Europa Metals Limited (JSE:EUZ) News - Successful Completion of Hydrogeological Programme - Toral Pb, Zn & Ag Project, Spain

Europa Metals Ltd
(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
("Europa Metals" or “the Company”)



Successful Completion of Hydrogeological Programme - Toral Pb, Zn & Ag Project,
Spain



Europa Metals, the European focused lead, zinc and silver developer, is pleased to announce the
successful completion and results of an independent hydrogeological study on its wholly owned Toral
lead, zinc and silver project, Castilla y León, Spain (“Toral” or the “Toral Project”). The progression
of the requisite hydrogeological assessments and monitoring programmes forms a key part of de-
risking the Toral Project for the potential future development of an underground lead, zinc and silver
mining operation.


Highlights
   •   Independent hydrogeological study commissioned from CRS Ingenieria now concluded
       following a 5 month programme

   •   Objective was to assess water conditions and drainage relating to the potential future
       development of the Toral Project

   •   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

   •   Results are in line with the hydrogeological conditions assumed within the Company’s
       existing planned development model for a potential underground lead, zinc and silver mine
       at Toral (please refer to the Appendix below for Bara Consulting/AMS’ previously reported
       preliminary economic study highlights)

   •   Piezometers continue to monitor water levels in line with the Company’s ongoing compliance
       with hydrogeological regulations within the region and Spain




The independent study was commissioned from, and carried out by, CRS Ingenieria
(www.crsingenieria.es), and has now been concluded following an extensive testing programme
undertaken over a 5 month period encompassing a central bore hole and a series of water monitoring
piezometers. Data recovery and logging utilised a series of indicator dyes released into the water
system at various points with subsequent monitoring their presence across a network of piezometers
across the deposit. Using the hydrogeological software module of Rocscience Inc.’s RS2 software,
three levels or horizons have been modelled in the karst system, each being assigned a permeability
based on the results obtained from the pumping tests (2021) and utilisation of a conceptual model
of the system.


The study’s findings allow Europa Metals to establish an initial understanding of the approximate
underground connectivity, flow and permeability within the head area and central area of the system.

Figure 1: location of bore hole and piezometer monitoring stations

http://www.rns-pdf.londonstockexchange.com/rns/3039V_1-2021-12-10.pdf



Key Findings
The pumping tests reinforced the current hydrogeological model for the Toral Project in terms of the
variation of permeability at depth from previous tests. Accordingly, it has facilitated the evaluation of,
and estimation of a range of permeability for, the epiphreatic zone (non-saturated) and the shallow
phreatic (saturated) in a central area of the system, almost 1km from the river (discharge) and
approximately 0.8km from the headwaters.
The hydraulic connections (established through dyes released at injection wells) between hole TOD-
018 and the wells located along the carbonated outcrop (TOP-026, TOP-027, TOD-023 and P-16)
and the Sil River have now been assessed, with a clear flow line between the head area (TOD-018)
of the system and its discharge into the river. The hydraulic connection of the P-11 well with the Sil
River has also been verified.

These connections establish the entire route of the underground flow, from the head areas to the
discharge zone, thereby validating the structure and operation of the proposed conceptual
underground mining development model as outlined by Bara Consulting in the Company’s
announcement of 18 November 2020.

Programme detail
The detection of fluorescein in the TOP-027 well enables Europa Metals to evaluate the flow rate
between this well, located in the central area of the system, and the Injection Well (at hole TOD-
018), a distance of 785m away.

It took 22 days for the first fluorescein to reach the pumping well (TOP-026) and a further 6 days for
it to reach peak concentration. Accordingly, the transit speed of the underground flow
is approximately 30-36m/day. Such speed is relatively slow compared to other modelled karst
systems and suggests extensive development of functional caverns and flows in free circulation.
Consequently, the live well results correspond to the characteristic speeds associated with those of
a typical low-medium karstification and corresponding flows within the saturated zone. This supports
and reinforces the historical data obtained from previous tests and strengthens the Company’s
proposed hydrogeological model for Toral.


Commenting today, Laurence Read, CEO of Europa Metals, said:
“Following an extensive hydrogeological campaign, I am delighted to report the findings of CRS
Ingenieria’s independent study, which fall within the parameters of those previously modelled and
established for Toral. This represents a step forward for the project with a responsible and
appropriate water strategy, accredited by third parties and adhering to best practice regional
regulations and federal Spanish law.
“Our work relating to hydrogeology and the local environment is ongoing, but this study supports our
decision to press ahead with the planned 2022 drilling campaign. This campaign will commence in
the New Year and involve both resource drilling and a series of shallow geotechnical drilling. The
geotechnical component will be designed to assess the suitability of ground conditions for plant site
infrastructure as well as the suitability of local disused quarry sites, which in turn could form part of
a reclamation strategy following consultation with local community groups, by way of filling in areas
with inert waste material from crushing during future production activities and then landscaping the
areas concerned.”



For further information on the Company, please visit:
www.europametals.com
Linkedin:      Europa Metals ltd
Twitter:       @ltdeuropa
Vox:           Europametals
or contact:

Europa Metals Ltd
Dan Smith, Non-Executive Director and Company Secretary (Australia)
T: +61 417 978 955
Laurence Read, CEO (UK)
info@europametals.com

Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 (0)20 7409 3494

WH Ireland Limited (Joint Broker)
Harry Ansell/Dan Bristowe/Katy Mitchell/Sarah Mather
T: +44 (0)20 7220 1666

Turner Pope Investments (TPI) Limited (Joint Broker)
Andy Thacker/James Pope
T: +44 (0)20 3657 0050

JSE Sponsor to Europa Metals




Questco Corporate Advisory Proprietary Limited
Sharon Owens
T: +27 (11) 011 9212


13 December 2021
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.


Toral Project Appendix

The Inferred and Indicated resource for the Pb-Zn-Ag mineralisation located on the Toral property,
licence number 15.199, has been estimated at various cut-offs. For the Toral deposit resource, the
economic cut-off was determined by calculation of block revenue factors based on Zn equivalent
calculations derived from an historical three-year trailing average for Zn, Pb and Ag prices. Indicative
mining and processing costs derived from the 2020 scoping study and typical of the region and
deposit type were applied along with typical mining recovery and dilution factors and metallurgical
recovery factors identified by laboratory studies and production at comparable deposits and
accepted by AMS Consulting. For reporting in compliance with JORC (2012), an economic cut-off
grade of 4% Zn equivalent (including Pb and Ag credits) was selected considering the
aforementioned factors and allowing for some increase in commodity prices to define resources with
a reasonable prospect of eventual economic extraction now or in the near future. Resources are
reported as follows:


Latest updated Mineral Resource Estimate, effective as of 14 September 2021 for the Toral
deposit comprises:

    •   An Indicated resource of approximately 5.9Mt @ 7.1% Zn* Equivalent (including Pb credits),
        4.2% Zn, 3.3% Pb and 27g/t Ag, including:
            - 251,000 tonnes of zinc, 196,000 tonnes of lead and 5.2 million ounces of silver.
    •   An Inferred resource of approximately 14Mt @ 6% Zn Equivalent (including Pb credits), 3.8%
        Zn, 2.5% Pb and 20 g/t Ag, including:
             -   540,000 tonnes of zinc, 350,000 tonnes of lead and 9 million ounces of silver.
    •   A total resource of approximately 20Mt @ 6.3% Zn Equivalent (including Pb credits), 3.9%
        Zn, 2.7% Pb and 22 g/t Ag, including:
             -   790,000 tonnes of zinc, 550,000 tonnes of lead and 14 million ounces of silver.


* 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*0.867 + 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. 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.

Bara Consulting Economic Report Highlights
(18 November 2020 using resource prior to subsequent, above, update focussing on upper, early
year production zones):

    • US$156m NPV at an 8% discount rate
    • 31.3% IRR
    • 17Mt @ 6.7% ZnEq (including Pb credits) resource (JORC 2012) including indicated resource
       of 3.8Mt @ 8.1% ZnEq (including Pb and Ag credits) - 4% cut off grade
• Sub-Level Longhole Stoping (“SLOS”) mining method selected
• 700k tonnes per annum operation with a 7.6% ZnEq mined grade:
       - SLOS with ramp/raise-bore shaft access;
       - 10% dilution;
       - 3.5m average mined mineralised widths
• Processing comprises an ore sorting front-end using X-ray Transmission (“XRT”) followed by
   grinding and flotation
• Grade/recovery: 3.3% Pb/87%; 4.2% Zn/86%; 26.7g/t Ag/85%
• US$79m upfront Capex
• 3-year trailing average metals prices of US$2,668/t for zinc, US$2,099/t for lead and
   US$16.5/oz for silver
• US$963m Revenue over Life of Mine (“LOM”)
• US$477m Opex over LOM
• US$471m EBITDA over LOM
• 49% Operating Margin (US$63.56/t all-in cost)
• 12-year LOM scenario
• Conceptual LOM production schedule incorporates 100% of the existing Indicated resource in
   the early years, ending with elevated zinc grades in the deep Inferred zones
• Deposit open to the east and at depth for potential production expansion during the mine’s life
• Project’s 3-year Investigation Permit renewed until 15 November 2023 (as announced
   previously on 12 November 2020)

Date: 13-12-2021 09:00:00
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