2017. Findings
were satisfactory and considered appropriate for the JORC (2012) resource
classification.
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral • Type, reference name/number, Toral exploration permit number 15.199 (also referred to as Permiso de Investigacion), is
tenement and location and ownership including located approximately 400 km northwest of Madrid, within the Province of León,
land tenure agreements or material issues with Autonomous Community of Castile and Le?n.
status third parties such as joint ventures,
partnerships, overriding royalties, Licence 15.199 covers an area of 20.29 km².
native title interests, historical sites,
wilderness or national park and Exploration licence 15.199 is owned by GoldQuest Iberica, S.L., a wholly owned subsidiary
environmental settings. of Europa Metals Limited. The licence was renewed on 14 November 2017 for a period of 3
• The security of the tenure held at the years. The current licence period extends to November 2020.
time of reporting along with any known
impediments to obtaining a licence to
operate in the area.
Exploration done • Acknowledgment and appraisal of 1972-1984 – Peñarroya-Adaro. 55 drill holes, 36 wedge drill holes.
by other parties exploration by other parties.
1992-1995 – Geominera. Data re-evaluation.
Criteria JORC Code explanation Commentary
2005-2008 – Lundin Mining. 7 drill holes.
2009-2011 – GoldQuest Mining. Soil and rock geochemistry. Historic gallery mapping. Data
evaluation. NI43-101 Mineral Resource Estimate
2012-2015 – Portex Mining Corporation. Geological mapping. Data re-evaluation.
2015-2016 – GoldQuest Iberica S.L. Soil and rock geochemistry. Geological mapping.
2016-2017 – GoldQuest Iberica S.L. (Europa Metals Limited). 6 drill holes. Historic gallery
mapping and sampling. Data re-evaluation and interpretation.
Geology • Deposit type, geological setting and The Toral project is located in the Southwestern part of the regional West Asturian Leonese
style of mineralisation. Zone (WALZ), a major tectono-stratigraphic unit of the Hercynian Orogeny.
The mineralisation at Toral is considered as structurally controlled carbonate hosted Pb-Zn
type. Shear and thrust fault-controlled mineralisation within favourable carbonate lithology
and favourable contrasting contacts between carbonates and shales.
Styles of mineralisation are boudinage drusy quartz vein, replacement breccia,
disseminated clots associated with silica, carbonate and chlorite alteration.
Main metallic minerals are Sphalerite, Galena, Pyrite, Chalcopyrite and silver.
Drill hole • A summary of all information material Drilling:
Information to the understanding of the exploration
results including a tabulation of the Number of drillholes used: 92
following information for all Material
drill holes: Collar East: 679962mE - 684702mE
o easting and northing of the drill
Collar North: 4708653mN - 4710598mN
hole collar
o elevation or RL (Reduced Level – Collar RL: 410mRL - 753mRL
elevation above sea level in metres)
of the drill hole collar Azimuth: 007° - 345º
o dip and azimuth of the hole
o down hole length and interception Dip: -87° - -40°
depth
o hole length. Length: 82.3m – 1,285.3m
• If the exclusion of this information is
justified on the basis that the Interception depth: 578mRL – -405mRL
information is not Material and this
Criteria JORC Code explanation Commentary
exclusion does not detract from the UG Channels:
understanding of the report, the
Competent Person should clearly Number of channels: 19
explain why this is the case.
Collar East: 680917mE – 682607mE
Collar North: 4709161mN – 4709996mN
Collar RL: 447mRL – 693mRL
Azimuth: 010° - 313°
Dip: -24° - 19°
Length: 0.25m – 4.25m
Cut-off date for input data to geological modelling and block estimation was September 10 th
2018
Data aggregation - In reporting Exploration Results, No top cuts were applied to the Zn and Pb data. However, Lundin and Europa Metals
methods weighting averaging techniques, samples were limited to analytical method upper detection limits of 30% for Zn, Pb
maximum and/or minimum grade
truncations (e.g. cutting of high A top cut of 200 ppm was applied to Ag assay data.
grades) and cut-off grades are
usually Material and should be Data aggregation or Grade Compositing rules for the reporting of exploration drill and
stated. channel significant results were minimum width 1m, minimum average grade 0.5% ZnEq,
- Where aggregate intercepts maximum allowable internal waste of 2m.
incorporate short lengths of high
Zn equivalent calculations were based on 3 year trailing average price statistics obtained
grade results and longer lengths
from the London Metal Exchange and London Bullion Market Association giving an average
of low grade results, the
Zn price of US$2,500/t, Pb price of US$2,100/t and Ag price of US$17/oz. Recovery and
procedure used for such
selling factors were incorporated into the calculation of Zn Eq values. It is the Company’s
aggregation should be stated and
opinion that all the elements included in the metal equivalents calculation (Zinc, Lead and
some typical examples of such
Silver) have a reasonable potential to be recovered and sold.
aggregations should be shown in
detail.
- The assumptions used for any
reporting of metal equivalent
values should be clearly stated.
Criteria JORC Code explanation Commentary
Relationship - These relationships are Mineralisation is interpreted as sub-vertical to steeply dipping to the NE.
between particularly important in the
mineralisation reporting of Exploration Results. Angled drilling is sub-perpendicular to +/- 20º oblique to mineralisation.
widths and - If the geometry of the
intercept lengths mineralisation with respect to the True thickness of mineralisation ranges from approximately 90%-60% downhole interval
drill hole angle is known, its length.
nature should be reported.
- If it is not known and only the
down hole lengths are reported,
there should be a clear statement
to this effect (e.g. ‘down hole
length, true width not known’).
Diagrams - Appropriate maps and sections Appropriate scaled diagrams are included within the AMS Toral JORC (2012) Resource
(with scales) and tabulations of Statement and Technical Report.
intercepts should be included for
any significant discovery being
reported. These should include,
but not be limited to a plan view of
drill hole collar locations and
appropriate sectional views.
Balanced - Where comprehensive reporting All available exploration data for the Toral deposit area has been collected and reported.
reporting of all Exploration Results is not Representative data from all drillings have been reported.
practicable, representative
reporting of both low and high
grades and/or widths should be
practiced to avoid misleading
reporting of Exploration Results.
Other - Other exploration data, if No geophysical works have been completed.
substantive meaningful and material, should
exploration data be reported including (but not Geological mapping and solid geology map generation completed.
limited to): geological
observations; geophysical survey Structural interpretation and 3D modelling completed.
results; geochemical survey
Soil geochemical surveys demonstrate strong coherent Zn in soil anomalism coincident with
results; bulk samples – size and
interpreted controlling structures.
method of treatment;
metallurgical test results; bulk No geotechnical, metallurgical or bulk sample test work completed to date.
density, groundwater,
geotechnical and rock
characteristics; potential
Criteria JORC Code explanation Commentary
deleterious or contaminating
substances.
Further work - The nature and scale of planned Surface drilling and trenching works testing open strike extent to the SE and infill drilling
further work (e.g. tests for lateral within current resource limits to increase confidence and resource class.
extensions or depth extensions or
large-scale step-out drilling). Underground cut-channel sampling and mapping.
- Diagrams clearly highlighting the
areas of possible extensions, Systematic bulk density measurement work.
including the main geological
Preliminary metallurgical testwork.
interpretations and future drilling
areas, provided this information
is not commercially sensitive.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria JORC Code explanation Commentary
Database - Measures taken to ensure that The databases (geological and analytical) are maintained by the geologist.
integrity data has not been corrupted by,
for example, transcription or The database for use as input to mineral resource modelling and estimation has been
keying errors, between its initial validated and verified by AMS and the Competent Person.
collection and its use for Mineral
Resource estimation purposes. Micromine 3D geological modelling and estimation software used for import, validation and
- Data validation procedures used. QAQC verification assessment.
Data checks include checks for overlapping and missing intervals, dh trace errors, missing
survey data, litho and collars.
Criteria JORC Code explanation Commentary
Site visits - Comment on any site visits Competent Person for structurally controlled carbonate hosted Pb-Zn resource estimation
undertaken by the Competent is Mr. James Hogg who has a Masters Degree of Science in Mineral Exploration and is a
Person and the outcome of those member of the Australian Institute of Geoscientists.
visits.
- If no site visits have been A site visits was completed between 20-22 November 2017.
undertaken indicate why this is
the case.
Geological - Confidence in (or conversely, the Based upon the level of available information, geological and deposit complexity,
interpretation uncertainty of) the geological interpretation of the main lithological boundaries and controls to mineralisation are
interpretation of the mineral considered satisfactory and appropriate for the assigned resource class.
deposit.
- Nature of the data used and of any Drillhole lithological and analytical information, prospect scale surface geological mapping,
assumptions made. underground mapping and sampling, location of underground workings were used in
- The effect, if any, of alternative geological interpretation.
interpretations on Mineral
Resource estimation. Alternative interpretations infer potential thrust repeats and potential for additional parallel
- The use of geology in guiding and mineralised zones. However, at the level of information this interpretation remains
controlling Mineral Resource unsupported by drill data and conceptual in nature.
estimation.
Geological model was used to guide the interpretation and continuity of Zn-Pb mineralised
- The factors affecting continuity
domains.
both of grade and geology.
Post mineralisation transfer faults are interpreted to affect continuity by minor offset.
Dimensions - The extent and variability of the Mineralisation is encountered at surface and based on current testing, extends to
Mineral Resource expressed as approximately 1,100 m below the surface. Mineralisation is currently tested across a 3,300
length (along strike or otherwise), m strike length, the orientation of mineralisation zone is approximately 110 degrees,
plan width, and depth below averaging approximately 3 m in thickness.
surface to the upper and lower
limits of the Mineral Resource.
Estimation and - The nature and appropriateness Wireframe solid models were created for each domain based on a mineralisation threshold
modelling of the estimation technique(s) of approximately 0.2% for Zn and Pb (approximately 0.4% Zn+Pb). Analysis of Zn and Pb
techniques applied and key assumptions, grades in cross section and in scatter plots showed a strong relationship and no requirement
including treatment of extreme to model Zn and Pb separately was identified. Ag showed a strong correlation with Pb and
grade values, domaining, was estimated within the Zn/Pb mineralised domain. Interpretation of the mineralised
interpolation parameters and domains were guided by geological interpretation of the deposit incorporating structural
maximum distance of and lithological boundaries.
extrapolation from data points. If
Extrapolation of the Zn-Pb mineralised domain equals approximately 50m along strike in
a computer assisted estimation
the NW direction, approximately 50-80m below the deepest sample in the NW and central
Criteria JORC Code explanation Commentary
method was chosen include a zones, and approximately 200m below the deepest sample in the SE zone. Mineralisation is
description of computer software extrapolated approximately 60m along strike to the SE. Extents of extrapolation are
and parameters used. considered appropriate for the level of information, deposit type, strike and depth extents
- The availability of check tested, observed and geostatistical continuity and the assigned resource class of Inferred.
estimates, previous estimates Figures 13 and 14 (see links:
and/or mine production records http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralPr
and whether the Mineral oject and
Resource estimate takes [http://www.europametals.com/site/PDF/2851_1/PositiveScopingStudyResultsToralPr
appropriate account of such data.
ojectrespectively) show the extrapolated zone of mineral domain block model.
- The assumptions made regarding
recovery of by-products. All samples contained within the mineralised wireframe were composited to a standard
- Estimation of deleterious length for geostatistical analysis and interpolation. Variography was performed on the assay
elements or other non-grade data within the primary mineralised wireframe to generate a series of directional semi-
variables of economic significance variograms for Zn, Pb and Ag. These variograms were used in the Ordinary Kriging process
(e.g. sulphur for acid mine where Zn, Pb and Ag were interpolated and extrapolated using the corresponding
drainage characterisation). variograms on a domain by domain basis. A single pass search was applied to minimise
- In the case of block model conditional bias, the number of input data in each block estimate were restricted to prevent
interpolation, the block size in over smoothing of the estimates.
relation to the average sample
spacing and the search employed. The block model used uniform cell size of 50x2x50 m to best suit the orientation of the
- Any assumptions behind mineralisation and sample spacing. The block model was rotated by 20° in plan view to best
modelling of selective mining match the trend of mineralisation. Sub cells were applied to better fit the wireframe solid
units. models and preserve accurate volume as much as possible. Cells were interpolated at the
- Any assumptions about parent block scale using an Ordinary Kriged interpolation technique with a single search
correlation between variables. ellipsoid orientated to the interpreted strike, dip and pitch of mineralisation.
- Description of how the geological
No top cutting was applied to Zn or Pb grades due to the upper detection limit of the data
interpretation was used to control
being 30%. High-grade outlier values for Ag were capped (‘top-cut’) at 200 ppm (g/t) based
the resource estimates.
on the data distribution and statistics.
- Discussion of basis for using or
not using grade cutting or The current resource completed by AMS on the Toral project compares well with the historic
capping. 2011 NI43-101 reported resource which stated resources at 4% cut off of 18Mt @ 8.4%
- The process of validation, the (Pb+Zn), 27g/t Ag. An AMS audit of the historic resource has identified a number of errors
checking process used, the and issues in regard to input data, estimation methodology, assumptions and reporting of
comparison of model data to drill metal equivalents, and considers the historic resource inaccurate and unreliable.
hole data, and use of
reconciliation data if available. The data was continually validated throughout drilling and at the resource stage. Data was
validated both visually and in Micromine. No significant errors were detected and the data
set is considered robust and compliant with JORC 2012 reporting standards.
Criteria JORC Code explanation Commentary
A comparison between the volume and tonnage of the block model and the volume and
tonnage of the wireframe which represents all mineral domains. The volumes of the
wireframe and block model agree within acceptable limits.
Moisture - Whether the tonnages are Tonnages are estimated on a dry basis.
estimated on a dry basis or with
natural moisture, and the method
of determination of the moisture
content.
Cut-off - The basis of the adopted cut-off Zn equivalent calculations were based on 3 year trailing average price statistics obtained
parameters grade(s) or quality parameters from the London Metal Exchange and London Bullion Market Association giving an average
applied. Zn price of US$2,500/t, Pb price of US$2,100/t and Ag price of US$17/oz. Recovery and
selling factors were incorporated into the calculation of Zn Eq values. It is the Company’s
opinion that all the elements included in the metal equivalents calculation (Zinc, Lead and
Silver) have a reasonable potential to be recovered and sold.
Zn Eq (PbAg)% is the calculated Zn equivalent incorporating silver credits as well as lead
and is the parameter used to define the cut-off grade used for reporting resources (Zn Eq
(PbAg)% = Zn + Pb*0.96 + Ag*0.022).
Zn Eq (Pb)% is the calculated Zn equivalent using lead credits and does not include silver
credits. It is displayed here for comparison purposes (Zn Eq (Pb)% = Zn + Pb*0.96).
Mining factors or - Assumptions made regarding Assumed mining methods are based upon a review of methods of extraction, cost and
assumptions possible mining methods, performance on similar type deposits.
minimum mining dimensions and
internal (or, if applicable, Summary of mining and processing costs used in determination of economic cut off.
external) mining dilution. It is Assumed 90% sub level open stoping and 10% shrinkage mining techniques.
always necessary as part of the Weighted
process of determining Description $/t Weighting
Cost / t
reasonable prospects for eventual
economic extraction to consider Mining - Sub-level OS 25 0.9 22.5
potential mining methods, but the
assumptions made regarding Mining post fill 8 1 8
mining methods and parameters
when estimating Mineral Mining - shrinkage 80 0.1 8
Resources may not always be
rigorous. Where this is the case, Weighted average
38.5
this should be reported with an mining cost
explanation of the basis of the
Criteria JORC Code explanation Commentary
mining assumptions made. Flotation 2 products 17 1 17
G&A 10 1 10
Total per tonne milled 65.5
Metallurgical - The basis for assumptions or Assumed processing methods are based upon a review of methods of extraction, cost and
factors or predictions regarding performance of similar type deposits.
assumptions metallurgical amenability. It is
always necessary as part of the Summary of recovery and selling factors used in the determination of economic cut off and
process of determining equivalents. Assumed 90% sub level open stoping and 10% shrinkage mining techniques
reasonable prospects for eventual with 90% and 95% mining recoveries respectively. Discounted factor for selling concentrate
economic extraction to consider product applied to metal prices. Metal Recoveries and Concentrate Selling Factors are taken
potential metallurgical methods, into account in Zn Eq calculation.
but the assumptions regarding
metallurgical treatment processes Mining Process Conc
Zn % Metal
and parameters made when Metal Recovery Recovery Selling
Equivalent Contribut
reporting Mineral Resources may Metal price Factor Factor Factor
Conversio ion
not always be rigorous. Where US$
n Factor Factor
this is the case, this should be (MRECF) (PRECF) (CONCF)
reported with an explanation of
Zn 2,500 /t 1 0.905 0.93 0.85 0.55
the basis of the metallurgical
assumptions made. 0.96
Pb 2,100 /t 0.905 0.89 0.92 0.38
(x % Pb)
Ag 17 /Oz 0.022 0.905 0.80 0.95 0.07
(x g/t Ag)
Zn Eq
0.905 0.905 0.884
Weighted
Environmental - Assumptions made regarding Tailings disposal in Spain is highly regulated and a sensitive environmental issue. The
factors or possible waste and process proposal at Toral is to maximise utilisation of tailings as underground backfill, as required
assumptions residue disposal options. It is for the mining method; and ensure minimum impact from surface storage of excess tailings.
always necessary as part of the Initial studies favour reducing tailings water content and placement of thickened or filtered
process of determining ‘dry’ tailings to nearby valleys and/or old quarry excavations. Sufficient capacity has been
reasonable prospects for eventual identified for LOM production and water management will include surface water diversion
economic extraction to consider channels and collection of any seepage/run-off for recycling to the plant in a closed circuit
the potential environmental system. At this stage it is assumed that tailings storage will be lined and perimeter
impacts of the mining and
processing operation. While at
Criteria JORC Code explanation Commentary
this stage the determination of monitoring bores will provide detection and collection capacity for returning any leakage to
potential environmental impacts, the plant.
particularly for a greenfields
project, may not always be well The Scoping Study considered several options for the location of mine waste facilities,
advanced, the status of early including valley disposal on the western end of the southern slope of the Toral ridge, that
consideration of these potential are not within sightlines from Las Médulas; several dis-used limestone quarries, including 2
environmental impacts should be to the west of Toral on the other side of the Sil River; highway and rail line; and some smaller
reported. Where these aspects valleys on the northern slope of the ridge.
have not been considered this
should be reported with an
explanation of the environmental
assumptions made.
Bulk density - Whether assumed or determined. The bulk density was calculated using the Archimedes method weighting the samples in air
If assumed, the basis for the and water using a Kern precision balance.
assumptions. If determined, the
method used, whether wet or dry,
the frequency of the
measurements, the nature, size The original resource database contained 190 bulk density measurements. As part of the re-
and representativeness of the logging programme, an additional 1,002 measurements were recorded throughout the
samples. deposit for a total of 1,192 measurements. 105 measurements occurred within the
- The bulk density for bulk material mineralised wireframe. The mean of all bulk density readings within the mineralised zone
must have been measured by wireframe is 2.75 g/cm3 compared with the previous mean for all readings within the
methods that adequately account mineralised domain of 2.46 g/cm3 thereby representing a significant increase in the mean
for void spaces (vugs, porosity, density of the mineralised domain.
etc), moisture and differences
The mean for the mineralised domain oxide/transitional zone is 2.4 g/cm3 and the mean for
between rock and alteration
mineralised domain fresh material is 2.8 g/cm3.
zones within the deposit.
- Discuss assumptions for bulk
density estimates used in the
evaluation process of the different
materials.
Classification - The basis for the classification of The Inferred mineral resource category for the Toral zinc-lead-silver project (at cut-off
the Mineral Resources into grades >4% Zn Equivalent) comply with the resource definitions as described in
varying confidence categories. Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
- Whether appropriate account has Reserves. The JORC Code, 2012 Edition. Prepared by: The Joint Ore Reserves Committee of
been taken of all relevant factors The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and
(i.e. relative confidence in Minerals Council of Australia (JORC).
tonnage/grade estimations,
reliability of input data,
Criteria JORC Code explanation Commentary
confidence in continuity of The result reflects the quality and quantity of data, geostatistical analysis of correlation and
geology and metal values, quality, relationship between mineralised samples (semi-variography) and the Competent Person’s
quantity and distribution of the view of the deposit. The semi-variography reflects the sample density.
data).
Effective date for the resource block model used as input to the Scoping Study is 20
- Whether the result appropriately
September 2018.
reflects the Competent Person’s
view of the deposit.
Audits or reviews - The results of any audits or There has been one historical resource estimate performed on the deposit, completed in
reviews of Mineral Resource 2013 and reported in compliance with NI43-101. A review of the NI43-101 report and
estimates. available models has raised some concerns on the validity of input data used, modelling and
estimation methodologies and resulting reliability of reported resources.
The AMS 2018 resource report has not been audited.
Discussion of - Where appropriate a statement of It is the Competent Person’s opinion that the resource model and estimations are accurate
relative the relative accuracy and given the quantity and quality of data and reported in accordance with JORC 2012 guidelines.
accuracy/ confidence level in the Mineral
The level of confidence is consistent with the level of Inferred categorised mineral resource.
confidence Resource estimate using an
approach or procedure deemed There were sufficient statistical and geostatistical procedures to quantify the accuracy of the
appropriate by the Competent mineral resource.
Person. For example, the
There are no historical production records from the deposit.
application of statistical or
geostatistical procedures to
quantify the relative accuracy of
the resource within stated
confidence limits, or, if such an
approach is not deemed
appropriate, a qualitative
discussion of the factors that
could affect the relative accuracy
and confidence of the estimate.
- The statement should specify
whether it relates to global or
local estimates, and, if local, state
the relevant tonnages, which
should be relevant to technical
and economic evaluation.
Documentation should include
assumptions made and the
Criteria JORC Code explanation Commentary
procedures used.
- These statements of relative
accuracy and confidence of the
estimate should be compared
with production data, where
available.
Section 4 Estimation and Reporting of Ore Reserves
(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral - Description of the Mineral -
Resource Resource estimate used as a - Mineral resource is based on ordinary kriging estimation method.
estimate for basis for the conversion to an
conversion to Ore Reserve. - This scoping study / mining study is not reporting any mining reserves.
Ore Reserves - Clear statement as to whether
the Mineral Resources are
reported additional to, or
inclusive of, the Ore Reserves.
Site visits - Comment on any site visits - Numerous site visits have been undertaken by the JORC Resource Competent
undertaken by the Competent Persons.
Person and the outcome of
those visits.
- If no site visits have been
undertaken indicate why this is
the case.
Study status - The type and level of study -
undertaken to enable Mineral - This scoping study / mining study is not reporting any mining reserves.
Resources to be converted to
Ore Reserves. - This is a Scoping Study level report and as such, there has been no conversion from
- The Code requires that a study Mineral Resources to Ore Reserves.
to at least Pre-Feasibility Study
level has been undertaken to
convert Mineral Resources to
Ore Reserves. Such studies
will have been carried out and
will have determined a mine
Criteria JORC Code explanation Commentary
plan that is technically
achievable and economically
viable, and that material
Modifying Factors have been
considered.
Cut-off - The basis of the cut-off - Cut-off grades are based on comparable European UG mining costs & long term zinc
parameters grade(s) or quality parameters and lead prices.
applied.
Mining factors or - The method and assumptions -
assumptions used as reported in the Pre- - This scoping study / mining study is not reporting any mining reserves.
Feasibility or Feasibility Study
to convert the Mineral - The UG mining method and assumptions are based on approximate mine designs of
Resource to an Ore Reserve analogous deposits.
(i.e. either by application of
appropriate factors by - Mechanised cut and fill (MCAF) is commonly used in narrow, steeply dipping and
optimisation or by preliminary irregular ore bodies.
or detailed design).
- The choice, nature and - Standard geotechnical conditions have been applied for the Toral ore body.
appropriateness of the selected
mining method(s) and other - Pit slope optimisation not applicable.
mining parameters including - Mining dilution = 5% or variable residual thickness factor where less than 2.5m
associated design issues such thick.
as pre-strip, access, etc.
- The assumptions made - Mining recovery = 93%.
regarding geotechnical
parameters (e.g. pit slopes, - Minimum mining width = 2.5m.
stope sizes, etc.), grade control
and pre-production drilling. - 100% of the resource is inferred.
- The major assumptions made
and Mineral Resource model - A decline and associated ventilation and dewatering infrastructure is required
used for pit and stope
before the UG level accesses can be constructed, which are required for MCAFP
optimisation (if appropriate).
mining methods.
- The mining dilution factors
used.
- The mining recovery factors
used.
- Any minimum mining widths
used.
- The manner in which Inferred
Criteria JORC Code explanation Commentary
Mineral Resources are utilised
in mining studies and the
sensitivity of the outcome to
their inclusion.
- The infrastructure
requirements of the selected
mining methods.
Metallurgical - The metallurgical process -
factors or proposed and the - Crush, grind & flotation is the proposed metallurgical process, this is an appropriate
assumptions appropriateness of that process for a base metals project.
process to the style of
mineralisation. - The process has been successfully applied for many decades across the world.
- Whether the metallurgical
process is well-tested - No metallurgical test work has been completed but analogies have been drawn from
technology or novel in nature. the Rubiales mine which is extremely similar in terms of host geology and
- The nature, amount and mineralisation, supported by recent results of polished thin section petrography.
representativeness of
metallurgical test work - No deleterious elements have been identified at this stage. However, the zinc
undertaken, the nature of the concentrate produced at Rubiales was noted to contain 0.12% cadmium and 0.16%
metallurgical domaining mercury so is likely to need appropriate blending at smelters.
applied and the corresponding
metallurgical recovery factors - No bulk sample or pilot scale test work has been completed.
applied.
- Any assumptions or - This scoping study / mining study is not reporting any mining reserves.
allowances made for
deleterious elements.
- The existence of any bulk
sample or pilot scale test work
and the degree to which such
samples are considered
representative of the orebody
as a whole.
- For minerals that are defined
by a specification, has the ore
reserve estimation been based
on the appropriate mineralogy
to meet the specifications?
Environmental - The status of studies of -
potential environmental - No environmental base line studies have been performed to date.
Criteria JORC Code explanation Commentary
impacts of the mining and
processing operation. Details - Significant desktop studies have not identified any hinderances to permitting of the
of waste rock characterisation project.
and the consideration of
potential sites, status of design - Initial mine waste and tailings disposal options have taken visual, geochemistry,
options considered and, where hydrology and geotechnical considerations into account. No characterisation
applicable, the status of studies have been completed.
approvals for process residue
storage and waste dumps
should be reported.
Infrastructure - The existence of appropriate - Infrastructure to suit a 450 Ktpa operation to be installed.
infrastructure: availability of - This will consist of a mine office, change house for employees, a warehouse for mine
land for plant development, consumables including drilling accessories and equipment spare parts, and a repair
power, water, transportation shop for mine mobile equipment, although this may be re-located underground.
(particularly for bulk - There will also be a mine electrical substation for the underground power
commodities), labour, reticulation.
accommodation; or the ease - Other site works will include site roads, not including the mine haulage roads.
with which the infrastructure - There will also be a number of vehicles, including a fire tender and ambulance, plus
can be provided or accessed. personnel vehicles and tailings loader.
Costs - The derivation of, or - Capital costs are based on detailed studies by AMS on other analogous mining
assumptions made, regarding operations.
projected capital costs in the
study. - Operating costs based on other analogous mining operations.
- The methodology used to
estimate operating costs. - Using costs from Infomine 2018.
- Allowances made for the
content of deleterious - No deleterious elements have been identified to date. However, the zinc concentrate
elements. produced at Rubiales was noted to contain 0.12% cadmium and 0.16% mercury so
- The source of exchange rates is likely to need appropriate blending at smelters.
used in the study.
- Derivation of transportation - The long term average rate of US$: € of $1.133 has been applied.
charges.
- The basis for forecasting or - Treatment & Refining charges are based on current data publicly available for lead
source of treatment and concentrate.
refining charges, penalties for
failure to meet specification, - Allowances have been made for government land royalties at a cost of €3,240 p.a..
etc. There is also a further 1.5% NSR payable to Lundin AB which has not been included.
- The allowances made for
Criteria JORC Code explanation Commentary
royalties payable, both
Government and private.
Revenue factors - The derivation of, or -
assumptions made regarding - A head grade of 7.3% ZnEq* (Pb & Ag) (inc. mining loses and dilution) has been
revenue factors including head applied.
grade, metal or commodity
price(s) exchange rates, - A long-term price of US$2,500/t Zn, US$2,100/t Pb and US$17/oz Ag for has been
transportation and treatment applied.
charges, penalties, net smelter
returns, etc.
- The derivation of assumptions
made of metal or commodity
price(s), for the principal
metals, minerals and co-
products.
Market - The demand, supply and stock -
assessment situation for the particular
commodity, consumption - LME for base metals is a transparent and deep market, lead and zinc production
trends and factors likely to from the Toral project (will account for <1% of the lead / zinc market) and is not
affect supply and demand into expected to over supply the market.
the future.
- A customer and competitor - There has been no specification testing completed. However, Toral aims to provide
analysis along with the lead and zinc to LME specifications.
identification of likely market
windows for the product.
- Price and volume forecasts and
the basis for these forecasts.
- For industrial minerals the
customer specification, testing
and acceptance requirements
prior to a supply contract.
Economic - The inputs to the economic - N/A
analysis to produce the net
present value (NPV) in the
study, the source and
confidence of these economic
inputs including estimated
inflation, discount rate, etc.
Criteria JORC Code explanation Commentary
- NPV ranges and sensitivity to
variations in the significant
assumptions and inputs.
Social - The status of agreements with - The Toral exploration licence 15.199 referred to as a Permiso de Investigation (P.I.)
key stakeholders and matters covers an area of 20.29km², centred on co-ordinates 682467E, 4708159N. Minerals
leading to social licence to for investigation are lead, zinc, silver, and limestone.
operate.
Other - To the extent relevant, the -
impact of the following on the - This scoping study / mining study is not reporting any mining reserves.
project and/or on the estimation
and classification of the Ore - No material risks have been identified for the Toral Project.
Reserves:
- Any identified material naturally - There are reasonable grounds to expect that all necessary Government approvals
occurring risks. will be received within the timeframes anticipated within this scoping study report.
- The status of material legal
agreements and marketing
arrangements. - The Toral Project is on an Exploration Lease, a Mining Lease for exploitation will be
- The status of governmental applied for at the pre-feasibility stage.
agreements and approvals
critical to the viability of the
project, such as mineral - There are no material unresolved matters with any parties.
tenement status, and
government and statutory
approvals. There must be
reasonable grounds to expect
that all necessary Government
approvals will be received
within the timeframes
anticipated in the Pre-
Feasibility or Feasibility study.
Highlight and discuss the
materiality of any unresolved
matter that is dependent on a
third party on which extraction
of the reserve is contingent.
Classification - The basis for the classification - This scoping study / mining study is not reporting any mining reserves.
of the Ore Reserves into
varying confidence categories.
Criteria JORC Code explanation Commentary
- Whether the result
appropriately reflects the
Competent Person’s view of
the deposit.
- The proportion of Probable Ore
Reserves that have been
derived from Measured Mineral
Resources (if any).
Audits or reviews - The results of any audits or - This scoping study / mining study is not reporting any mining reserves.
reviews of Ore Reserve
estimates.
Discussion of - Where appropriate a statement -
relative of the relative accuracy and - This scoping study / mining study is not reporting any mining reserves.
accuracy/ confidence level in the Ore
confidence Reserve estimate using an - +/- 30% accuracy applied to this scoping study.
approach or procedure
deemed appropriate by the
Competent Person. For
example, the application of
statistical or geostatistical
procedures to quantify the
relative accuracy of the reserve
within stated confidence limits,
or, if such an approach is not
deemed appropriate, a
qualitative discussion of the
factors which could affect the
relative accuracy and
confidence of the estimate.
- The statement should specify
whether it relates to global or
local estimates, and, if local,
state the relevant tonnages,
which should be relevant to
technical and economic
evaluation. Documentation
should include assumptions
made and the procedures
used.
Criteria JORC Code explanation Commentary
- Accuracy and confidence
discussions should extend to
specific discussions of any
applied Modifying Factors that
may have a material impact on
Ore Reserve viability, or for
which there are remaining
areas of uncertainty at the
current study stage.
- It is recognised that this may
not be possible or appropriate
in all circumstances. These
statements of relative accuracy
and confidence of the estimate
should be compared with
production data, where
available.
Perth
10 December 21018
Date: 10/12/2018 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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