Media Release: Elementos Acquires Spanish Tin Project
- Heads of Agreement signed to acquire the advanced Oropesa tin project in Spain
- Transformational transaction expands Company’s portfolio of advanced, near production tin assets
- Feasibility Study underway and Mining License application has been lodged
- Open pit potential with uncomplicated geology and conventional process flowsheet
- Elementos brings development team with extensive experience and expertise in tin projects
- Oropesa is one of the highest-grade undeveloped tin resources globally:
- – JORC Measured and Indicated Resource of 9.34mt @ 0.55% tin; and
– JORC Inferred Resource of 3.2mt @ 0.52 % tin (at 0.15% tin cut-off); for
– a total contained JORC Resource of 67,520 tonnes of tin
Elementos Limited (ASX: ELT) (“Elementos” or “Company”) is pleased to announce it has signed a binding Heads of Agreement (HoA) with Eurotin Limited (TSX-V: TIN) (“Eurotin”) to acquire the 96% owned Oropesa Tin Project located in Spain (“Oropesa”).
The Company believes Oropesa is one of the best undeveloped tin resources in the Western World. Attractions include, a large JORC Mineral Resource based on more than 54,000 metres of drilling, open-cut mining potential, simple metallurgy and processing, access to development infrastructure, and support from local stakeholders. A Feasibility Study is in progress, Environmental Studies complete, and a Mining Licence Application lodged.
The acquisition represents an excellent strategic fit with the organisations core capability of developing tin projects, a fundamental driver of Eurotin’s decision to partner with Elementos to deliver the Oropesa project.
Oropesa is a near-term development project and cash flow generation opportunity, being acquired at a very attractive valuation. The Company believes it will create significant share value-uplift potential for shareholders as the project is well advanced towards development.
Consideration for the acquisition is the issue of one billion fully paid Elementos shares which are to be distributed pro-rata to Eurotin’s shareholders. The transaction is subject to completion of due diligence and shareholder approvals.
Commenting on the agreement, Chairman Andy Greig said:
“The acquisition of Oropesa is a perfect opportunity to acquire a complementary high-quality tin asset at an attractive price.
“The Company has a team with significant experience and expertise in the tin business including, Chief Executive Officer, Chris Creagh, who worked at the Renison tin operations.
“Chris has a deep understanding of tin orebodies and mineralisation and has previously developed projects from concept through to production.
“Chris is supported by Executive Director Chris Dunks who has over 20 years project delivery experience with engineering firms including Bechtel, Jacobs, SNC Lavalin and Worley Parsons.”
Strategic Rationale for Acquiring Oropesa
The Company believes the acquisition of Oropesa represents an excellent opportunity to create value-uplift potential for shareholders as the project is advanced towards development.
Attraction of the Oropesa project, include:
• Large, well-defined resource – A globally significant, undeveloped resource with strong opportunities for resource expansion;
• Open-cut mining potential –The deposit is amendable to simple drill and blast, truck and shovel open cut mining operations;
• Simple metallurgy – extensive metallurgical testing and process flowsheet designed to produce a 62.4% tin concentrate at a 74.2% metallurgical recovery;
• Near-term production potential – A Definitive Feasibility Study has commenced which is expected to be completed in the 4th Quarter of 2018;
• Permitting process advanced – A base-line Environmental Impact Assessment was lodged with the Government in January 2018 and a Mining License application has been submitted to the Government for approval;
• Located close to development infrastructure – Located close to major highways which link to export ports, water supply and power supply. The region has a skilled mining workforce;
• Low sovereign risk – The Andalucia region of Spain is home to some of the country’s most significant mining operations and part of the European Union which provides a safe investment environment;
• Large sunk cost – significant investment in drilling, geophysics, metallurgical testing and development studies; and
• Local community support – The local government and community is extremely supportive of the project moving ahead.
Development Strategy and Capability
The Company’s strategy at the completion of the transaction, includes:
• Completion of the Definitive Feasibility Study including studying options for enhancing the project economics including, metallurgical and mine optimisation;
• Finalisation of the permitting and environmental studies;
• Securing off-take and project financing; and
• Final engineering and design, prior to construction, commissioning and operations.
The Company believes there is potential to identify other resources in the tenement package and expand the scale of the project in the future.
The Company is pleased to have been identified by Eurotin as a team with the organisational capability to complete the development of Oropesa. The executive team are complimented by a strong and engaged Board of Directors lead by Chairman Andy Greig. Prior to joining the Board of Elementos, Mr Greig was instrumental in building the Mining and Metals division of the Bechtel Group. Mr. Greig has significant experience in designing and constructing mining and minerals processing projects. Other board members include Non-Executive Directors Calvin Treacy and Corey Nolan who have experience in acquiring, financing and advancing mineral projects towards development.
Location and Infrastructure
Oropesa consists of a 14.51 square kilometre concession package located approximately 75 kilometres north-west of Cordoba and 180 kilometres north-east of Seville, in the region of Andalucía, in southern Spain. The Oropesa district has historically been a mining district for base metals with coal mining ceasing in recent times.
Tin mineralisation was first recognised at Oropesa in 1982. Intensive exploration activity since 2010, including 261 drill holes, has resulted in the definition of the current mineral resource. The project area contains numerous geophysical and geochemically anomalous regions that could potentially extend this resource with additional exploration.
Figure 1 – Location of Oropesa
Access to the Oropesa project area is well serviced with paved highways and gravel roads and tracks throughout the area. There is rail access approximately 16 kilometres from the project area. The district also has a number of power transmission lines of varying voltage capacities.
JORC Mineral Resources
The tin mineralisation (cassiterite with minor stannite) occurs as a replacement style orebody associated with sulphides, predominantly pyrite and pyrrhotite within a sedimentary sequence at the contact between sandstone and conglomerate units. Widespread folding of the sedimentary sequence has resulted in the mineralised sequence being overturned and repeated in places.
Figure 2 – Cross section of the Oropesa orebody looking northwest
The Oropesa tin project contains a JORC compliant Measured, Indicated and Inferred Resource of 67,520 tonnes of tin (see Table 1).
Figure 3: Oropesa – resource location, soil geochemistry and IP geophysical anomalies
The Project has been subject to extensive metallurgical testing including bulk sample analysis. Metallurgical testing has defined a conventional tin recovery processing circuit consisting of gravity and flotation that has achieved tin recoveries of 74.2% to a concentrate grade of 62.4% tin.
The Company will be studying opportunities to optimise the flowsheet including using ore sorters which has been successfully demonstrated at other tin projects around the world.
An Exploitation Licence (Mining Licence) application was lodged with the Junta de Andalucia in October 2017. The application entails all technical aspects for the mining and processing of the Oropesa orebody as well as associated infrastructure, equipment and tailings storage facilities to operate the tin mine. The application is for an initial open-cut operation graduating to an underground operation with the potential to produce up to 3,000tpa of tin in concentrate.
The Environmental Impact Assessment was lodged with the Government in January 2018.
Oropesa Binding Heads of Agreement
Elementos has entered into a binding HoA with Eurotin to acquire the Oropesa Tin Project in Spain through the purchase of 100% of the shares in a wholly owned subsidiary of Eurotin, Minas De Estaño De España, S.L.U., which in turn owns 96% of the Oropesa Tin Project (the Project).
The consideration for the acquisition of the Project is one billion ordinary fully shares in Elementos which are to be distributed pro-rata to Eurotin’s shareholders.
Elementos will also be assuming up to CAD$1.0m in loans owed to Eurotin’s Chief Executive Officer and major shareholder, Mark Wellings (Wellings Loan).
The acquisition of the Project is to take place by way of a share exchange, plan of arrangement or other such form of transaction as the Company and Eurotin may determine, acting reasonably, but which is currently anticipated to be conducted by way of plan of arrangement under Canadian laws pursuant to an arrangement agreement (Arrangement Agreement). The HoA is subject to a number of conditions precedent over the next 30 days including entering in to the formal Arrangement Agreement, completion of satisfactory due diligence enquiries by both parties, completion of documentation related to the Wellings Loan and entering into of voting agreements by each of the major shareholders of Eurotin and Elementos agreeing to vote in favour of the resolutions approving the transaction. Elementos has been granted exclusive dealing rights during the next 30 days.
Both Elementos and Eurotin must obtain all necessary regulatory and shareholder approvals in order to undertake the transaction. Elementos will be convening a shareholders meeting as soon as practicable to seek shareholder approval for the issue of the consideration shares. There will be no changes to the Elementos or Eurotin boards as a result of this acquisition.
Further details regarding the key terms of the HoA are set out in Annexure 1. Additional information will be provided on completion of due diligence investigations and entry of the Arrangement Agreement.
For more information please visit: www.elementos.com.au
For further information please contact:
Duncan Cornish, Company Secretary
T: +61 7 3212 6299
E: [email protected]
Rod North, Managing Director,
Bourse Communications Pty Ltd
T: (03) 9510 8309, M: 0408 670 706
E: [email protected]
This document may contain certain forward-looking statements. Such statements are only predictions, based on certain assumptions and involve known and unknown risks, uncertainties and other factors, many of which are beyond the company’s control. Actual events or results may differ materially from the events or results expected or implied in any forward-looking statement.
The inclusion of such statements should not be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions or that any forward-looking statements will be or are likely to be fulfilled. Elementos undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this document (subject to securities exchange disclosure requirements).
The information in this document does not take into account the objectives, financial situation or particular needs of any person or organisation. Nothing contained in this document constitutes investment, legal, tax or other advice.
COMPETENT PERSONS STATEMENT
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Robert Goddard, who is a full time employee of SRK Consulting (UK) Ltd. Mr Goddard has been engaged by Minas De Estano De Espana, SLU as an Independent Consultant to prepare a Mineral Resource estimate and supporting documentation for the Oropesa Tin Project. Mr Goddard is a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and who consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Robert Goddard has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012).
The Australian Securities Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this release.