Source - RNS
RNS Number : 9267S
Europa Metals Ltd
15 March 2019
 

15 March 2019

 

Europa Metals Ltd

("Europa Metals", the "Company" or the "Group") (AIM / AltX: EUZ)

Results for the Half-Year Ended 31 December 2018

Europa Metals, the European lead-zinc explorer, is pleased to announce its unaudited results for the half year ended 31 December 2018 (the "Half-Year Report").

 

Please see below extracts from the Half Year Report, being the:

 

-     Directors' Report

-     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 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

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

T: +44 (0)20 3621 4120

 

Sasfin Capital Proprietary Limited (a member of the Sasfin group)

Sharon Owens
T (direct): +27 11 809 7762

 

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.

 

 

Directors' Report

The directors present their report on Europa Metals Ltd ("Europa Metals", the "Company" or, together with its controlled entities, the "Group") for the half-year from 1 July 2018 to 31 December 2018.

 

Directors

 

The names of the Company's directors in office during the half-year and until the date of this report are set out below. Directors were in office for the entire period unless otherwise stated.

 

Evan Kirby

Laurence Read

Myles Campion                      

Colin Bird                               

Daniel Smith                          

 

 

Review and results of operations

 

Operating Results

 

During the half-year from 1 July 2018 to 31 December 2018, the Group recorded a net loss after tax of AUD 1,534,312 (1 July 2017 to 31 December 2017: net loss of AUD 712,548).

 

Toral Lead-Zinc-Silver Project, Spain

 

The Company announced on 16 July 2018 that it had secured a combined Reverse Circulation ("RC") and Diamond drilling rig (the "Combination rig") for mobilisation to its wholly owned Toral lead-zinc-silver project located in the Province of Leόn, northern Spain ("Toral" or the "Toral Project"), during August 2018. The Combination rig and associated operating crew was supplied by Sondeos y Perforaciones Industriales de Bierzo SA and has been overseen by the Company's on-site exploration team. The Combination rig is one of only a few of its type in Spain and has been deployed on a series of recent, successful drilling programmes.

 

The Combination rig was successfully mobilised to site in late August 2018 to commence a Phase 1 drilling campaign. Drilling was undertaken to initially ascertain the potential continuation of the mineralised structure outside of the current defined JORC (2012) resource area at Toral. With a significant inferred resource estimate already established for the main Toral project area, the extension drilling to the East sought to identify the presence of further mineralisation/hosting structures. On 28 August 2018, the Company also announced that it had successfully completed the relogging of certain priority historical drill core from Toral stored at the National Litoteca in Andalucía, Spain.

 

On 20 September 2018, the Company announced that the re-logging of the historical drill core held at the National Litoteca had resulted in significantly higher bulk density measurements than those used for the maiden JORC (2012) resource estimate completed by Addison Mining Services Limited ("AMS") between November 2017 and January 2018, as announced by the Company on 6 February 2018. The increase in bulk density values applied to samples and their spatial distribution resulted in a material change to the estimation of the resource. Ore tonnages are calculated by volume estimated from solid models developed from mapping and drilling information multiplied by rock density.

  

On 4 October 2018, the Company announced that, further to its announcement of 28 August 2018, all of the planned Phase I RC drilling at the Toral Project had been completed with samples being sent to external laboratories for independent assay. As noted above, the RC extension drilling was designed to identify new areas of mineralisation stepping out from the existing defined JORC (2012) resource area. A diamond drilling programme subsequently commenced targeting key areas situated within the existing resource area.

 

The objective of the Phase II diamond infill drilling programme was to increase and enhance the Company's understanding and confidence in the existing resource in areas that currently contain Inferred mineralisation as defined under the JORC (2012) code. On 20 December 2018, the Company announced the results of the Phase II diamond drilling programme conducted at Toral.

 

The diamond drilling provided the following information for Europa Metals' geological team:

confirmation of block model grade and thickness;

progress with regard to drilling strategy to remove 'gaps' within the known resource (all within 300m of topographic surface); and

further information on geotechnical characteristics and structural controls.

Significant results from the diamond drilling included:

Drill hole TOD-018 which returned 3.8m @ 5.87% Zn Equivalent (Zn, Pb); and

reportable copper mineralisation intercepted within 280 metres of surface (drill hole TOD-020) - further investigation ongoing following 0.68% Cu @ 3m, including 1m @ 1.34% Cu.

 

In 2019, subject to funding, the Company plans to complete an infill drilling campaign to target the high-grade core of the Toral deposit, with the aim of increasing confidence in the resource estimate to the JORC (2012) Indicated category, which will be the subject of further investigation as part of the planned pre-feasibility and feasibility studies in due course.  

 

On 31 October 2018, the Company announced that it had relinquished all rights to the permits the Group previously held in respect of its Lago lead-zinc exploration project (Lago II 6.056 and Lago III 6.058) in the province of Galicia, Spain. Whilst the Company continues to believe that the area is highly prospective for lead-zinc, both the size and location of the Lago permit areas did not justify and support incurring further maintenance and exploration expenditure. 

 

Scoping Study

 

On 10 December 2018, the Company announced the results of an independent scoping study completed by AMS in accordance with JORC (2012) for the Toral Project (the "Scoping Study" or "Study"). The findings of the Study were positive with a recommendation that the Toral Project should be progressed towards a feasibility study to determine full economics, technical and environmental parameters for an underground mining operation focused on near-term recovery of the higher-grade mineralised zones.

 

The Scoping Study considered three conceptual underground mining development and production scenarios. The conceptual scenario selected (being Conceptual Scenario 2a) progresses decline access ramp with a high grade focus; a proposed Mechanised Cut and Fill (MCAF) mining method; entry to the mine via a principal decline reaching various levels; and a series of internal mining inclined ramps constructed to access levels.

  

Further key elements of the Scoping Study include:

4x4 metre mine standard development size

Mining method and production schedule over estimated mine life

Efficient mining block sequence identified

Identification of optimum plant locations (see Figure 1)

Key Recommendations: Infill drilling campaign to convert resources to the Indicated category (JORC 2012), metallurgical and geotechnical test work and progression to a full feasibility study.

 

Figure 1: Conceptual Plant Layout for Chantin and Peon Sites, and conceptual tailings sites

http://www.rns-pdf.londonstockexchange.com/rns/9267S_1-2019-3-14.pdf

 

Economic Analysis  

Europa Metals commissioned AMS to undertake a financial modelling exercise for the Toral Project, based on a number of different processing scenarios and mining methods. The results of this exercise, as well as the overall positive outcomes of the Scoping Study, support the commencement of a full feasibility study. However, since 100% of the Mineral Resources at Toral are currently in the Inferred resource category, in accordance with Section 8.5 of ASX Guidance Note 31, the Company was not able to publish a production target or forecast financial information in December 2018.

 

Following the Company's removal from the official list of the ASX Limited ("ASX") ("Official List") on 8 March 2019, the Company announced the economics of the Scoping Study on 11 March 2019.

 

Updated Mineral Resource

 

As part of the Scoping Study's licence tenure and permitting investigative work and verification checks, an identified permit location shift prompted the requirement to revise the previously reported mineral resource estimate for the Toral Project within Europa Metals' licence 15.199 and update the input mineral resource block model used for the purposes of the Scoping Study.

 

The issue arose due to a legacy discrepancy between the historical and current coordinate systems used in the mining and permitting industry in Spain. The Mineral Resource estimate was consequently updated due to a coordinate discrepancy and, as such, the block model was also updated to reflect this change. The reduction in the reported resource through the tenement shift in no way affected the Scoping Study and economic potential of the project.

 

The portion of the deposit affected by the boundary issue, containing approximately 3 million tonnes of mineralisation, is in the north-western extension of the deposit, a very narrow area not currently considered to be of interest in terms of future mining. The adjustment to the input block model in no way affects the technical and economic findings of the Scoping Study at this stage.

 

Under Spanish mining law the area concerned can be secured by Europa Metals at the point the Company converts its exploration licence to a mining licence, as it cannot be claimed by third parties, except for the very far western extension, due to the presence of a limestone quarry that operates at surface. It is envisaged that the quarry will attract little interest due to the elements on surface including a national road and a river; accordingly, the quarry area can only be mined by underground methods for high value minerals, if determined economically viable. 

 

Apart from the area under the limestone quarry, which will require direct negotiation with its owner, the other areas are subject to a defined procedure set out under Spanish mining law and it is currently anticipated that such areas will be incorporated into Europa Metals' Toral property upon the future grant of a mining licence. The Board believes that there are no competitors in relation to securing this further acreage.

 

The above mentioned reduction in the licence area led to a temporary loss of approximately 3 million tonnes of resource as set out in Table 1 below.

 

Table 1: Comparison Between the September 2018 and December 2018 Reduced Licence Area

 

4% Zn Eq (PbAg)%

Tonnes (Millions)

Density g/cm3

Zn Eq (Pb) %

Zn Eq (PbAg)%

Zn %

Pb %

Ag g/t

Contained Zn Tonnes (000s)

Contained Pb Tonnes (000s)

Ag Troy Oz (Millions)

September 2018 Resource

19

2.8

6.9

7.4

3.9

3.1

24

720

570

14

December 2018 Resource

16

2.8

7

7.5

3.9

3.1

24

640

510

13

 

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 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 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 Competent person under the AIM Rules for Companies.

 

Corporate

On 30 July 2018, the Company announced that 205,949,134 unlisted options exercisable at £0.003 per share on or before 29 July 2018, had lapsed unexercised.

 

On 10 August 2018, the Company announced that it had completed a fundraising of £563,516 (approximately A$0.98m) before expenses through a placing arranged by the Company's broker, Turner Pope Investments (TPI) Limited ("Turner Pope"), of 727,118,650 new ordinary shares of no par value each in the capital of the Company (the "Placing Shares") at a price of 0.0775 pence per new ordinary share (the "Placing"). The Placing Shares were issued to certain new and existing investors utilising the remainder of the Company's existing placement capacity under ASX Listing Rule 7.1.

 

The net proceeds from the Placing were utilised towards funding the Phase II work programme at the Toral Project, as well as providing additional general working capital for the Group.

 

On 24 September 2018, the Company announced a change to its registered office and principal place of business to c/o Minerva Corporate, Level 8, 99 St Georges Terrace, Perth WA, 6000.

 

On 31 October 2018, the Company announced that Turner Pope had assumed the role of sole broker to the Company with immediate effect.

 

Events subsequent to the reporting date

 

On 25 January 2019, the Company announced that it had submitted a formal application to the ASX requesting the removal of the Company from the Official List pursuant to ASX Listing Rule 17.11, which became effective on 8 March 2019. In addition, the Company successfully applied to move from the Main Board of the Johannesburg Stock Exchange ("JSE") to the AltX. The Company's securities commenced trading on the AltX with effect from 1 March 2019. Accordingly, Europa Metals' primary listing became the AIM market operated by London Stock Exchange plc ("AIM") with a secondary listing on the AltX.

 

On 11 March 2019, the Company announced the economics of the Scoping Study.

 

No other matters or circumstances have occurred subsequent to the reporting date that would have a material impact on the consolidated financial statements.

 

 

 

Consolidated Statement of Profit or Loss and Other Comprehensive Income for the half-year ended 31 December 2018

 

 

 

6 months to

31 December 2018

6 months to

31 December 2017

 

 

AUD

AUD

 

 

 

 

Revenue from continuing operations

 

 

 

Revenue

 

32

8

Other Income

 

7,187

71,294

 

 

7,219

71,302

Exploration expenditure

 

(958,396)

(180,019)

Foreign exchange gain

 

4,369

25,787

Other expenses

 

(587,504)

(629,618)

Loss before income tax

 

(1,534,312)

(712,548)

Income tax (expense)/benefit

 

-

-

 

 

 

 

Net loss after income tax

 

(1,534,312)

(712,548)

 

 

 

 

Other comprehensive income

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

Net exchange gain / (loss) on translation of foreign operation

58,707

71,813

Other comprehensive (loss) for the period, net of tax

 

58,707

71,813

 

 

 

 

Total comprehensive (loss) for the period

 

(1,475,605)

(640,735)

 

 

 

 

 

 

 

 

Net (loss) for the period attributable to shareholders of the Company:

 

(1,534,312)

(712,548)

 

 

(1,534,312)

(712,548)

 

 

 

 

Total comprehensive (loss) for the period attributable to shareholders of the Company:

 

(1,475,605)

(640,735)

 

 

(1,475,605)

(640,735)

 

 

 

 

(Loss) per share attributable to the ordinary equity holders of the Company

 

Loss per share

 

Cents per share

Cents per share

 

 

 

 

- basic (loss) per share

 

(0.028)

(0.026)

- diluted (loss) per share

 

 

(0.028)

 

(0.026)

 

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes

 

Consolidated Statement of Financial Position as at 31 December 2018

 

 

 

31 December

30 June

 

 

2018

2018

 

 

AUD

AUD

Current Assets

 

 

 

Cash and cash equivalents

 

361,615

1,272,327

Trade and other receivables

 

198,536

77,510

Total Current Assets

 

560,151

1,349,837

 

 

 

 

Non-current Assets

 

 

 

Plant and equipment

 

67,347

20,192

Capitalised exploration

 

1,395,398

1,344,013

Total Non-current Assets

 

1,462,745

1,364,205

 

 

 

 

Total Assets

 

2,022,896

2,714,042

 

 

 

 

Current Liabilities

 

 

 

Trade and other payables

 

85,944

229,671

Total Current Liabilities

 

85,944

229,671

 

 

 

 

Total Liabilities

 

85,944

229,671

 

 

 

 

NET ASSETS

 

1,936,952

2,484,371

 

 

 

 

Equity

 

 

 

Contributed equity

 

39,007,685

38,079,499

Reserves

 

2,830,689

2,771,982

Accumulated losses

 

(39,901,422)

(38,367,110)

TOTAL EQUITY

 

1,936,952

2,484,371

 

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes

 

Consolidated Statement of Changes in Equity for the half-year ended 31 December 2018

 

 

 

 

Employee

 

 

 

 

 

Contributed

Accumulated

Share
Incentive

Option

Foreign Exchange

Total

 

Equity

Losses

Reserve

Reserve

Reserve

Equity

 

AUD

AUD

AUD

AUD

AUD

AUD

At 1 July 2017

35,931,732

(36,483,664)

491,577

1,609,070

21,678

1,570,393

(Loss) for the period

-

(712,548)

-

-

-

(712,548)

Other comprehensive income (net of tax)

-

-

-

-

71,813

71,813

Total comprehensive loss (net of tax)

-

(712,548)

-

-

71,813

(640,735)

Transaction with owners in their capacity as owners

 

 

 

 

 

 

Shares issued net of transaction costs

596,104

-

-

-

-

596,104

At 31 December 2017

36,527,836

(37,196,212)

491,577

1,609,070

93,491

1,525,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 July 2018

38,079,499

(38,367,110)

491,577

2,028,253

252,152

2,484,371

(Loss) for the period

-

(1,534,312)

-

-

-

(1,534,312)

Other comprehensive income (net of tax)

-

-

-

-

58,707

58,707

Total comprehensive loss (net of tax)

-

(1,534,312)

-

-

58,707

(1,475,605)

Transaction with owners in their capacity as owners

 

 

 

 

 

 

Shares issued net of transaction costs

928,186

-

-

-

-

928,186

At 31 December 2018

39,007,685

(39,901,422)

491,577

2,028,253

310,859

1,936,952

                   

 

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes

 

Consolidated Statement of Cash Flows for the half-year ended 31 December 2018

 

 

 

6 months to

31 December 2018

6 months to 31 December 2017

 

 

AUD

AUD

Cash flows from operating activities

 

 

 

Interest received

 

286

8

Payments to suppliers and employees

 

(814,514)

(598,894)

Payment for exploration and evaluation costs

 

(1,034,671)

(122,484)

Net cash flows used in operating activities

 

(1,848,899)

(721,370)

 

 

 

 

Cash flows from investing activities

 

 

 

Payments for plant and equipment

 

-

(22,186)

Net cash flows from / (used in) investing activities

 

-

(22,186)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from issue of shares

 

987,491

638,777

Costs of capital raising

 

(59,305)

(42,672)

Net cash flows from financing activities

 

928,186

596,105

Net increase / (decrease) in cash and cash equivalents

 

(920,713)

(147,452)

Cash and cash equivalents at beginning of period

 

1,272,327

503,891

Effect of foreign exchange on cash and cash equivalents

 

10,001

7,965

Cash and cash equivalents at end of period

 

361,615

364,404

 

 

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
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