Wrap Text
Quarterly Activities and Cashflow Report For the period ended 31 December 2018
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")
Quarterly Activities and Cashflow Report For the period ended 31 December 2018
Highlights:
- Significant period of activity at the Company’s wholly owned Toral lead, zinc and silver project,
Northern Spain
- Positive Scoping Study released which considered three conceptual underground mining
development and production scenarios
- 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
- Key recommendations from the Scoping Study were for an Infill drilling campaign to convert
resources to the Indicated category (JORC 2012), metallurgical and geotechnical test work and
progression to a full feasibility study
- Reverse Circulation (“RC”) extension drill holes reported in the period intersected Zn, Pb and Ag
mineralisation in all 4 holes drilled, including unexpectedly high-grade results near to surface in
drill hole TOR-14. Known boundary of the mineralisation extended 200 metres to the east of the
pre-existing resource estimate
- First Diamond Drilling campaign completed by Europa Metals’ geological team at the Toral project
providing:
- confirmation of block model grade and thickness;
- progress on drilling strategy to remove ‘gaps’ within the known resource (all within 300m of
topographic surface); and
- further information on geotechnical characteristics and structural controls
- Significant results from the diamond drilling included:
- Drill hole TOD-018 which returned 3.8m @ 5.87% Zn Equivalent (Zn, Pb); and
- reportable copper mineralisation intercepted within 280 metres of surface (drill hole TOD-020) -
further investigation ongoing following 0.68% Cu @ 3 metres, including 1m @ 1.34% Cu
- Mineral resource estimate revised to 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*
Post Period End
- Applications submitted seeking the Company’s removal from the official list of the ASX Limited
(“ASX”) (the “Official List”) and migration from the Main Board of the Johannesburg Stock Exchange
(“JSE”) to the Alternative Exchange (“AltX”) operated by the JSE
- Part of the Company’s plan to reduce administrative costs and streamline listing and compliance
costs whilst retaining access to capital from international markets
Note: * - 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.
Operational - Toral Project, Spain
Scoping Study
On 10 December 2018, the Company announced 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 “Scoping Study” or “Study”). The findings of the Study were 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 focused on
near-term recovery of the higher-grade mineralised zones.
Key elements of the Scoping Study included:
- 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
- Identification of optimum plant locations (see Figure 1)
- 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.
To view the Conceptual Plant Layout for Chantin and Peon Sites, and conceptual tailings sites please go
to the following link:
http://www.europametals.com/site/news-announcements/quarterly-reports
Economic Analysis
Europa Metals commissioned Addison Mining Services Limited (“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
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Toral are currently in the Inferred resource category, in accordance with Section 8.5 of ASX Guidance
Note 31, the Company was not able to publish a production target or forecast financial information.
Updated Mineral Resource
As part of the Scoping Study’s licence tenure and permitting investigative work and verification checks,
an identified permit location shift 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 arose 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 consequently 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 affected 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 the 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 below.
Table 1: Comparison Between the September 2018 and December 2018 Reduced Licence Area
Ag
Zn Eq Contained Contained Troy
4% Zn Eq Tonnes Density Zn Eq Zn Pb Ag
(PbAg) Zn Tonnes Pb Tonnes Oz
(PbAg)% (Millions) g/cm3 (Pb)% % % g/t
% (000s) (000s) (Millio
ns)
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
Infill & Extension Drilling
On 31 October 2018, the Company announced the results of its RC extension drilling programme at the
Toral Project. The RC drilling programme intersected Zn, Pb and Ag mineralisation in all 4 holes drilled,
targeting to a depth within 300 metres of the topographic surface.
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All objectives of the RC drilling programme were met following the identification of the mineralised contact
zone along the Toral Licence area. Europa Metals’ geological team is also considering the results of the
TOR-14 drill hole that returned 2 metres at 11.72% zinc equivalent from 251-253 metres. This level of
grade was not anticipated within 300 metres of surface and the Company is analysing how this assay
result impacts its understanding of the new Eastern Extension of the mineralised zone. The RC drilling
campaign further demonstrated the prospectivity of the project’s licence area and of the potential for
hosting a future sustainable zinc, lead and silver mining operation.
On 20 December 2018, the Company announced the results from its initial Phase II infill diamond drilling
programme. The diamond drilling programme intersected zinc, lead and silver (Zn, Pb, Ag) mineralisation
in all three holes drilled, targeting to a depth within 300 metres of the topographic surface. The Phase II
drilling is focused within the existing resource area to fill in gaps within the historic drill patterns.
Europa Metals’ geological team is also considering the results and implications of the TOD-020 drill hole
that returned 3 metres at 0.68% copper from 297.35 metres. Copper traces have historically been
encountered in the deposit, but the significance was unknown. This level of copper was not anticipated
within the deposit so near to surface and follow up work is required to identify controls and the extent of
copper mineralisation.
2019 Outlook
Key objectives for 2019 include:
- 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.
Corporate
The Company undertook no significant corporate activity during the period with operational and group
activities being conducted on or under budget.
Post Period end
On 25 January 2019, the Company announced that it had submitted a formal application to the ASX
requesting the removal of the Company from the Official List pursuant to ASX Listing Rule 17.11. In
addition, the Company announced that it had made an application to move from the Main Board of the
JSE to the AltX with Europa Metals’ primary listing consequently expected to become the AIM market
operated by London Stock Exchange plc on successful completion of the two processes.
Europa Metals securities are currently listed/quoted on three securities exchanges - the Official List, AIM
and the JSE.
Following due consideration, and in order to streamline the Company’s listing and compliance costs, the
Directors of Europa Metals have resolved that the continued listing of the Company’s securities on the
Official List is no longer in the best interests of the Company and its shareholders.
Laurence Read, Executive Director of Europa Metals, today commented:
“The fourth quarter of 2018 saw us complete our independent Scoping Study on Toral, with very positive
results, and announce initial results for our team’s first diamond drilling campaign on the project. Lead-
zinc results were returned from all of the drill holes including an unexpectedly high grade intersection
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near to surface. An intriguing copper result was also returned for the TOD-020 hole requiring further
assessment.
“Post period end, we announced the commencement of a delisting process from the ASX and a proposed
move from the Main Board of the JSE to the AltX. On the ground, work continues at site as we seek to
progress towards a full Feasibility Study for Toral that will be centered on a high grade production core.”
Exploration Interests
The following listing of permits held by the Company is provided in accordance with ASX Listing Rule 5.3
for the quarter ended 31 December 2018:
Project Location Right Number Right Status Holder Percentage
Interest
Toral León Province, 15.199 Investigation GoldQuest 100%
Spain Permit Iberica, S.L.
On 31 October 2018, the Company announced that it had relinquished all rights to the permits the group
previously held in respect of its Lago lead-zinc exploration project (Lago II 6.056 and Lago III 6.058) in
the province of Galacia, Spain. Whilst the Company continues to believe that the area is highly
prospective for lead-zinc, both the size and location of the Lago permit areas did not justify and support
incurring further maintenance and exploration expenditure.
Appendix 5B
Mining exploration entity and oil and gas exploration entity quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity
Europa Metals Ltd
ABN Quarter ended (“current quarter”)
58 097 532 137 31 December 2018
Consolidated statement of cash flows Current quarter Year to date
$A’000 (6 months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers
1.2 Payments for
(a) exploration & evaluation (671) (1,035)
(b) development
(c) production
(d) staff costs
(e) administration and corporate costs (429) (813)
1.3 Dividends received (see note 3)
5
Consolidated statement of cash flows Current quarter Year to date
$A’000 (6 months)
$A’000
1.4 Interest received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Research and development refunds
1.8 Other (provide details if material) - 38
1.9 Net cash from / (used in) operating (1,100) (1,810)
activities
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment
(b) tenements (see item 10)
(c) investments
(d) other non-current assets
2.2 Proceeds from the disposal of:
(a) property, plant and equipment
(b) tenements (see item 10)
(c) investments
(d) other non-current assets
2.3 Cash flows from loans to other entities
2.4 Dividends received (see note 3)
2.5 Other (provide details if material)
2.6 Net cash from / (used in) investing - -
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of shares - 987
3.2 Proceeds from issue of convertible notes
3.3 Proceeds from exercise of share options
3.4 Transaction costs related to issues of - (59)
shares, convertible notes or options
3.5 Proceeds from borrowings
3.6 Repayment of borrowings
3.7 Transaction costs related to loans and
borrowings
3.8 Dividends paid
6
Consolidated statement of cash flows Current quarter Year to date
$A’000 (6 months)
$A’000
3.9 Other (provide details if material)
3.10 Net cash from / (used in) financing - 928
activities
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of
period 1,479 1,272
4.2 Net cash from / (used in) operating (1,100) (1,810)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities - -
(item 2.6 above)
4.4 Net cash from / (used in) financing activities - 928
(item 3.10 above)
4.5 Effect of movement in exchange rates on (17) (28)
cash held
4.6 Cash and cash equivalents at end of 362 362
period
5. Reconciliation of cash and cash Current quarter Previous quarter
equivalents $A’000 $A’000
at the end of the quarter (as shown in the
consolidated statement of cash flows) to the
related items in the accounts
5.1 Bank balances 362 1,479
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
5.5 Cash and cash equivalents at end of 362 1,479
quarter (should equal item 4.6 above)
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6. Payments to directors of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to these parties included in item 1.2 179
6.2 Aggregate amount of cash flow from loans to these parties included
in item 2.3
6.3 Include below any explanation necessary to understand the transactions included in
items 6.1 and 6.2
Directors Fees $157,788, Company Secretarial and Accounting $21,000
7. Payments to related entities of the entity and their Current quarter
associates $A'000
7.1 Aggregate amount of payments to these parties included in item 1.2
7.2 Aggregate amount of cash flow from loans to these parties included
in item 2.3
7.3 Include below any explanation necessary to understand the transactions included in
items 7.1 and 7.2
8. Financing facilities available Total facility amount Amount drawn at
Add notes as necessary for an at quarter end quarter end
understanding of the position $A’000 $A’000
8.1 Loan facilities
8.2 Credit standby arrangements
8.3 Other (please specify)
8.4 Include below a description of each facility above, including the lender, interest rate and
whether it is secured or unsecured. If any additional facilities have been entered into or are
proposed to be entered into after quarter end, include details of those facilities as well.
9. Estimated cash outflows for next quarter $A’000
9.1 Exploration and evaluation 170
9.2 Development
9.3 Production
9.4 Staff costs
9.5 Administration and corporate costs 320
9.6 Other (provide details if material)
9.7 Total estimated cash outflows 490
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10. Changes in Tenement reference and Nature of Interest Interest
tenements location interest at at end
(items 2.1(b) and beginnin of
2.2(b) above) g of quarter
quarter
10.1 Interests in mining Lago II 6.056 Exploration 100% -
tenements and permit in
Lago III 6.058 100% -
petroleum progress
tenements lapsed, Galicia Province, Spain
Investigation
relinquished or
permit in
reduced
progress
10.2 Interests in mining
tenements and
petroleum
tenements acquired
or increased
Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which
comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Sign here: Lodged electronically Date: 31 January 2019
Print name: Daniel Smith
Company Secretary
Notes
1. The quarterly report provides a basis for informing the market how the entity’s activities have been
financed for the past quarter and the effect on its cash position. An entity that wishes to disclose
additional information is encouraged to do so, in a note or notes included in or attached to this
report.
2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the
definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared
in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A,
the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows
from investing activities, depending on the accounting policy of the entity.
Competent Person’s statement
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The Scoping Study and JORC (2012) resource estimate for Toral was prepared by Mr J.N. Hogg, MSc.
MAIG Principal Geologist for Addison Mining Services Limited (“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 guidance 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.
Perth
31 January 2019
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