Lithium Hydroxide Produced - Clarification

For immediate release

8 April 2019

EUROPEAN METALS HOLDINGS LIMITED

CINOVEC PROJECT UPDATE - BATTERY GRADE LITHIUM HYDROXIDE PRODUCED - CLARIFICATION ON TEST-WORK PROCESS

 

 

HIGHLIGHTS

 

·     Flowsheet successfully developed and tested for the production of lithium hydroxide from Cinovec ore.

·     A potential production rate in excess of 25,000 tpa lithium hydroxide has been demonstrated to be possible utilising a robust process route proven in the lithium production sector.

·     A formal update of the project PFS reflecting the production of lithium hydroxide is underway and will be completed within the next 6 weeks.

 

European Metals Holdings Limited ("European Metals" or "the Company") is pleased to provide a project update highlighting the outcomes from a recently completed engineering assessment of the flowsheet and subsequent testwork aimed at demonstrating the ability to produce lithium hydroxide from Cinovec ore.  The move by the Company to develop a process for the production of lithium hydroxide from the Cinovec project is in response to market forces that continue to move Czech and European manufacturers towards the production of advanced technology batteries.

 

The engineering assessment and associated testwork were conducted on aspects of the hydrometallurgical portion of the flowsheet of the Preliminary Feasibility Study (PFS) reported on 19 April 2017 (PFS confirms potential low-cost lithium carbonate producer).

 

A series of tests were completed in recent months by Dorfner Anzaplan in Germany looking initially at the direct production of lithium hydroxide from leach liquors and subsequently testing a more traditional route of converting lithium carbonate through to lithium hydroxide.

 

While both process routes were successful in producing battery grade lithium hydroxide, assessment of the relevant process risks indicated that the more robust flowsheet involved the production of battery grade lithium carbonate followed by conversion to battery grade lithium hydroxide.  The composition of the material produced compared with a typical industry specification is detailed in the table 1 below.

 

Species	Typical Specification (ppm)	EMH (ppm)
Na	50	<1
K	50	<1
Cl	30	<15
SO4	100	~51
Fe	7	<1

 

Table 1: Lithium hydroxide comparison to typical specification

 

The engineering assessment was conducted using a 4.3kg sample of lithium concentrate taken from a stock of historic ore samples taken from various sites in the Cinovec deposit.  The sample was subjected to roasting after mixing with sodium sulphate, gypsum and limestone to a prescribed ratio, water leached, various steps of purification undertaken finally rendering a battery grade lithium hydroxide laboratory scale sample upon completion.

 

The result of the testwork was the production of a sample of battery grade lithium hydroxide.  The work concentrated on the grade of product produced and not recovery rates.  The total amount of product produced was below 10 grams.  Further information regarding the sampling techniques and data is set out in the tables annexed to this announcement.

 

This data is now being used as the foundation for an update of the PFS such that the final product from the process will be battery grade lithium hydroxide with the option to produce battery grade lithium carbonate should the market support both products.  The relevant flowsheets will be available upon completion of this engineering work. 

 

European Metals MD Keith Coughlan commented, "The clear majority of European battery producers are indicating a requirement for lithium input to be supplied as battery grade lithium hydroxide.  The fact that EMH has now demonstrated the ability to produce this product from Cinovec ore is an exciting development that will enable the Company to supply its final product into the European marketplace.

Meeting the European battery market's requirements and expectations is foremost in our considerations.  EMH's next step is a formal update of the 2017 PFS, the outcomes from which will be reported shortly."

 

 

 

BACKGROUND INFORMATION ON CINOVEC

PROJECT OVERVIEW

 

Cinovec Lithium/Tin Project

 

European Metals, through its wholly owned subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt @ 0.45% Li₂O and 0.04% Sn and an Inferred Mineral Resource of 323.5Mt @ 0.39% Li₂O and 0.04% Sn containing a combined 7.18 million tonnes Lithium Carbonate Equivalent and 263kt of tin reported 28 November 2017 (Further Increase in Indicated Resource at Cinovec South). An initial Probable Ore Reserve of 34.5Mt @ 0.65% Li₂O and 0.09% Sn reported 4 July 2017 (Cinovec Maiden Ore Reserve - Further Information) has been declared to cover the first 20 years mining at an output of 22,500tpa of lithium carbonate reported 11 July 2018 (Cinovec Production Modelled to Increase to 22,500tpa of Lithium Carbonate).

 

This makes Cinovec the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource.

 

The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining operation.

 

EMH has completed a Preliminary Feasibility Study, conducted by specialist independent consultants, which indicated a return post tax NPV of USD540m and an IRR of 21% reported 19 April 2017 (PFS Confirms Potential Low Cost Lithium Carbonate Producer). It confirmed the deposit is amenable to bulk underground mining. Metallurgical test work has produced both battery grade lithium carbonate and high-grade tin concentrate at excellent recoveries. Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed road adjacent to the deposit, rail lines located 5 km north and 8 km south of the deposit and an active 22 kV transmission line running to the historic mine. As the deposit lies in an active mining region, it has strong community support.

 

The economic viability of Cinovec has been enhanced by the recent strong increase in demand for lithium globally, and within Europe specifically.

 

There are no other material changes to the original information and all the material assumptions continue to apply to the forecasts.

 

CONTACT

For further information on this update or the Company generally, please visit our website at www. http://europeanmet.com or contact:

Mr. Keith Coughlan
Managing Director  

COMPETENT PERSON

Information in this release that relates to exploration results is based on information compiled by Dr Pavel Reichl. Dr Reichl is a Certified Professional Geologist (certified by the American Institute of Professional Geologists), a member of the American Institute of Professional Geologists, a Fellow of the Society of Economic Geologists and is a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and a Qualified Person for the purposes of the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009. Dr Reichl consents to the inclusion in the release of the matters based on his information in the form and context in which it appears. Dr Reichl holds CDIs in European Metals.

The information in this release that relates to Mineral Resources and Exploration Targets has been compiled by Mr Lynn Widenbar. Mr Widenbar, who is a Member of the Australasian Institute of Mining and Metallurgy, is a full time employee of Widenbar and Associates and produced the estimate based on data and geological information supplied by European Metals. Mr Widenbar has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the JORC Code 2012 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Mr Widenbar consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Information included in this release constitutes forward-looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company's business and operations in the future. The company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company's control.

Although the company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

 

LITHIUM CLASSIFICATION AND CONVERSION FACTORS

Lithium grades are normally presented in percentages or parts per million (ppm). Grades of deposits are also expressed as lithium compounds in percentages, for example as a percent lithium oxide (Li₂O) content or percent lithium carbonate (Li₂CO₃) content.

Lithium carbonate equivalent ("LCE") is the industry standard terminology for, and is equivalent to, Li₂CO₃. Use of LCE is to provide data comparable with industry reports and is the total equivalent amount of lithium carbonate, assuming the lithium content in the deposit is converted to lithium carbonate, using the conversion rates in the table included below to get an equivalent Li₂CO₃ value in percent. Use of LCE assumes 100% recovery and no process losses in the extraction of Li₂CO₃ from the deposit.

Lithium resources and reserves are usually presented in tonnes of LCE or Li.

The standard conversion factors are set out in the table below:

Table: Conversion Factors for Lithium Compounds and Minerals

Convert from		Convert to Li	Convert to Li2O	Convert to Li2CO3
Lithium	Li	1.000	2.153	5.324
Lithium Oxide	Li2O	0.464	1.000	2.473
Lithium Carbonate	Li2CO3	0.188	0.404	1.000

 

WEBSITE

A copy of this announcement is available from the Company's website at www.europeanmet.com.

TECHNICAL GLOSSARY

The following is a summary of technical terms:

"ball and rod indices"	Indicies that provide an assessment of the energy required to grind one tonne of material in a ball or rod mill
"carbonate"	refers to a carbonate mineral such as calcite, CaCO3
"comminution"	The crushing and/or grinding of material to a smaller scale
"cut-off grade"	lowest grade of mineralised material considered economic, used in the calculation of Mineral Resources
"deposit"	coherent geological body such as a mineralised body
"exploration"	method by which ore deposits are evaluated
"flotation"	selectively separating hydrophobic materials from hydrophilic materials to upgrade the concentration of valuable minerals
"g/t"	gram per metric tonne
"grade"	relative quantity or the percentage of ore mineral or metal content in an ore body
"heavy liquid separation"	is based on the fact that different minerals have different densities. Thus, if a mixture of minerals with different densities can be placed in a liquid with an intermediate density, the grains with densities less than that of the liquid will float and grains with densities greater than the liquid will sink
"Indicated" or "Indicated Mineral Resource"	as defined in the JORC and SAMREC Codes, is that part of a Mineral Resource which has been sampled by drill holes, underground openings or other sampling procedures at locations that are too widely spaced to ensure continuity but close enough to give a reasonable indication of continuity and where geoscientific data are known with a reasonable degree of reliability. An Indicated Mineral Resource will be based on more data and therefore will be more reliable than an Inferred Mineral Resource estimate
"Inferred" or "Inferred Mineral Resource"	as defined in the JORC and SAMREC Codes, is that part of a Mineral Resource for which the tonnage and grade and mineral content can be estimated with a low level of confidence. It is inferred from the geological evidence and has assumed but not verified geological and/or grade continuity. It is based on information gathered through the appropriate techniques from locations such as outcrops, trenches, pits, working and drill holes which may be limited or of uncertain quality and reliability
"JORC Code"	Joint Ore Reserve Committee Code; the Committee is convened under the auspices of the Australasian Institute of Mining and Metallurgy
"kt"	thousand tonnes
"LCE"	the total equivalent amount of lithium carbonate (see explanation above entitled Explanation of Lithium Classification and Conversion Factors)
"LiOH"	lithium hydroxide monohydrate (LiOH.H2O), the commercial form of lithium hydroxide
"lithium"	a soft, silvery-white metallic element of the alkali group, the lightest of all metals
"lithium carbonate"	the lithium salt of carbonate with the formula Li2CO3
"magnetic separation"	is a process in which magnetically susceptible material is extracted from a mixture using a magnetic force
"metallurgical"	describing the science concerned with the production, purification and properties of metals and their applications
"Mineral Resource"	a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such a form that there are reasonable prospects for the eventual economic extraction; the location, quantity, grade geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge; mineral resources are sub-divided into Inferred, Indicated and Measured categories
"mineralisation"	process of formation and concentration of elements and their chemical compounds within a mass or body of rock
"Mt"	million tonnes
"optical microscopy"	the determination of minerals by observation through an optical microscope
"ppm"	parts per million
"recovery"	proportion of valuable material obtained in the processing of an ore, stated as a percentage of the material recovered compared with the total material present
"resources"	Measured: a mineral resource intersected and tested by drill holes, underground openings or other sampling procedures at locations which are spaced closely enough to confirm continuity and where geoscientific data are reliably known; a measured mineral resource estimate will be based on a substantial amount of reliable data, interpretation and evaluation which allows a clear determination to be made of shapes, sizes, densities and grades. Indicated: a mineral resource sampled by drill holes, underground openings or other sampling procedures at locations too widely spaced to ensure continuity but close enough to give a reasonable indication of continuity and where geoscientific data are known with a reasonable degree of reliability; an indicated resource will be based on more data, and therefore will be more reliable than an inferred resource estimate. Inferred: a mineral resource inferred from geoscientific evidence, underground openings or other sampling procedures where the lack of data is such that continuity cannot be predicted with confidence and where geoscientific data may not be known with a reasonable level of reliability
"SAGability"	testing material to investigate its performance in a semi-autonomous grinding mill
"spiral concentration"	a process that utilises the differential density of materials to concentrate valuable minerals
"stope"	underground excavation within the orebody where the main production takes place
"t"	a metric tonne
"tin"	A tetragonal mineral, rare; soft; malleable: bluish white, found chiefly in cassiterite, SnO2
"treatment"	Physical or chemical treatment to extract the valuable metals/minerals
"tungsten"	hard, brittle, white or grey metallic element. Chemical symbol, W; also known as wolfram
"W"	chemical symbol for tungsten

 

 

ADDITIONAL GEOLOGICAL TERMS

"apical"	relating to, or denoting an apex
"cassiterite"	A mineral, tin dioxide, SnO2. Ore of tin with specific gravity 7
"cupola"	A dome-shaped projection at the top of an igneous intrusion
"dip"	the true dip of a plane is the angle it makes with the horizontal plane
"granite"	coarse-grained intrusive igneous rock dominated by light-coloured minerals, consisting of about 50% orthoclase, 25% quartz and balance of plagioclase feldspars and ferromagnesian silicates
"greisen"	A pneumatolitically altered granitic rock composed largely of quartz, mica, and topaz. The mica is usually muscovite or lepidolite. Tourmaline, fluorite, rutile, cassiterite, and wolframite are common accessory minerals
"igneous"	said of a rock or mineral that solidified from molten or partly molten material, i.e., from a magma
"muscovite"	also known as potash mica; formula: KAl2(AlSi3O10)(F,OH)2.
"quartz"	a mineral composed of silicon dioxide, SiO2
"rhyolite"	An igneous, volcanic rock of felsic (silica rich) composition.  Typically >69% SiO2
"vein"	a tabular deposit of minerals occupying a fracture, in which particles may grow away from the walls towards the middle
"wolframite"	A mineral, (Fe,Mn)WO4; within the huebnerite-ferberite series
"zinnwaldite"	A mineral, KLiFeAl(AlSi3)O10 (F,OH)2; mica group; basal cleavage; pale violet, yellowish or greyish brown; in granites, pegmatites, and greisens

 

ENQUIRIES:

European Metals Holdings Limited Keith Coughlan, Managing Director     Kiran Morzaria, Non-Executive Director   Julia Beckett, Company Secretary	Tel: +61 (0) 419 996 333 Email: [email protected]   Tel: +44 (0) 20 7440 0647   Tel: +61 (0) 8 6245 2057 Email: [email protected]
Beaumont Cornish (Nomad & Broker) Michael Cornish Roland Cornish	Tel: +44 (0) 20 7628 3396 Email: [email protected]
Joint Broker Damon Health Erik Woolgar Shard Capital	Tel:  +44 (0) 20 7186 9950

 

The information contained within this announcement is considered to be inside information, for the purposes of Article 7 of EU Regulation 596/2014, prior to its release.  The person who arranged for the release of this announcement on behalf of the Company was Keith Coughlan, Managing Director.

 

JORC Code, 2012 Edition - Table 1

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Sampling techniques	·     Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. ·     Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. ·     Aspects of the determination of mineralisation that are Material to the Public Report. ·     In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.	·     Between 2014 and 2017, the Company commenced a core drilling program and collected samples from core splits in line with JORC Code guidelines.  ·     Sample intervals honour geological or visible mineralization boundaries and vary between 50cm and 2 m. Majority of samples are 1 m in length ·     The samples are half or quarter of core; the latter applied for large diameter core. ·     Between 1952 and 1989, the Cinovec deposit was sampled in two ways: in drill core and underground channel samples. ·     Channel samples, from drift ribs and faces, were collected during detailed exploration between 1952 and 1989 by Geoindustria n.p. and Rudne Doly n.p., both Czechoslovak State companies. Sample length was 1 m, channel 10x5cm, sample mass about 15kg. Up to 1966, samples were collected using hammer and chisel; from 1966 a small drill (Holman Hammer) was used. 14179 samples were collected and transported to a crushing facility. ·     Core and channel samples were crushed in two steps: to -5mm, then to -0.5mm. 100g splits were obtained and pulverized to -0.045mm for analysis. ·     In this case 4.3 kg of lithium concentrate sample was used from a stock previously derived from samples historically taken from various sites in the deposit. ·     The sample in this case was subjected to roasting after mixing with sodium sulphate, gypsum and limestone to a prescribed ratio, water leached, various steps of purification undertaken finally rendering a battery grade lithium hydroxide laboratory scale sample upon completion.
Drilling techniques	·     Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).	·     No additional drilling was undertaken.
Drill sample recovery	·     Method of recording and assessing core and chip sample recoveries and results assessed. ·     Measures taken to maximise sample recovery and ensure representative nature of the samples. ·     Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	·     No additional drilling was undertaken.
Logging	·     Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. ·     Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. ·     The total length and percentage of the relevant intersections logged.	·     No additional drilling or logging was undertaken.
Sub-sampling techniques and sample preparation	·     If core, whether cut or sawn and whether quarter, half or all core taken. ·     If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. ·     For all sample types, the nature, quality and appropriateness of the sample preparation technique. ·     Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. ·     Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. ·     Whether sample sizes are appropriate to the grain size of the material being sampled.	·     No additional drilling was undertaken.
Quality of assay data and laboratory tests	·     The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. ·     For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. ·     Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	Where applicable the following analytical techniques and standards were utilized in this testwork. ·     Selected samples were characterized by X-ray diffraction (XRD) analysis (Bruker, Diffractometer D8 ADVANCE with DAVINCI design) according to DIN 13925. The crystalline phases were identified by an expert using the JCPDS data base (International Centre for Diffraction Data). ·     The chemical composition was analyzed by X-ray fluorescence spectroscopy (XRF, S8 Tiger by Bruker AXS, S4 Pioneer by Bruker AXS) ·     According to DIN EN ISO 12677. XRF analysis was applied for all solid samples, except for analysis of Li and Rb, which were analyzed by ICP after Na2O2 fusion. ·     Moisture content was determined by drying the sample at 105°C in a drying oven according to EN ISO 787-2. ·     Loss on ignition was determined according to DIN EN ISO 12677 at a temperature of 1,025 °C in a muffle furnace. ·     The chemical composition of selected samples was analyzed by Inductively Coupled Plasma spectrometry (ICP, Varian Vista MPX) according to DIN EN ISO 11885 E22. ICP was applied for all liquid samples. ·     Lithium and Rubidium analysis by chemical digestion of the samples was carried out by sodium peroxide (Na2O2) fusion. Na2O2 was used to oxidize the sample that becomes soluble in a diluted acid solution. Lithium and rubidium analysis was performed by using inductively coupled plasma spectrometry (Varian, Vista MPX). ·     Particle size, morphology and structure of particles can be visualized by SEM providing valuable information for the interpretation of processing results (e.g. degree of sintering, crystallization). Samples were investigated with a Phenom XL scanning electron microscope with qualitative information on the elemental composition of selected particles determined by EDX. ·     An additional analytical tool in SEM is the detection of backscattered electrons (BSD). The intensity of backscattered electrons is proportional to the atomic number of the material, thus heavy elements in the sample appear bright while light elements are much less pronounced. ·     No geophysical data was collected.
Verification of sampling and assaying	·     The verification of significant intersections by either independent or alternative company personnel. ·     The use of twinned holes. ·     Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. ·     Discuss any adjustment to assay data.	·     No drilling or other sampling was undertaken ·     No twinned holes have been completed. ·     No adjustments or calibrations were made to any primary assay data collected for the purpose of reporting assay grades and mineralized intervals.
Location of data points	·     Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. ·     Specification of the grid system used. ·     Quality and adequacy of topographic control.	·     No additional drilling was undertaken.
Data spacing and distribution	·     Data spacing for reporting of Exploration Results. ·     Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. ·     Whether sample compositing has been applied.	·     No additional drilling was undertaken.
Orientation of data in relation to geological structure	·     Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. ·     If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	·     No additional drilling was undertaken.
Sample security	·     The measures taken to ensure sample security.	·     In the 2014-19 programs, only the Company's employees and contractors handled drill core and conducted sampling. The core was collected from the drill rig each day and transported in a company vehicle to the secure Company premises where it was logged and cut.  Company geologists supervised the process and logged/sampled the core.   The samples were transported by Company personnel in a Company vehicle to the ALS Global laboratory pick-up station. The remaining core is stored under lock and key.  Metallurgical samples are transported at times utilizing global carriers. ·     Historically, sample security was ensured by State norms applied to exploration.  The State norms were similar to currently accepted best practice and JORC guidelines for sample security.
Audits or reviews	·     The results of any audits or reviews of sampling techniques and data.	·     No external audits have been completed for this round of testwork.

 

Section 2 Reporting of Exploration Results

(Criteria listed in section 1 also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral tenement and land tenure status	·     Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. ·     The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	·     Cinovec exploration rights held under three licenses Cinovec (expires 30/07/2019), Cinovec 2 (expires 31/12/2020) and Cinovec 3 (expires 31/10/2021).100% owned, no native interests or environmental concerns. A State royalty applies metals production and is set as a fee in Czech crowns per unit of metal produced. ·     There are no known impediments to obtaining an Exploitation Permit for the defined resource.
Exploration done by other parties	·     Acknowledgment and appraisal of exploration by other parties.	·     There has been no acknowledgment or appraisal of exploration by other parties.
Geology	·     Deposit type, geological setting and style of mineralisation.	·     Cinovec is a granite-hosted tin-tungsten-lithium deposit. ·     Late Variscan age, post-orogenic granite intrusionTin and tungsten occur in oxide minerals (cassiterite and wolframite). Lithium occurs in zinwaldite, a Li-rich muscovite ·     Mineralization in a small granite cupola.  Vein and greisen type. Alteration is greisenisation, silicification.
Drill hole Information	·     A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o  easting and northing of the drill hole collar o  elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar o  dip and azimuth of the hole o  down hole length and interception depth o  hole length. ·     If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.	·     No additional drilling was undertaken.
Data aggregation methods	·     In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. ·     Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. ·     The assumptions used for any reporting of metal equivalent values should be clearly stated.	·     No additional drilling was undertaken.
Relationship between mineralisation widths and intercept lengths	·     These relationships are particularly important in the reporting of Exploration Results. ·     If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. ·     If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').	·     No additional drilling was undertaken.
Diagrams	·     Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.	·     No additional drilling was undertaken.
Balanced reporting	·     Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	·     Balanced reporting in historic reports guaranteed by norms and standards, verified in 1997, and 2012 by independent consultants. ·     The historic reporting was completed by several State institutions and cross validated.
Other substantive exploration data	·     Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	·     Data available: bulk density for all representative rock and ore types; (historic data + 92 measurements in 2016-17 from current core holes); petrographic and mineralogical studies, hydrological information, hardness, moisture content, fragmentation etc.
Further work	·     The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). ·     Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.	·     Grade verification sampling from underground or drilling from surface.  Historically-reported grades require modern validation in order to improve the resource classification. ·     The number and location of sampling sites will be determined from a 3D wireframe model and geostatistical considerations reflecting grade continuity.  ·     The geologic model will be used to determine if any infill drilling is required. ·     The deposit is open down-dip on the southern extension, and locally poorly constrained at its western and eastern extensions, where limited additional drilling might be required.  ·     No large scale drilling campaigns are required.