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EUROPA METALS LIMITED - Second Phase Metallurgical Test Results for Toral Pb, Zn & Ag Project, Spain,Delayed to Early April 2020

Release Date: 27/03/2020 09:00
Code(s): EUZ     PDF:  
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Second Phase Metallurgical Test Results for Toral Pb, Zn & Ag Project, Spain,Delayed to Early April 2020

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")

Second Phase Metallurgical Test Results for Toral Pb, Zn & Ag Project, Spain,
Delayed to Early April 2020

Europa Metals, the European focused lead-zinc and silver developer, announces an update in
respect of the second phase metallurgical testwork being carried out on material extracted from the
Company’s wholly owned Toral lead, zinc and silver project (“Toral” or the “Toral Project”) situated
in the region of Castilla y León, north-west Spain.

Due to the impact of the coronavirus (COVID-19) pandemic, a delay has unfortunately occurred in
completing the last metallurgical laboratory test and consequently also in transferring the data to
Wardell Armstrong International in the UK. Once this work has been duly completed, now anticipated
to occur in early April 2020, a full metallurgical report, encompassing flowsheet optimisation for
concentrates and a breakdown of deleterious elements, will be obtained by the Company and its
findings announced to the market.


Laurence Read, Executive Director of Europa Metals, commented:
“The Company has unfortunately encountered a delay to the completion of the last test for
deleterious elements required for the finalisation of an updated independent metallurgical report and
publication of its findings. Whilst this is frustrating, given that we had scheduled completion by the
end of Q1 2020, we would like to acknowledge all the efforts of both the laboratory team and Wardell
Armstrong International in seeking to conclude the work by early April 2020 during these challenging
times.”


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/Zoe Alexander
T: +44 (0)20 3657 0050

Sasfin Capital Proprietary Limited (a member of the Sasfin group)
Sharon Owens
T (direct): +27 11 809 7762

United Kingdom
27 March 2020

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.


Appendix: Further information on the Toral Project

JORC (2012) Mineral Resource Estimate
The Toral Project is a traditional polymetallic (lead-zinc-silver) deposit, which is hosted over 6km of strike length of the prospective Lower
Cambrian Vegadeo Limestone formation, that is regionally mineralised along more than 40km of its extent. The deposit represents a
carbonate hosted, structurally controlled deposit type, demonstrating fault-controlled contact, vein, carbonate replacement and breccia
styles of mineralisation situated close to and along the boundary between footwall slates and hanging wall limestones and dolomites. Sub-
ordinate lead-zinc-silver mineralisation also occurs wholly within the hanging wall limestones and dolomites, approaching the contact with
the slates.

Historic drill hole re-logging undertaken by the Company in 2018 provided improved geological, structure, alteration and
weathering/oxidation information, which was incorporated into the interpreted geological and mineralised models for the current JORC
(2012) mineral resource estimate. Surface mapping and remote data interpretation by Europa Metals has enabled the development of an
interpreted fault model, also incorporated into the aforementioned updated geological and mineralised models used in the mineral resource
estimate.

The latest mineral resource estimate (as of 25 October 2019) for the Toral deposit comprised, at a 4% cut-off:

     •       An Indicated resource of approximately 2.7Mt @ 8.9% Zn Equivalent (including Pb credits), 5% Zn, 4.2% Pb and 32g/t Ag
                  -    Including 130,000 tonnes of zinc, 110,000 tonnes of lead and 2.8 million ounces of silver
     •       An Inferred resource of approximately 16Mt @ 7.2% Zn Equivalent (including Pb credits), 4.5% Zn, 2.9% Pb and 22g/t Ag
                  -    Including 690,000 tonnes of zinc, 450,000 tonnes of lead and 11 million ounces of silver
     •       Total Resources of approximately 18Mt @ 7.4% Zn Equivalent (including Pb credits), 4.5% Zn, 3.1% Pb and 24g/t Ag
                  -   Including 830,000 tonnes of zinc, 570,000 tonnes of lead and 14 million ounces of silver

The latest resource update identified potentially economic mineralisation ranging from surface to approximately 1,100m below surface.
The block model currently extends for a strike length of 3,600m and is still open to the east and west along strike and also at depth where
it has not yet been closed off.


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

                                                                 Indicated
         6            2.1           3          10          11          6     4.7      35          120              100             2.4
         5            2.3          2.9        9.6          10          5     4.5      34          130              100             2.6
         4            2.7          2.9        8.9          9.5         5     4.2      32          130              110             2.8
         3            3.0          2.9        8.3          8.9         5     3.9      31          140              120             2.9
                                                                  Inferred
         6            11           2.9        8.4          8.9         5     3.5      26          550              360             8.8
         5            12           2.9        7.9          8.4         5     3.2      24          610              400             9.7
         4            16           2.9        7.2          7.6         5     2.9      22          690              450              11
         3            18           2.9        6.7          7.1         4     2.7      21          740              480              12
                                                                    Total
         6             13           2.9        8.7         9.2         5     3.7      28            670           460            11
         5             15           2.9        8.2         8.6         5     3.4      26            740           510            12
         4             18           2.9        7.4         7.9         5     3.1      24            830           570            14
         3             21           2.9        6.9         7.3         4     2.9      22            880           600            15
                                                     Transitional Oxide Material Total
         4             3            2.9        5.8         6.3         3     3.2      27            87            97             2.6
                                                      Unweathered Fresh Rock Total
         4             15           2.9        7.8         8.2         5     3.1      23            740           470            11

Table 1: Summary of mineral resources for the Toral property reported at a 4.0% Zn equivalent cut-off grade (including Pb and Ag
credits) and estimated grade and tonnages at the various cut-off grades. Figures are rounded to reflect the accuracy of the estimate and
as such totals may not cast.

Notes for table 1:
1. No mineral reserve calculations have been undertaken. Mineral resources that are not mineral reserves do not have demonstrated
   economic viability.
2. Numbers are rounded to reflect the fact that an Estimate of Resources was reported as stipulated by JORC 2012. Rounding of
   numbers may result in differences in calculated totals and averages. All tonnes 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$2,780/t, Pb price of US$2,200/t and Ag price of US$16.4/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.
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*0.935 + Ag*0.018).
5. Zn Eq is the calculated Zn equivalent using lead credits and does not include silver credits (Zn Eq = Zn + Pb*0.935).
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 30 September
   2019. The block model used uniform cell size of 50x4x50m to best suit the orientation of the mineralisation and sample spacing. The
   block model was rotated by 20 degrees in plain 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 kriging.
7. Top cuts were applied to the composite assay grades for 20% Zn, 17% Pb and 125 g/t Ag, any value above the top cut value was
   reduced to that grade.
8. The Indicated and Inferred mineral resource category for the Toral lead-zinc-silver project set out in Table 2 (at cut-off grades less
   than 4% Zn Equivalent) comply with the resource definitions as described in the Australasian Code for the 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 tonnes 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, they are shown here for comparison purposes only.

Bulk density
The resource database contains 2,373 bulk density measurements, with a total of 177 within the mineralised wireframe.

The mean for the mineralised domain transitional zone is 2.75 g/cm3 and the mean for the mineralised domain fresh material is 2.85 g/cm3.
A broad linear relationship between Pb+Zn grade and bulk density was identified from scattergrams and the formula 2.75 + 0.02(Pb+Zn%)
used to estimate block density within the block model.

Preliminary independent metallurgical test results from Wardell Armstrong International (“WAI”) (December 2019).
Overview of sample and metallurgical testwork carried out by WAI:
     •       Grind calibration tests to assess the Bond Abrasion, Rod and Ball work indices and uniaxial compressive strength;
     •       First open flotation tests, optimisation of grind size, float cleaning tests and rougher regrind testing;
     •       Petrographic/mineralogical and scanning electron microscope (SEM) work;
     •       First/single locked cycle testing; and
     •       A series of comminution tests were undertaken to investigate the crushing and grinding characteristics of the sample. The
             testing conducted investigated conventional crushing technologies, the results of which are summarised in the following table:

                                     Comminution Testwork Results
                                     Comminution Test                              Units   Value
                                     Unconfined Compressive Strength (UCS)         MPa     51.8
                                     Bond Abrasion Index                           -       0.5227
                                     Bond Rod Mill Work Index                      kWh/t   12.69
                                     Bond Ball Mill Work Index                     kWh/t   9.83
Flotation Testwork
A series of tests were undertaken to investigate the recovery of lead and zinc to separate concentrates by means of froth flotation. The
testing conducted consisted of: eight rougher flotation tests, four first-stage cleaner flotation tests, six three-stage cleaner flotation tests
and a single locked cycle flotation test.

The results of the locked cycle test are summarised below.

Table 2: Locked cycle flotation test results

                                                         Assay                                              Recovery (%)


Product           Mass (%)           Pb (%)          Zn (%)              Ag (ppm)              Pb              Zn                 Ag


Pb Cl 3 Conc      2.5                57.47           10.06                1,457              84.30            9.65               90.35


Zn Cl 3 Conc      3.4                 1.16           55.78                 38.6               2.25           70.71                3.17


Zn Cl 1 Scav      5.3                 1.74            2.89                 28.8               5.36            5.82                3.76
Tailings

Zn Ro             88.8                0.16            0.41                 1.3                8.09           13.82                2.73
Tailings

Feed              100.0               1.73            2.65                 40.9             100.00           100.00             100.00


The locked cycle test achieved a lead recovery of 84.3% to a concentrate grading 57.5% Pb and a zinc recovery of 70.7% to a concentrate
grading 55.8% Zn. 90.3% of the silver was also recovered to the lead concentrate at a grade of 1,457ppm Ag.

Economic highlights from the Company’s selected development scenario

Estimated economic forecasts for the Toral Project 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.

Date: 27-03-2020 09:00:00
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