TIDMEUZ
RNS Number : 4374G
Europa Metals Ltd
30 March 2022
30 March 2022
Europa Metals Ltd
("Europa Metals", the "Company" or the "Group") (AIM, AltX:
EUZ)
Results for the Half-Year Ended 31 December 2021
Europa Metals, the European focused lead, zinc and silver
developer, is pleased to announce its unaudited results for the
half-year ended 31 December 2021 (the "Half-Year Financial
Report").
Please see below extracts from the Half-Year Financial Report,
being the:
- Chairman and Interim-CEO's Review
- Review and results of operations
- Consolidated Statement of Profit or Loss and Other Comprehensive Income
- Consolidated Statement of Financial Position
- Consolidated Statement of Changes in Equity
- Consolidated Statement of Cash Flows
A copy of the full Half-Year Financial Report is available on
the Company's website at www.europametals.com .
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
Myles Campion, Interim-CEO and Executive Chairman (UK)
T: +44 (0)20 3289 9923
Linkedin: Europa Metals ltd
Twitter: @ltdeuropa
Vox: Europametals
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 (0)20 7409 3494
WH Ireland Limited (Broker)
Harry Ansell/Dan Bristowe/Katy Mitchell/Sarah Mather
T: +44 (0)20 7220 1666
Questco Corporate Advisory Proprietary Limited (JSE Sponsor)
Sharon Owens
T (direct): +27 (11) 011 9212
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 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
Key Extracts from the Company's unaudited Half-Year Financial
Report are set out below :
Chairman and Interim-CEO's Review
During the reporting period, we have continued to advance our
understanding of the Company's wholly owned Toral lead, zinc and
silver project in the Castilla y Léon region, Spain ("Toral" or the
"Toral Project") as a potential future low capex, high margin,
lead, zinc and silver mine within the EU.
During 2021, Europa Metals prosecuted a very successful drilling
and metallurgical campaign involving a series of holes designed to
achieve an increase in the project's indicated resource estimate
and obtain a bulk sample in order to further our understanding of
the process flowsheet.
The drill campaign initiated in the first half of 2021, targeted
the upper more siliceous levels of the resource at Toral, which
exhibits a lower grade and thinner horizon than the lower carbonate
facies. Results from the drilling yielded some tremendous results
with hole TOD-029 intersecting 20.45m @ 2.68% ZnEq(Pb+Ag) and hole
TOD-034 intersecting 14.85m @ 8.36% ZnEq(Pb+Ag).
The results from the campaign were used to commission an
independent updated resource estimate yielding a 55% increase in
the indicated resource to approximately 5.9 Mt @ 7.1%
ZnEq(including Pb credits) within a total resource of approximately
20 Mt @ 6.3% ZnEq(including Pb credits). Europa Metals is utilising
this substantial updated indicated resource in future prospective
mine scheduling and internal reserve calculations for future
feasibility studies. At our envisaged future mining rate of 700ktpa
steady state, the increase covers the first 10 years' of
production, which is a substantial improvement from where the
resource estimate stood only two years ago.
Our drill campaign also successfully obtained a bulk sample from
some of the daughter holes from holes TOD-029 and TOD-034 which
were submitted to Wardell Armstrong International Limited ("WAI")
for further metallurgical evaluation. As part of this testwork, we
also engaged TOMRA GmbH in Germany to complete a programme of X-Ray
transmission ("XRT") or ore sorting work. Previous programmes had
yielded positive results from this siliceous material illustrating
the potential ability for the grade of this zone to be
upgraded.
Accordingly, the Europa Metals team has progressed Toral from
being a collection of historical data points to a project with the
potential for a future development with good margins at long term
average revenue pricing within a first world jurisdiction with
world class infrastructure. Over the coming period, the Board will
continue with its endeavours to establish a clear pathway forward
for Toral to deliver future returns for shareholders.
In late October 2021, the Company secured a GBP1.5m (gross)
equity financing, through its new broker, WH Ireland Limited ("WH
Ireland"), with the net proceeds to be utilised to further progress
and de-risk Toral and for general working capital purposes, but
also to add additional focus on business development. To this end,
the management team has reviewed over 10 projects, with two being
discussed and evaluated at Board level, and we intend to continue
such activity and to identify, investigate and assess additional
opportunities of potential interest. Further updates will be
provided as and when appropriate.
Myles Campion
Interim-CEO and Executive Chairman
29 March 2022
Review and results of operations
Europa Metals is a European focused lead, zinc and silver
developer.
Operating Results
During the half-year from 1 July 2021 to 31 December 2021, the
Group recorded a net loss after tax of AUD1,357,379 (1 July 2020 to
31 December 2020: net loss of AUD1,647,142).
Toral Lead-Zinc-Silver Project, Spain ("Toral" or the "Toral
Project")
Following the completion of the Scoping Study announced by the
Company in December 2018, workstreams have focused on additional
resource drilling, geotechnical drilling, metallurgical testwork
and environmental baseline studies.
Updated Mineral Resource Estimate
On 1 October 2021, the Company announced an updated independent
mineral resource estimate ("MRE") for Toral. The updated MRE showed
a 55% increase in the indicated resource to approximately 5.9
million tonnes ("Mt") @ 7.1% zinc equivalent ("ZnEq") (including Pb
credits) and 27g/t Ag. In summary, the updated MRE represented an
approximate:
-- 55% increase in Indicated resource tonnes;
-- 39% increase in Indicated contained tonnes of zinc to approximately 251,000 tonnes;
-- 30% increase in Indicated contained tonnes of lead to approximately 196,000 tonnes; and
-- 40% increase in Indicated contained ounces of silver to approximately 5.2 million ounces.
A total resource was reported of approximately 20Mt @ 6.3% zinc
equivalent (including Pb credits), 3.9% Zn, 2.7% Pb and 22g/t Ag,
including:
o 790,000 tonnes of zinc, 550,000 tonnes of lead and 14 million
ounces of silver.
The MRE was reported in accordance with JORC(2012) and
incorporated data obtained from, inter alia:
o 172 diamond drill holes (including wedges) and 4 reverse
circulation (RC) drill holes totalling 59,658.73 metres of drilling
(including environmental drillholes); and
o 19 underground channels for 18.75 metres.
*Zn Eq % is the calculated Zn equivalent incorporating lead
credits; (Zn Eq (Pb)% = Zn + Pb*0.867). Zn Eq (PbAg)% is the
calculated Zn equivalent incorporating silver credits as well as
lead; (Zn Eq (PbAg)% = Zn + Pb*0.867 + Ag*0.027). 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$2,516/t, Pb price of
US$1,961/t and Ag price of US$19.4/oz.
http://www.rns-pdf.londonstockexchange.com/rns/4374G_1-2022-3-29.pdf
Image 1: showing Addison Mining Services Limited's ("AMS")
resource block model for Toral as a 3D view looking north, by
resource category
Metallurgical work programme
Summary of ore sorting
Ore sorting has been identified as having the potential to
unlock value in the shallower, lower grade zones previously not
considered to be economically mineable in the 2018 Scoping Study.
Testing was therefore undertaken to investigate the potential of
pre-concentrate material from the Toral deposit by means of
sensor-based sorting. If successful, pre-concentration of the ore
could provide a number of potential benefits for the project
including:
-- Reducing the size of the requisite process plant (crushing,
grinding and dewatering circuits) whilst maintaining the same
overall throughput;
-- Enabling ore that may otherwise be sub-economic based on grade to be processed; and
-- Allowing higher mining rates without necessarily having to
increase the size of the processing plant.
As reported last year, the sorting results for both the hole
TOD-024 and hole TOD-025L samples were considered to be excellent,
with between 45% - 50% of the mass rejected at, for the hole
TOD-024 sample, 98% Pb recovery, 97% Zn recovery and 92% Ag
recovery, and at, for the hole TOD-025L sample, 98% Pb recovery,
94% Zn recovery and 82% Ag recovery.
The increasing head assay was also pleasing with the hole
TOD-024 sample increasing from 1.04% Pb and 1.01% Zn in the feed to
2.34% Pb and 2.15% Zn and an approximate doubling of the grade in
the sorter product. In the hole TOD-025L sample the increase in
grade was more pronounced with uplifts in the Pb grade from 1.13%
Pb to 4.03% and Zn grade from 0.62% Zn in the feed to 2.06% Zn in
the sorter product.
Ore sorting process
Ore sorting by means of XRT is an established process for
sorting Pb/Zn ores by way of rejecting waste dilution from ores at
low cost prior to more conventional processing by flotation.
Sensor-based sorting was selected for WAI's investigation as it
offers a number of benefits over alternative pre-concentration
methods, such as Dense Media Separation (DMS), including the
ability to change the sorting criteria depending on the feed
material and target specific metals/minerals of interest along with
the added flexibility of not having to be continuously
operated.
Toral ore sorting analysis
On 23 March 2022, the Company announced further positive results
in respect of the XRT ore sorting testwork, carried out by TOMRA
GmbH ("TOMRA") in Germany and overseen by WAI in Cornwall. The
results followed on from the abovementioned previous, encouraging
testwork.
A bulk sample of siliceous mineralisation and two further
discrete carbonate samples (from holes TOD-025D and TOD-028) from
the indicated mineral resource zone at Toral were evaluated by
TOMRA. Such XRT testwork forms part of a wider metallurgical
programme that includes locked cycle flotation testwork and
tailings evaluation for backfill.
The key highlights are summarised as follows:
-- Results from the siliceous bulk sample showed:
o Excellent recovery of 95.7% Pb and 94.3% Zn metal
o 43.7% mass rejection of waste
o An overall enrichment ratio of 1.7 for both the lead and
zinc
o Zn Equivalent (Pb+Ag) grade increased from 3.56% to 6.00%
-- Results from hole TOD-025D revealed:
o Excellent recovery of 98.9% Pb and 94.7% Zn metal
o 46.8% mass rejection of waste
o An overall enrichment ratio of 1.9 for lead and 1.8 for
zinc
o Zn Equivalent (Pb+Ag) grade increased from 6.57% to 12.00%
-- Results from hole TOD-028 demonstrated:
o Excellent recovery of 96.6% Pb and 96.1% Zn metal
o 47.7% mass rejection of waste
o An overall enrichment ratio of 1.8 for both the lead and
zinc
o Zn Equivalent (Pb+Ag) grade increased from 4.24% to 7.67%
Hydrogeological programme
On 13 December 2021, the Company announced the successful
completion and results of an independent hydrogeological study on
Toral, commissioned from CRS Ingenieria, following a five month
programme. The objective was to assess water conditions and
drainage relating to the planned further development of the
project. The bore hole and piezometer programme involved a series
of pumping tests and live monitoring utilising indicator dyes to
assess sub-surface water flows and rates. The results were in line
with the hydrogeological conditions assumed within the Company's
pre-existing planned development model. Piezometers continue to
monitor water levels in line with the Company's ongoing compliance
with hydrogeological regulations within the region and Spain.
CDTI Loan Funding
On 19 October 2020, the Company announced that following an
extensive submission process, an interest -free loan by way of a
grant of EUR466,801.50 (the "Grant") had been awarded to the
Company by the Centre for the Development of Industrial Technology
(CDTI) for use towards research and development ("R&D") at
Toral.
The CDTI is a Public Business Entity in Spain, under the
auspices of the Ministry of Science and Innovation, which fosters
the technological development and innovation of Spanish companies.
The Grant is categorised as a partly refundable loan (with a nil
per cent. interest rate) with the funds received to be allocated
towards the development of R&D technologies relating to the
recording and correction of drillhole deviation at the Toral
Project. Application for the Grant was made further to ongoing work
by Europa Metals and the AIR Institute, linked to the Salamanca
University, and drilling contractors Sondeos y Perforaciones
Industriales de Bierzo SA ("SPI").
The Grant monies can be drawn down by Europa Metals in up to
three tranches subject to certain, pre-defined, operational
milestones being met, with the first tranche of EUR163,380.53
received by the Company prior to the last financial year end.
On 19 July 2021, the Company announced that it had completed the
requisite work and collated and submitted all the relevant
documentation to the CDTI in relation to the Stage 1 milestone of
the Grant.
The core objectives of the Innovation Programme are to retrieve
and process data from drilling at Toral in order to develop
algorithmic software for use in future exploration campaigns to
correct drilling deviation. Biannual repayments of EUR21,822 begin
in 2024, running for 7 years until 2031, with a fixed interest rate
of nil per cent.
On 8 November 2021, the Company announced that the CDTI had
approved the requisite documentation submitted in relation to the
Stage 1 milestone and that the Company had therefore drawn down and
received the second tranche of the Grant being EUR158,628.60.
Stage 2 work will see Toral continue to be used as a live
testing environment by the partnership as the University of
Salamanca continues its analysis and any future commercial benefit
from an eventual product will be shared by the partners. On
completion of the Stage 2 work, currently expected to occur during
2022, a third, and final, tranche of EUR144,792.37 will then be
available for draw down subject to a review by the CDTI confirming
that the requisite criteria of the innovation programme have been
met.
Once the funds have demonstrably been spent on appropriate
R&D exploration activity at the Toral Project by the Company,
70 per cent. of the total Grant will be repayable with the
balancing 30 per cent. then not required to be repaid.
Coronavirus (COVID-19) impact on operations
The Board is actively monitoring the impact of COVID-19 on the
group's operations on an ongoing basis.
The Company's response to the global coronavirus (COVID-19)
health event involved safeguarding key personnel at all sites and
limiting travel, including to work at its sites, further to the
advice and guidance issued by all relevant health authorities and
the Spanish and UK governments.
There does not currently appear to be any material impact on the
Company or any significant uncertainties with respect to events or
conditions which may impact the Company unfavourably as at the
reporting date or subsequently as a result of the Coronavirus
(COVID-19) pandemic.
Competent Person's statement
The information above that relates to Exploration Results is
based on information compiled by Mr J.N. Hogg, MSc. MAIG Principal
Geologist for Addison Mining Services Limited ("AMS"), an
independent Competent Person within the meaning of the JORC (2012)
code and qualified person under the AIM guidance note for mining
and oil & gas companies. Mr Hogg has reviewed and verified the
technical information that forms the basis of, and has been used in
the preparation of, the significant intercepts referred to in this
announcement, including all analytical data, diamond drill hole
logs, QA/QC data, density measurements, and sampling, diamond
drilling and analytical techniques. Mr Hogg consents to the
inclusion of the matters based on the information, in the form and
context in which it appears. Mr Hogg has also reviewed and approved
the technical information in his capacity as a qualified person
under the AIM Rules for Companies.
Corporate
Board changes
Post the reporting period end, on 3 February 2022, the Company
announced that Mr Laurence Read had resigned as CEO and as a
director of the Company and its subsidiaries with effect from 2
February 2022. Accordingly, Mr Myles Campion had assumed the role
of interim-CEO with immediate effect.
Capital raising
On 26 October 2021, the Company announced that it had raised, in
aggregate, gross proceeds of GBP1.5 million through the placing of
19,527,920 new ordinary shares to certain institutional and other
investors and a subscription by certain other investors directly
with the Company of a further 10,472,080 new ordinary shares in
each case at a price of 5 pence per share (the "Fundraising").
The Fundraising was conducted in two tranches, with the initial
tranche of new ordinary shares being issued under the Company's
pre-existing share capital authorities, and the second tranche
issued following the receipt of shareholder approval at the
Company's 2021 Annual General Meeting held on 30 November 2021.
Issue of options
Following the approval of resolution 3 at the Company's Annual
General Meeting, the Company proceeded to issue 1,500,000 adviser
options to Bennelong Corporate Limited, exercisable at 5 pence each
on or before 2 years from their date of issue, and also issued
1,500,000 broker warrants to WH Ireland Limited, exercisable at 5
pence each on or before 3 years from their date of issue.
Shareholder Meeting
On 30 November 2021, the Company held its Annual General Meeting
whereby all resolutions were duly approved by shareholders by way
of a poll.
Events subsequent to the reporting date
On 26 January 2022, the Company provided a corporate and
operational update, which included details of various cost saving
measures and ongoing work streams at Toral.
On 3 February 2022, the Company announced that Mr Laurence Read
had resigned as CEO and as a director of the Company and its
subsidiaries, with effect from 2 February 2022. Accordingly, Mr
Myles Campion had assumed the role of interim-CEO with immediate
effect.
On 23 February 2022, the Company provided an update on, inter
alia, the timing of geotechnical and resource drilling programmes
at Toral, as well as progress on metallurgical testwork.
On 23 March 2022, the Company announced further positive ore
sorting testwork results from TOMRA, which highlighted that the ore
at Toral is amenable to simple beneficiation techniques. It was
also announced that WH Ireland had assumed the role of sole-broker
to the Company with immediate effect.
No other matters or circumstances have arisen since the
reporting date that may significantly affect the operations of the
Company, the results of those operations, or the Company's state of
affairs in future financial years.
Daniel Smith
Director
29 March 2022
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
for the half-year ended 31 December 2021
6 months 6 months
to to
31 December 31 December
2021 2020
AUD AUD
---------------------------------------------------- ------------- -------------
Revenue from continuing operations
Revenue - -
- -
Exploration expenditure (711,643) (950,854)
Foreign exchange (loss)/gain 22,477 (73,865)
Other expenses (668,213) (622,423)
Loss before income tax (1,357,379) (1,647,142)
Income tax (expense)/benefit - -
------------- -------------
Net loss after income tax (1,357,379) (1,647,142)
------------- -------------
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Net exchange (loss)/gain on translation of foreign
operation 8,844 (285,969)
Other comprehensive (loss)/profit for
the period, net of tax 8,844 (285,969)
Total comprehensive loss for the period (1,348,535) (1,933,111)
============= =============
Net (loss) for the period attributable
to shareholders of the Company: (1,357,379) (1,647,142)
------------- -------------
(1,357,379) (1,647,142)
============= =============
Total comprehensive (loss) for the period
attributable to shareholders of the
Company: (1,348,535) (1,933,111)
------------- -------------
(1,348,535) (1,933,111)
------------- -------------
(Loss) per share attributable to the ordinary equity holders
of the Company
Cents per Cents per
Loss per share share share
* basic (loss) per share (2.31) (3.67)
* diluted (loss) per share (2.31) (3.67)
The above Consolidated Statement of Profit or Loss and Other
Comprehensive Income should be read in conjunction with the
accompanying notes in the full Half-Year Financial Report.
Consolidated Statement of Financial Position as at 31 December
2021
31 December 30 June
2021 2021
AUD AUD
------------------------------- ------------- -------------
Current Assets
Cash and short-term deposits 2,525,030 1,180,768
Trade and other receivables 372,974 84,720
Total Current Assets 2,898,004 1,265,488
------------- -------------
Non-current Assets
Plant and equipment 54,789 66,718
Other receivables - 190,523
Right of use assets 19,519 29,277
Capitalised exploration 1,258,838 1,276,964
Total Non-current Assets 1,333,146 1,563,482
------------- -------------
Total Assets 4,231,150 2,828,970
============= =============
Current Liabilities
Trade and other payables 60,536 261,886
Lease liabilities 4,255 16,505
Unearned income 158,382 -
Total Current Liabilities 223,173 278,391
------------- -------------
Non-current Liabilities
Borrowings 212,152 121,727
Total Non-current Liabilities 212,152 121,727
------------- -------------
Total Liabilities 435,325 400,118
============= =============
NET ASSETS 3,795,825 2,428,852
============= =============
Equity
Contributed equity 48,227,649 45,695,303
Accumulated losses (47,737,983) (46,380,604)
Reserves 3,306,159 3,114,153
TOTAL EQUITY 3,795,825 2,428,852
============= =============
The above Consolidated Statement of Financial Position should be
read in conjunction with the accompanying notes in the full
Half-Year Financial Report.
Consolidated Statement of Changes in Equity for the half-year
ended 31 December 2021
Employee
Share
Issued Accumulated Incentive Option Foreign Exchange Total
Capital Losses Reserve Reserve Reserve Equity
AUD AUD AUD AUD AUD AUD
-------------------------------- ----------- ------------- ----------- ---------- ----------------- ------------
At 1 July 2020 42,489,962 (43,121,940) 491,577 2,154,254 485,517 2,499,370
----------- ------------- ----------- ---------- ----------------- ------------
(Loss) for the period - (1,647,142) - - - (1,647,142)
Other comprehensive income (net
of tax) - - - - (285,969) (285,969)
Total comprehensive loss (net
of tax) - (1,647,142) - - (285,969) (1,933,111)
Transaction with owners in their capacity
as owners
Shares issued net of
transaction
costs 3,380,570 - - 162,787 - 3,543,357
Options issued to brokers (174,639) - - 174,639 - -
At 31 December 2020 45,695,893 (44,769,082) 491,577 2,491,680 199,548 4,109,616
=========== ============= =========== ========== ================= ============
At 1 July 2021 45,695,303 (46,380,604) 491,577 2,520,528 102,048 2,428,852
----------- ------------- ----------- ---------- ----------------- ------------
(Loss) for the period - (1,357,379) - - - (1,357,379)
Other comprehensive income (net
of tax) - - - - 8,844 8,844
Total comprehensive loss (net
of tax) - (1,357,379) - - 8,844 (1,348,535)
Transaction with owners in their capacity
as owners
Shares issued net of
transaction
costs 2,532,346 - - - - 2,532,346
Options issued to directors and
management - - - 28,848 - 28,848
Options issued to brokers and
corporate advisers - - - 154,314 - 154,314
At 31 December 2021 48,227,649 (47,737,983) 491,577 2,703,690 110,892 3,795,825
=========== ============= =========== ========== ================= ============
The above Consolidated Statement of Changes in Equity should be
read in conjunction with the accompanying notes in the full
Half-Year Financial Report.
Consolidated Statement of Cash Flows for the half-year ended 31
December 2021
6 months to 6 months
31 December to 31 December
2021 2020
AUD AUD
--------------------------------------------- ------------- ----------------
Cash flows from operating activities
Payments to suppliers and employees (567,590) (416,600)
Payment for exploration and evaluation
costs (890,067) (886,241)
Net cash flows used in operating activities (1,457,657) (1,302,841)
------------- ----------------
Cash flows from investing activities
Payments for plant and equipment (616) (7,698)
Net cash flows used in investing activities (616) (7,698)
------------- ----------------
Cash flows from financing activities
Lease principal repayments (12,853) (13,229)
Proceeds from issue of shares 2,760,272 3,597,214
Costs of capital raising (138,369) (253,101)
Proceeds from borrowings 251,705 260,617
Net cash flows from financing activities 2,860,755 3,591,501
------------- ----------------
Net increase / (decrease) in cash
and cash equivalents 1,402,482 2,280,962
Cash and cash equivalents at beginning
of period 1,180,768 700,642
Effect of foreign exchange on cash
and cash equivalents (58,220) (83,220)
------------- ----------------
Cash and cash equivalents at end of
the period 2,525,030 2,898,384
============= ================
The above Consolidated Statement of Cash Flows should be read in
conjunction with the accompanying notes in the full Half-Year
Financial Report.
- ENDS -
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