Enlarged Share Capital Admitted to Trading on AIM

Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector: Mining

29 October 2020

Zinnwald Lithium plc ("Zinnwald Lithium" or the "Company")

Enlarged Share Capital Admitted to Trading on AIM

Zinnwald Lithium plc, the German focused lithium development company, is pleased to announce that, following the completion of the acquisition of a 50% interest in the Zinnwald Lithium Project ('Zinnwald Lithium Project' or the 'Project') in Germany (see Result of General Meeting announcement dated 26 October 2020), the Company's enlarged share capital was today admitted to trading on AIM at 8am ("Admission") under the Company's new name Zinnwald Lithium plc and code ZNWD.L. The Company's ISIN and SEDOL remain unchanged. 

Following Admission, the Company now has 204,455,957 Ordinary Shares in issue, each with one voting right. There are no shares held in treasury. Therefore, the Company's total number of Ordinary Shares and voting rights is 204,455,957. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Shareholders should note that their shareholdings will be unaffected by the change of name and existing share certificates should be retained as they will remain valid for all purposes and no new share certificates will be issued.  The Company has also launched a new website www.zinnwaldlithium.com where the information required pursuant to AIM Rule 26 is available.

OVERVIEW

·    Completed acquisition of 50% interest in late stage high return Zinnwald Lithium Project: €428m pre-tax NPV (8% discount rate); Pre-Tax IRR 27.4%; 46% EBITDA margin (Feasibility Study)

·    Plan to advance the Project towards becoming a supplier of high value lithium products to Europe's rapidly growing EV (electric vehicle) and energy storage markets

·    Admission of new shares to trading on AIM having raised £3.75 million (before expenses) via a Placing

Zinnwald Lithium plc CEO, Anton du Plessis, said, "Today marks the start of a new phase in the Company's history as we refocus our strategy to concentrate on becoming an important supplier of battery-grade lithium products to Europe's rapidly growing EV and energy storage market.

"Demand for lithium is anticipated to grow strongly as the shift to EVs gains momentum. Local supply is becoming increasingly important with the EU recently designating lithium as a critical raw material. In this context, we believe the Zinnwald Lithium Project is a compelling opportunity: it is at an advanced stage with a Feasibility Study that has demonstrated its economic viability and has a mining licence in place; it is ideally located in Germany, which is host to both a major automotive industry and several major chemical producers; and it provides the opportunity and flexibility to produce several battery-grade lithium products. 

"I would like to thank both existing and new investors for their support as we start on this new, exciting journey and look forward to updating the market on our progress." 

Further Information

The same definitions apply throughout this announcement, unless the context requires otherwise, as applied in the Admission Document, published on 8 October 2020, and which is available on the Company's website, www.zinnwaldlithium.com.

Through its 50% interest in Deutsche Lithium GmbH ("Deutsche Lithium"), Zinnwald Lithium plc is focused on advancing its key asset, the late stage, integrated Zinnwald Lithium Project ('the Project') in Germany, to production to supply a suite of value-added downstream battery-grade lithium products to Europe's rapidly growing EV and energy storage markets.

Covering 256.5 hectares, the Project is located in southeast Germany, some 35 km from Dresden and adjacent to the border with the Czech Republic.  It is in a granite hosted Sn/W/Li belt that has been mined historically for tin, tungsten, and lithium at different times over the past 300 years. With an abundant supply of fluorspar/hydrofluoric acid available in the immediate vicinity, the focus has been on LiF (Lithium Fluoride), which is used in the lithium-ion battery supply chain. LiF is a high value downstream lithium product and one of the two key components in the manufacturing process of LiPF6, which is the most important conducting salt in lithium electrolytes and serves as the "shuttle" in the lithium battery electrolyte which "ships" the lithium ion between the cathode and the anode. Approximately 95 per cent. of all lithium battery electrolytes use LiPF6, and the percentage used in each cathode is increasing in some of the newer battery types. The strategic location of the Project allows access to the German automotive and downstream chemical industries.

While the NI 43-101 Feasibility Study for the Project is based solely on the production of LiF, there is the possibility of also producing battery-grade lithium carbonate directly from the lithium mica concentrate with only minimal modifications to the chemical plant circuits. Test work is being undertaken to determine if the same applies to possible lithium hydroxide production.

The NI 43-101 Feasibility Study for the Project (May 2019) confirmed the positive economics and favourable operating costs for the production of 5,112 tpa (~7,285 tpa LCE) of battery grade LiF. With a long-life project of 30 years, the Feasibility Study estimated a pre-tax project NPV, for 100% of the Project, of €428 million (8 per cent. discount rate); an IRR of 27.4%; and favourable LOM operating costs resulting in a 46% EBITDA operating profit margin.

Notably, the 30-year Feasibility Study mine plan equates to the extraction of less than 50% of the currently identified resource.

·    Measured plus Indicated Mineral Resource estimate containing 35.51 Mt at a grade of 3,519 ppm containing 124,974 t Li at cut-off grade of 2,500 ppm Li

·    Represents approximately 665,000 tonnes of lithium carbonate equivalent ('LCE'), comprising approximately 357,500 tonnes of LCE in Measured Resources and approximately 307,500 tonnes of LCE in Indicated Resources

·    Estimated Inferred Mineral Resources of 4.87 Mt at a grade of 3,549 ppm containing 17,266 t Li metal (approximately 92,000 tonnes LCE)

In addition to the mining licence in relation to the Project, Deutsche Lithium holds two other exploration licences, which may have the potential to increase the Project's resource base and life.

The Project has a capital cost estimate of approximately €160 million, which includes mining, processing plant, infrastructure, tailings management and general administration costs and government grants as well as the requisite contingencies.

It is anticipated that in addition to returns generated by the sale of LiF, the Project also has the potential to produce up to 32,000 tpa of potassium sulphate ('SOP', 'K2SO4') for sale to the European fertiliser industry. Further, it is expected that a portion of the mined tailings may be sold for use as an aggregate filler to local building companies.

The Company, working with the management team at Deutsche Lithium, is now focused on advancing the Project in several areas:

·    Identification of and negotiation with off-take partners that could include battery manufacturers, chemical producers or commodity traders.

·    Identification and negotiation with potential financing partners that could include banks, national and trans-national development organisations.

·    Expansion of the scope of the NI 43-101 Feasibility Study to assess the commercial viability of producing a broader range of lithium compounds, specifically lithium carbonate and lithium hydroxide.

·    Front end engineering design work.

·    Finalisation of the selection of the optimal chemical processing site location.

·    Completion of the final steps in the permitting process for the construction and operation of the mine.

Part of the Company's strategy is to gain operational control of Deutsche Lithium; the other 50% owner of Deutsche Lithium is SolarWorld AG, a company which is in administration and cannot transfer its share in Deutsche Lithium without first offering it to the Company (and vice versa). The Zinnwald Lithium board and management team intends to engage with the administrator of SolarWorld AG to advance these discussions.

Director appointment

As set out in the Admission Document and the Company's announcement on 8 October 2020, Peter Secker has now been appointed to the Board as a Non Executive Director with immediate effect.

Options

As set out in the Admission Document, each of Jeremy Martin (Non Executive Chairman) and Graham Brown (Non Executive Director) has been granted 100,000 Options with an exercise price of 5 pence. The Options lapse on 31 December 2022.  Following the grant of these Options, the Company has a total of 3,350,000 options to acquire Ordinary Shares outstanding, representing 1.6 per cent. of the Company's enlarged issued share capital.

*ENDS*

 For further information go to www.zinnwaldlithium.com or contact:

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