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EUROPA METALS LIMITED - Drilling Update: Hole TOD-022 Completed, Hole TOD-023 Commenced for Metallurgical sample, Toral Zn, Pb & Ag Project,

Release Date: 11/07/2019 09:13
Code(s): EUZ     PDF:  
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Drilling Update: Hole TOD-022 Completed, Hole TOD-023 Commenced for Metallurgical sample, Toral Zn, Pb & Ag Project,

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: Hole TOD-022 Completed, Hole TOD-023 Commenced for Metallurgical
sample, Toral Zn, Pb & Ag Project, Spain


• Drill hole 2 (TOD-022) which commenced on 11 June 2019 now completed:
  - Target depth of 750 metres reached ahead of schedule; total depth of c.760 metres
  - Core processed and sent to independent laboratory for assay

• Drill hole 3 (TOD-023) commenced on 8 July 2019:
  - Drill hole selected for potential metallurgical sample recovery
  - Located within the high-grade Zn Eq Inferred resource area of Toral (as determined by
     surrounding previously assayed drill holes)
  - Seeking to replicate visual analysis of results from an un-assayed historic drill hole by
     Peñarroya-Adaro (“Peñarroya”) which was identified and stored within the IGME “National core
     library”, Andalucia
  - Drill hole location for TOD-023 is also significant in terms of defining a potential Indicated
     Resource and should also contribute to determining the extent of the interpreted, apparent
     plunging high-grade shoots, already identified at the Toral Project

Europa Metals, the European lead-zinc explorer, announces that the second hole (TOD-022) in its
ongoing drill campaign at the 100% owned Toral lead-zinc-silver project (“Toral” or the “Toral
Project”) has successfully been completed reaching a total depth of 761.30 metres (original target
depth of 750 metres). Toral is located in the Province of León, northern Spain, and hosts a 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).

Hole TOD-022 Completion
Core from hole TOD-022 has recently been processed and sent to ALS Laboratories Seville for
independent analysis. TOD-022 is the second hole in the Company’s ongoing diamond drilling
campaign and the first to successfully reach its target objective further to the previously announced
termination of hole TOD-021 due to a substantial deviation in trajectory.
Hole TOD-023 Commenced
With the successful completion of TOD-022 orientated into the 500 metre plus high grade zone of
Toral, the Company commenced drilling of TOD-023 on 8 July 2019. This hole is located within the
previously defined high-grade Inferred resource area of Toral and has been selected by the
Company to be used to potentially retrieve a metallurgical sample.

Hole selection process
TOD-023 aims to replicate the un-assayed results encountered in an historic Peñarroya drill hole,
SJ22, which was drilled as part of a third-party drilling campaign concluded in 1984. Hole SJ22 is
proximate to a series of five other historic drill holes whose locations are shown on the map in Figure
1 (see link:, which were assayed and reported
by Peñarroya as follows:

                                       RL      Hole
                                                         Depth      Depth To
  Hole ID     Easting    Northing              Depth                         Interval (m)    Pb (%)     Zn (%)     Ag (g/t)   Zn Eq (%)
                                                        From (m)      (m)
                                       (m)      (m)
   SJ3D       681522     4710021      580      689.2      673         685          12         5.26      10.12       38.14       15.38
   SJ10       681412     4710212      412      627.3     619.05      622.15        3.1        4.82      24.68       66.21       29.50
  SJ16D       681515     4710017      580      820.6     806.35      815.55        9.2        2.46        7.3       21.71       9.76
   SJ12       681412     4710212      412      744.0      733        735.5         2.5        5.18       4.97        27         10.15
  SJ12D       681412     4710212      412      765.0      756        758.4         2.4        3.24      12.75        32         15.99
Source: Peñarroya results from IGME “National core library”, 1984. Selected significant historic intercepts (> 5% Zn Eq, including
intervals of internal waste up to 2m in thickness) from drilling completed by Peñarroya. Drill holes are diamond core holes, ½ core
sampled at average 1.0m intervals. Drill collars were surveyed using differential GPS, co-ordinate system ETRS89, projection UTM
zone 29N. 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/tOz.
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 is the
calculated Zn equivalent using lead credits and does not include silver credits (Zn Eq = Zn + Pb*0.96).

The historical hole, SJ22, intersected approximately 5 metres of carbonate-silica breccia Pb-Zn
mineralisation, and Europa Metals’ technical team has studied the historic core itself at the National
core library, as well as the un-assayed logs of the intersection (refer to Figures 2 and 3 at:

Structural interpretation – high grade ore shoots
The Toral Project’s lead, zinc and silver mineralisation currently comprises at least 2, possibly 3,
plunging high-grade shoots. Higher grade mineralisation is usually identified at 400 metres from
surface with the majority of the currently defined resource estimate present in distinct areas down to
1,000 metres from surface (where the deposit remains open at depth).

The location of hole TOD-023 will contribute to establishing the continuity and extent of the plunging
high-grade shoots observed in the deposit.

Commenting today, Laurence Read Executive Director of Europa Metals, said:
“Hole TOD-022 has been completed on target and to its planned depth, with core procured and sent
to the laboratory for assay. Drilling of hole TOD-023, targeting the centre of the previously defined
high grade area of the deposit, has recently commenced and seeks to replicate the results of a third
party historic, un-assayed hole, which is not currently included within the existing JORC 2012
resource estimate. TOD-023 has three clear objectives: i) recovery of a significant metallurgical
sample for metallurgical testwork to determine concentrate product types; ii) to assist with the
definition of an initial Indicated resource estimate; and iii) to increase our understanding of how the
high grade ore shoots behave and what the relationships might be between the structures as they
come to surface.”

Competent Person’s Statement

The exploration results and activity reported in this announcement have been reviewed by Mr James
Hogg MSc, BSc (Hons), MAIG who is a Member of the Australian Institute of Geoscientists. Mr Hogg
has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to be deemed a qualified person under the AIM
Note for Mining and Oil & Gas Companies dated June 2009. Mr Hogg consents to the inclusion in
this announcement of the matters based on his information in the form and context in which it

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 Toral Project, as defined within the existing Inferred JORC (2012)
   resource estimate;
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 drill 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; and
• 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*.

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

   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. Announced on 10 December 2018.

United Kingdom
11 July 2019

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

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