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EUROPA METALS LIMITED - Drilling Update for the Toral Project, Spain

Release Date: 13/06/2019 09:00
Code(s): EUZ     PDF:  
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Drilling Update 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")

Drilling Update for the Toral Project, Spain


• Drill hole 1 (TOD-021) terminated at the Company’s instruction following a substantial deviation in
   - Europa Metals’ technical team instructed the drilling contractor to terminate the hole at a depth of
   - Upper zone mineralisation intersected but above the targeted high-grade zone; consequently drill hole
      1 will not be used to secure a metallurgical sample for testwork.
   - Mineralisation encountered in the upper zone will be assayed and reported on in due course.
   - Drilling performance review initiated and hole 2 commenced.

• Drill hole 2 (TOD-022) commenced on 11 June 2019:
   - Target depth of 750 metres, targeting the high-grade zone.
   - Completion anticipated by end of July 2019.

Europa Metals, the European lead-zinc explorer, announces that it has instructed its drilling contractor,
Sondeos y Perforaciones Industriales de Bierzo SA (“SPI”), to terminate its drilling of the first hole (TOD-021)
following a significant trajectory deviation at the Company’s wholly owned Toral lead-zinc-silver project (“Toral”
or the “Project”) located in the Province of León, northern Spain.

Hole TOD-021 has been terminated at a depth of 652.90 metres, as a result of a deviation of the hole during
drilling operations away from its designated target, being the high-grade zone of the existing defined resource.
The deviation took the hole above its planned high-grade zone target and it will not therefore be used to secure
a metallurgical sample. Mineralisation was encountered at TOD-021 and will be assayed and reported on in
due course.

Commencement of Hole TOD-022

Europa Metals has initiated a performance review process with SPI in respect of the drilling and termination of
hole TOD-021. A series of initiatives and procedural changes have been implemented prior to the
commencement of SPI drilling the second hole in the current campaign, TOD-022. The target depth of TOD-
022 is 750 metres, extending into the Project’s high grade mineralisation. The Company anticipates the
completion of hole TOD-022 by the end of July 2019 and further updates will be made in due course as

Commenting today, Laurence Read Executive Director of Europa Metals, said:
“TOD-021 has been terminated at the Company’s instruction due to a deviation in the hole’s trajectory. The
Europa Metals’ team has initiated a performance review with SPI and a new, second hole, has been
commenced targeting the high-grade zone at Toral. Our objectives from this ongoing drill campaign continue
to be the retrieval of a significant mineralised sample for metallurgical testwork, in order to determine
concentrate product types, and the definition of an initial indicated resource estimate for the Project.”

For further information on the Company, please visit 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 (Joint Broker)
Andy Thacker
T: +44 (0)20 3621 4120

Brandon Hill Capital (Joint Broker)
Jonathan Evans/Oliver Stansfield
T: +44 (0)20 3463 5000

Sasfin Capital Proprietary Limited (a member of the Sasfin group)
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.

The core objectives of the current drilling campaign (initiated in May 2019) are as follows:

1. Drill into the higher-grade core of the Project, as defined within the existing Inferred JORC (2012) resource
2. Target high grade areas within the defined resource to further the Company’s understanding of the Project,
   with the aim of increasing confidence in the resource estimate to delineate a portion of the deposit into the
   Indicated resource category; and
3. Obtain a significant sample for metallurgical testwork by independent consultants to determine the potential
   Zn, Pb and Ag concentrate composition from Toral. This will provide additional data to assist process plant
   design and discussions with potential offtake parties.

Rig mobilisation
The rig and associated operating crew is being supplied by Sondeos y Perforaciones Industriales de Bierzo
SA and is being overseen by the Company’s on-site exploration team. The campaign is being conducted using
a single drilling rig with assays sent for independent analysis on a rolling basis.

Addison Mining Services Limited (“AMS”) has been retained to carry out a revised independent resource
estimate update in accordance with JORC (2012) once the campaign has been concluded.

Wardell Armstrong LLP has been engaged to conduct the metallurgical testwork from a representative sample
taken from the drilling.

Economic highlights from the Company’s selected development scenario
Estimated economic forecasts for Toral based on the current level of work (+/-30%) from the Scoping Study
(December 2018) comprise:
• US$110 million net present value (NPV) using a discount rate of 8%;
• 24.4% internal rate of return (IRR);
• Estimated US$33 million CAPEX for a proposed 450ktpa design capacity plant, including associated
  auxiliary costs, with infrastructure being situated near portal entrance on the north side of the deposit;
• Estimated total CAPEX of US$110 million;
• US$25 per tonne indicative OPEX processing cost at steady state conditions;
• US$36 per tonne indicative OPEX mining cost utilising mechanised cut and fill; and
• 15-year production plan, with significant potential for extension.
Basis for announcing economics
The factors that lead the Company to believe that it has a reasonable basis for announcing a production target
and forecast financial information are detailed in the Scoping Study and can be summarised as follows:

Three conceptual underground mining development and production scenarios were considered and developed
throughout the Scoping Study, resulting in the identification of a preferred scenario, highlights from which are
set out below:
• decline ramp access to the north of the deposit, targeting mine production within the higher-grade core
  towards the centre of the planned mining blocks
• entry to mine via a principal decline reaching various levels
• series of internal mining inclined ramps constructed to access levels
• mechanised cut and fill (MCAF) mining method proposed
• 4x4 metre mine standard development size
• 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 lead and zinc concentrate, with silver
  probably reporting to the lead concentrate for sale as a combined product
• 4% Zn Eq cut-off used with potential for mine life extension.

JORC (2012) resource estimate
The Scoping Study was based on a previously announced JORC (2012) resource estimate 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*.

                                                                           Contained Contained
                                                                                                Ag Troy
 4% Zn Eq Tonnes                  Zn Eq   Zn Eq Zn                Pb Ag       Zn        Pb
                    Density g/cm3                                                                 Oz
 (PbAg)% (Millions)               (Pb)% (PbAg)% %                 % g/t     Tonnes    Tonnes
                                                                            (000s)    (000s)

   2018          16           2.8          7        7.5     3.9 3.1 24         640         510            13

*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.

United Kingdom
13 June 2019

Sponsor: Sasfin Capital (a member of the Sasfin Group)

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