Half-year Report

Europa Metals Ltd

28 March 2024

 

28 March 2024

Europa Metals Ltd

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

Results for the Half-Year Ended 31 December 2023

Europa Metals, the European focused lead, zinc and silver developer, is pleased to announce its unaudited results for the half-year ended 31 December 2023 (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: [phone]

Myles Campion, Executive Chairman and acting CEO (UK)

T: [phone]

Beaumont Cornish (Nominated Adviser/Broker)

James Biddle

T: [phone]

Questco Corporate Advisory Proprietary Limited (JSE Sponsor)

Danielle Christodoulou

T: [phone]

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:

Review and results of operations

Europa Metals is a European focused lead, zinc and silver developer. 

Operating Results

For the half-year from 1 July 2023 to 31 December 2023, the Group recorded a net loss after tax of A$248,761 (1 July 2022 to 31 December 2022: net loss of A$1,220,449).

The Toral Project is situated in northwest Spain in a world class mining jurisdiction which provides the opportunity to create new mines within well-established environmental and mining frameworks and with access to first class power and transport infrastructure. Toral represents a limestone hosted, structurally controlled deposit with the Pb, Zn, Ag mineralisation situated within the limestone close to the boundary between footwall slates and hanging wall limestones and dolomites. The mineralisation occurs as semi-massive vein, breccia and carbonate replacement styles of mineralisation.

The Toral deposit currently has a JORC (2012) compliant indicated mineral resource estimate of approximately 7Mt @ 8.1% Zn Equivalent (including Pb credits), 5% Zn, 3.7% Pb and 29g/t Ag, containing approximately 349,000 tonnes of zinc, 260,000 tonnes of lead and 6.6 million ounces of silver. This is contained within a total mineral resource of 20Mt @ 6.8% Zn Equivalent (including Pb credits), 4.4% Zn, 2.8% Pb and 23 g/t Ag.

On November 23 2022, Europa Metals Ltd entered into a definitive option agreement (the "Toral Definitive Agreement") with Denarius Metals Corp. ("Denarius") pursuant to which Europa has granted two options to Denarius to acquire up to an 80% ownership interest in Europa Metals Iberia S.L. ("EMI"), a wholly-owned Spanish subsidiary of Europa which holds the Toral Zn-Pb-Ag Project. 

Pursuant to the Toral Definitive Agreement, Denarius has been granted a First Option, exercisable until November 22, 2025 (subject to a 90-day extension in certain circumstances), to subscribe for a 51% equity interest in EMI by:

(i)         spending, as operator, a total of USD$4,000,000 on the Toral Project over the three-year period,

(ii)         completing a preliminary economic assessment, and

(iii)        completing and submitting a mining license application in respect of the Toral Project to the local            mining authority by July 31, 2023.

Mining Licence Application

Formal application for a mining licence has been completed in October 2023 over the Toral Pb, Zn & Ag project. All necessary studies have now been completed and lodged with the relevant authorities and departments within the Castille and Leon regional government.  

Highlights:

·      Submission to the "Junta of Castilla and Leon" completed.

·      All necessary documentation covering the exploitation, restoration and environmental impact study was submitted.

·      The submission envisages a life of mine of 15 years, mining on average 700,000t of ore per year from underground.

·      Including pre-production and closure plans, Toral's 18 year operations will create over 360 direct local employment opportunities and approximately 1,400 indirect jobs in the region.

·      This submission has been based on the deposit whose technical, economic and environmental feasibility is in accordance with the laws and regulations of the region of Castilla y Leon.

·      Such project assessment will be formally reported on in the expected preliminary economic assessment in accordance with the Canadian Institute of Mining Metallurgy and Petroleum ("CIM") Definition Standards incorporated by reference in National Instrument 43-101 expected to be prepared in 2024.

Exploitation Plan

Due to the subvertical geometry of the Toral deposit and its combination of depth and thickness, underground mining is considered to be the most technically, economically, and environmentally viable development option.

Figure 1 General on surface facilities layout distribution

The basis for the development plan utilised the existing JORC resource from November 2022; since the beginning of 2023 the Company's Spanish engineering group, Mining Sense, has applied many factors to this Resource such as commodity pricing, base load power costs, dilution factors and trade-off studies with the objective of reviewing various development scenarios. Based on the work carried out, it was determined that the extension, volume and ore grades have been duly estimated to define a mineable deposit whose technical, economic and environmental feasibility is supported by the documentation and in accordance with the laws and regulations of the region of Castille y Leon. Such project assessment will be formally reported on in the expected preliminary economic assessment to national Instrument standards 43-101 expected to be published in 2024.

Drilling

On the 4^th August 2023, Europa Metals was pleased to announce the latest assay results from its ongoing validation and infill diamond drilling programme, being conducted by Explomin Perforaciones UE S.L. ("Explomin"), at the Company's 100% owned Toral Pb, Zn & Ag project ("Toral" or the "Toral Project") in northwest Spain. This drilling programme forms part of the 2023 exploration campaign agreed between the Company and Denarius Metals Corp (TSXV:DSLV; OTCQX: DNSRF) ("Denarius") pursuant to the definitive option agreement dated 22 November 2022, further details of which are set out in the Company's announcement of 23 November 2022.

In addition, detailed environmental studies are now nearing completion which are required to finalise the formal submission of the Company's mining licence application to the Mines Department of Castilla y León.

Highlights:

·      Assays received in respect of seven drill holes at Toral each reporting significant mineralisation

·      Significant intersection from drillhole TOD-044 of 7.95m@4.46% ZnEq(PbAg)*, including:

o  4.25m@6.17% ZnEq(PbAg)*; and

o  1.55m@11.40% ZnEq(PbAg)*

·      Significant intersection from drillhole TOD-045 of 4.95m@22.71% ZnEq(PbAg)*

·      Significant intersection from drillhole TOD-046 of 1.50m@11.64% ZnEq(PbAg)*, including:

o  1.00m@15.84% ZnEq(PbAg)*

·      Two significant intersections from drillhole TOD-047 of 0.6m@18.34% ZnEq(PbAg)* and 2.4m@3.72% ZnEq(PbAg)*

·      Significant intersections from drillhole TOD-048 of 4.7m@6.68% ZnEq(PbAg)*, including:

o  1.65m@14.41% ZnEq(PbAg)*

·      A further significant intersection from drillhole TOD-048 of 6.65m@8.12% ZnEq(PbAg)*, including:

o  3.80m@12.58% ZnEq(PbAg)*

·      Significant intersection from drillhole TOD-049 of 5.00m@6.91% ZnEq(PbAg)*, including:

o  1.25m@20.93% ZnEq(PbAg)*

·      Significant intersections from drillhole TOD-050 of 3.90m@10.30% ZnEq(PbAg)*, including:

o  1.45m@20.69% ZnEq(PbAg)*

·      A further significant intersection from drillhole TOD-050 of 2.4m@4.98% ZnEq(PbAg)*

·      Holes TOD-045 and TOD-046 have both been completed and reliability of the assay results received re-confirmed:

o  High values of silver were identified in one of the holes and in line with the Company's standard operating procedures (SOP), we re-submitted the sample for re-testing to confirm its veracity and also confirmed the accuracy of results for control samples

·      All holes to date have been successful in intersecting mineralisation adjacent to an existing, previously reported, high grade intersection within the project's Indicated Resource block

·      Hole TOD-051 is currently nearing completion and comprises the final drillhole for this campaign

·      Detailed environmental work is nearing completion in connection with the Company's forthcoming mining licence application ("MLA") for Toral.

Additional information

The current drilling campaign for a total of up to 7,000m, is focused on a combination of confirmatory and infill drilling within the project's known indicated resource area outlined to date, of approximately 7Mt @ 8.1% Zn Equivalent (including Pb credits), 5% Zn, 3.7% Pb and 29g/t Ag.

Drilling results

The drilling parameters for the assay results reported for each hole are presented in the table below:

HOLE_ID	EASTING	NORTHING	ELEVATION (m)	LENGTH (m)	COOR_SYS
TOD-044	681197	4710037	531.65	509	ETRS89utm29
TOD-045	681412	4710025	542.29	610.3	ETRS89utm29
TOD-046	681684	4709858	660.80	866.5	ETRS89utm29
TOD-047	681686	4709856	660.88	460.6	ETRS89utm29
TOD-048	681408	4710024	542.29	529	ETRS89utm29
TOD-049	681685	4709857	660.80	763	ETRS89utm29
TOD-050	681916	4709571	634.10	701.3	ETRS89utm29

All holes were drilled to PQ-HQ-NQ diameter, with half of the core being sent for independent analysis at ALS Laboratories. The assay results received are set out in the table below:

Hole ID	From	To	Interval (m)	Zn_%	Pb_%	Ag_ppm	Cu_%	ZnEq(PbAg)%*
TOD-044	490.85	498.80	7.95	2.56	1.73	14.65	0.04	4.46
TOD-044 (including)	490.85	495.10	4.25	3.93	2.06	16.79	0.04	6.17
TOD-044 (including)	492.65	494.20	1.55	8.35	2.76	24.31	0.05	11.40
TOD-045	592.00	596.95	4.95	7.31	12.77	160.52	0.10	22.71
TOD-046	845.50	847.00	1.50	8.30	3.45	12.80	0.04	11.64
TOD-046 (including)	845.50	846.50	1.00	11.08	4.91	18.75	0.06	15.84
TOD-047	442.00	442.60	0.60	15.20	3.30	10.50	0.17	18.34
TOD-047	453.10	455.50	2.40	1.61	1.57	27.69	0.20	3.72
TOD-048	505.25	509.95	4.70	3.53	2.81	26.34	0.31	6.68
TOD-048 (including)	508.30	509.95	1.65	7.94	5.78	53.95	0.51	14.41
TOD-048	513.05	519.70	6.65	4.01	2.75	63.60	0.31	8.12
TOD-048 (including)	515.90	519.70	3.80	6.35	4.14	97.92	0.44	12.58
TOD-049	745.00	750.00	5.00	1.17	6.14	15.63	0.07	6.91
TOD-049 (including)	745.85	747.10	1.25	2.01	20.45	43.96	0.23	20.93
TOD-050	675.00	678.90	3.90	2.24	8.05	40.24	0.03	10.30
TOD-050 (including)	677.45	678.9	1.45	5.76	14.39	91.04	0.07	20.69
TOD-050	680.10	682.50	2.40	1.71	2.67	35.44	0.01	4.98

* - ZnEq(PbAg)% is the calculated Zn equivalent incorporating lead and silver credits; (ZnEq(PbAg)% = Zn + Pb*0.926 + Ag*0.019). 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$2,680/t, Pb price of US$2,100/t and Ag price of US$16.2/oz. Significant ZnEq intercepts were generated using a 1% ZnEq trigger value, minimum width of 1m, maximum consecutive waste interval of 1m and minimum average ZnEq grade of >1%.

Image 1: Hole positions

Drilling operations remain ongoing, in line with the Company's objective set out above, and further assay results will be announced once processed and received.

The Company had been awaiting re-assays and re-confirmation of the results for several samples, sent to the laboratory over the past several months, prior to releasing this announcement. In particular, one of the holes reported an abnormally high silver value (hole TOD-045, average grade of 160.52 Ag g/t) and as part of the Company's standard operating procedures (SOP) when we receive abnormally high results for either zinc, lead or silver, we re-submit the relevant sample for re-testing in order to confirm its veracity. We have now confirmed this value.

In addition, as part of our SOP we regularly insert control samples into the batches that are submitted to the laboratory, the results of which form part of our statistical analysis to confirm the reliability and consistency of the results received. We have now received confirmation of these results over several holes and can confirm their accuracy.

Corporate

Issue of shares to directors

In December 2023, the Company issued 3,500,000 new Ordinary Shares to two directors of the Company following the conversion of performance rights. The relevant performance milestone conditions for the performance rights were achieved during the course of the year. Refer to the RNS of 24 January 2023 for further details.

Change of Nomad and Broker

On 9 October 2023, the Company advised of the appointment of Beaumont Cornish Limited as Nomad and Broker.

Shareholder Meetings

On 30 November 2023, 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

No 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

28 March 2024

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the half-year ended 31 December 2023

		6 months to 31 December 2023	6 months to 31 December 2022
	Note	$	$
Revenue from continuing operations
Other Income	2	277,071	177,279
		277,071	177,279
Exploration expenditure		(9,315)	(853,355)
Foreign exchange (loss)/gain		(10,097)	(7,553)
Other expenses	2	(506,420)	(536,820)
Loss before income tax		(248,761)	(1,220,449)
Income tax (expense)/benefit		-	-
Net loss after income tax		(248,761)	(1,220,449)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Net exchange (loss)/gain on translation of foreign operation		-	34,859
Other comprehensive (loss)/profit for the period, net of tax		-	34,859
Total comprehensive loss for the period		(248,761)	(1,185,590)
Net (loss) for the period attributable to shareholders of the Company:		(248,761)	(1,220,449)
		(248,761)	(1,220,449)
Total comprehensive (loss) for the period attributable to shareholders of the Company:		(248,761)	(1,185,590)
		(248,761)	(1,185,590)

Loss per share		Cents per share	Cents per share
- basic (loss) per share		(0.26)	(1.48)
- diluted (loss) per share		(0.26)	(1.48)

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 2023

		31 December	30 June
		2023	2023
	Note	$	$
Current Assets
Cash and short-term deposits		488,964	653,990
Trade and other receivables	3	13,481	23,179
Total Current Assets		502,445	677,169
Total Assets		502,445	677,169
Current Liabilities
Trade and other payables		112,451	118,902
Total Current Liabilities		112,451	118,902
Total Liabilities		112,451	118,902
NET ASSETS		389,994	558,267
Equity
Contributed equity	6	49,562,236	49,391,945
Accumulated losses		(52,472,831)	(52,224,070)
Reserves		3,300,589	3,390,392
TOTAL EQUITY		389,994	558,267

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 2023

			Employee
	Issued	Accumulated	Share Incentive	Option	Foreign Exchange	Total
	Capital	Losses	Reserve	Reserve	Reserve	Equity
	$	$	$	$	$	$
At 1 July 2022	48,227,649	(48,843,673)	567,997	2,720,044	62,558	2,734,575
(Loss) for the period	-	(1,220,449)	-	-	-	(1,220,449)
Other comprehensive income (net of tax)	-	-	-	-	34,859	34,859
Total comprehensive loss (net of tax)	-	(1,220,449)	-	-	34,859	(1,185,590)
Transaction with owners in their capacity as owners
Shares issued net of transaction costs	1,033,155	-	-	-	-	1,033,155
Shares issued to management	55,351	-	(76,420)	-	-	(21,069)
Shares to be issued	-	-	62,702	-	-	62,702
Options issued to directors and management	-	-	-	16,355	-	16,355
At 31 December 2022	49,316,155	(50,064,122)	554,279	2,736,399	97,417	2,640,128
At 1 July 2023	49,391,945	(52,224,070)	595,010	2,795,382	-	558,267
(Loss) for the period	-	(248,761)	-	-	-	(248,761)
Other comprehensive income (net of tax)	-	-	-	-	-	-
Total comprehensive loss (net of tax)	-	(248,761)	-	-	-	(248,761)
Transaction with owners in their capacity as owners
Performance shares issued	-	-	66,859	-	-	66,859
Conversion of performance rights	170,291	-	(170,291)	-	-	-
Options issued to directors and management	-	-	-	13,629	-	13,629
At 31 December 2023	49,562,236	(52,472,831)	491,578	2,809,011	-	389,994

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 2023

		6 months to 31 December 2023	6 months to 31 December 2022
		$	$
Cash flows from operating activities
Receipts from associate		277,071	-
Payments to suppliers and employees		(323,677)	(399,487)
Payment for exploration and evaluation costs		(107,254)	(822,588)
Net cash flows used in operating activities		(153,860)	(1,222,075)
Cash flows from financing activities
Lease principal repayments		-	(16,601)
Proceeds from issue of shares		-	1,033,155
Net cash flows from financing activities		-	1,016,554
Net increase / (decrease) in cash and cash equivalents		(153,860)	(205,521)
Cash and cash equivalents at beginning of period		653,990	1,650,056
Effect of foreign exchange on cash and cash equivalents		(11,166)	6,777
Cash and cash equivalents at end of the period		488,964	1,451,312

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes in the full Half-Year Financial Report.

- ENDS -

 

END