19 Jul - 7 min read

Milestone 1 of the CDTI €466,801.50 Innovation Grant Completed Toral Pb, Zn & Ag Project, Spain

Milestone 1 of the CDTI €466,801.50 Innovation Grant Completed 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
("the Company")


Milestone 1 of the CDTI €466,801.50 Innovation Grant Completed Toral Pb, Zn &
Ag Project, Spain

Europa Metals, the European focused lead-zinc and silver developer, is pleased to announce that it
has now completed the requisite work and collated and submitted all the relevant documentation to
the Spanish Government Centre for the Development of Industrial Technology (“CDTI”) in relation to
the Stage 1 milestone of its €466,801.50 innovation grant (the “Grant”), further details of which were
announced on 19 October 2020.

Following receipt of an initial tranche of €163,380, Europa Metals has worked closely with its
innovation partners, the University of Salamanca (Air Institute) and the drilling contractors Sondeos
y Perforaciones Industriales de Bierzo SA (“SPI”) in recording and analysing data from the ongoing
2021 Pre-Feasibility Study drilling campaign at the Company’s wholly owned Toral Project. Using
new down-hole monitoring technologies, developed by SPI, the University of Salamanca has now
compiled a sufficient data set from over 2,800m of diamond drilling at Toral, to create an initial,
correctional algorithm to be further researched to move towards potential commerciality. Any future
commercial benefit from an eventual product will be shared by the Innovation Partnership
(comprising Europa Metals, the University of Salamanca and SPI).

Further to the abovementioned submission to the CDTI, it will now undertake its formal review
process, following which the Company intends to draw down Stage 2 funds of €158,628.60.


Commenting today, Laurence Read, CEO of Europa Metals said:
“The work conducted with our Innovation Partners, the University of Salamanca and SPI, has been
outstanding and we are delighted to have completed and submitted the necessary documentation
on schedule, in respect of the Stage 1 milestone requirements as outlined under the €466,801.50
grant, awarded to us by the CDTI. I would like to thank CDTI and the Spanish Ministry of Science
and Innovation for backing this exciting project as we continue to support the University of
Salamanca’s investigation into new, commercial, deviational correction algorithms for potential
application to diamond drilling campaigns.
“I look forward to updating the market further in due course as the CDTI Stage 1 milestone review
process is completed alongside other activities on our Toral PFS campaign.”


About CDTI
The CDTI (“Centro para el Desarrollo Tecnológico Industrial”; https://www.cdti.es/) is a Public
Business Entity in Spain, under the auspices of the Ministry of Science and Innovation, which fosters
the technological development and innovation of Spanish companies. The Grant made to Europa
Metals is categorised as a partly refundable loan (with a nil per cent. interest rate) with the funds
received at each stage to be allocated towards the development of R&D technologies relating to the
recording and correction of drillhole deviation at the Toral Project. Application for the Grant was
made further to the abovementioned ongoing work by Europa Metals and the AIR Institute, linked to
the Salamanca University, in conjunction with SPI.

Grant terms
Europa Metals can draw the Grant monies down in up to three tranches subject to certain, pre-
defined, operational milestones being met. The core objectives of the Innovation Programme are to
retrieve and process data from the Toral drilling campaign in order to develop algorithmic software
for use in exploration campaigns to correct drilling deviation. Biannual repayments of €21,822 begin
in 2024, running for 7 years until 2031, with a fixed interest rate being set by the prevailing Euribor
rate at inception of nil per cent.

Europa Metals anticipates that the Grant will enable the Company to apply for reductions in taxes
payable, relating mainly to labour costs, and is satisfied that the terms of the Grant do not prevent
the Company from participating in other grant application processes save where there is a specific
technological overlap.

Once the funds have demonstrably been spent on appropriate R&D exploration activity at the Toral
Project by the Company, 70 per cent. of the total Grant will be repayable with the balancing 30 per
cent. then not required to be repaid.



United Kingdom

19 July 2021


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)
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/James Pope
T: +44 (0)20 3657 0050

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 as it forms part of United
Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.



Appendix: Further information on the Toral Project

Developing Potential Future Lead, Zinc & Silver Production within the EU
Located within the province of Castilla y León, Spain, Toral is well positioned to become a potential high grade
production source of lead, zinc and silver within the EU trading block.

The Company is currently conducting a Pre-Feasibility Study (“PFS”) on the project with Wardell Armstrong
International Ltd as PFS manager further to, inter alia, the successful completion of a preliminary economic
study by Bara Consulting and Addison Mining Services Limited in November 2020 which determined the
following key parameters:
 Resource          Indicated Tonnes                        3.8m
                   Inferred Tonnes                         13.5m
                   Total Tonnes                            17m
                   Av. ZnEq. (PbAg)%                       7.3
 Mining            Rate tpa                                700,000
                   Grade ZnEq%*                            7.6%
                   Cost                                    US$36/t
                   LOM                                     12 years
 Metallurgy        Process                                 Sorting+Flotation
                   Recovery (Average)                      85% Zn, 87% Pb, 86% Ag
 Capex             Mine                                    US$86m
                   Upfront (to production)                 US$79m
 Financials        NPV                                     US$156m
                   IRR                                     31.3%
                   Payback Year                            4

* - Zn Eq (Pb)% is the calculated Zn equivalent incorporating lead credits; (Zn Eq (Pb)% = Zn + Pb*0.926). Zn
Eq (PbAg)% is the calculated Zn equivalent incorporating silver credits as well as lead; (Zn Eq (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.

Notes:
1.   No mineral reserve calculations have been undertaken. Mineral resources that are not mineral reserves
     do not have demonstrated economic viability.
2.   Numbers are rounded to reflect the fact that an Estimate of Resources is being reported as stipulated by
     JORC 2012. Rounding of numbers may result in differences in calculated totals and averages. All tonnes
     are metric tonnes.
3.   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. 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.
4.   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*0.926
     + Ag*0.019).
5.   Zn Eq is the calculated Zn equivalent using lead credits and does not include silver credits (Zn Eq = Zn
     + Pb*0.926).
6.   The Mineral Resource Estimate set out above for the zinc, lead and silver mineralisation in the Toral
     Project area is based on a 3D geologic model and wireframe restricted block model that integrated the
     exploration work on the Toral Project up to 21 January 2020. The block model used uniform cell size of
     25x10x25m to best suit the orientation of the mineralisation and sample spacing. The block model was
     rotated by 20 degrees in plain view to best match the trend of mineralisation. Sub cells were applied to
     better fit the wireframe solid models and preserve accurate volume as much as possible. Cells were
     interpolated at the parent block scale using an Ordinary Kriging.
7.   Following statistical analysis and assessment of the updated assay composite database top cuts of 125g/t
     Ag were applied to the data. No top cuts were applied for Zn or Pb.
8.   The Indicated and Inferred mineral resource estimates for the Toral zinc-lead-silver project set out above
     (at a cut-off grade greater than 4% Zn Equivalent) comply with the resource definitions as described in
     the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The
     JORC Code, 2012 Edition. Prepared by: The Joint Ore Reserves Committee of The Australasian Institute
     of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).
     .

Date: 19-07-2021 08:00:00
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