European Lithium (ASX:EUR) has executed a binding term sheet for the sale of its gold project in Western Australia in exchange for cash and shares valued at $1 million.
European Lithium was previously named Paynes Find Gold Ltd and relisted on the ASX during September 2016 after acquiring the Wolfsberg Lithium Project.
The Paynes Find Gold Project is being sold to a subsidiary of Cervantes Corporation (ASX:CVS) for $500,000 in cash to be paid in instalments and stock worth $500,000.
Completion of the transaction is dependent on the purchaser completing due diligence, receipt of all necessary shareholder, regulatory and third party approvals by the company, the purchaser and CVS, and a formal agreement being entered into.
Tony Sage, chairman, commented: “I am extremely pleased that the board has delivered on its strategic plan to sell the Paynes Find Gold Project.
“The funds generated will be applied to fund the aggressive development of the company’s Wolfsberg Lithium Project in Austria.”
Wolfsberg lithium project
The project is comprised of 22 original and 32 overlapping exploration licences and a mining licence over 11 mining areas has been issued by the Austrian Mining Authority.
Wolfsberg was discovered by Minerex in the 1980s, a period when the lithium demand and price did not support project development.
European Lithium undertook a successful program to verify the Minerex historical data, which has been used to in associate with recent drill results to compile a JORC resource of 6.3 million tonnes at 1.17% lithium oxide.
The project has had 17,000 metres of drilling and 1,400 metres of declines, drives and crosscuts completed and installed by previous owners, and this work will allow the company to examine routes to fast track the development phase.
Development road map
The indicative development timetable for Wolfsberg is as follows:
- Q2 2017: Increase resource;
- Q2 2017: Finalise pre-feasibility study;
- H1 2018: Finalise definitive feasibility study;
- H2 2018: Complete baseline/EIS/permitting;
- H2 2018: Fast track, proposed to commenced production of concentrate for glass-ceramic industry; and
- Q4 2019/2020: Commence operations for production of lithium concentrate for battery factories.
Resource drilling stopped onl 22 December 2016 to break for the Christmas period before restarting on 9 January, 2017.
All permits required by authorities in Austria have been received.
Results will be reported as received.
Mine design studies
SRK Consulting has been engaged to undertake the mine design studies for the pre-feasibility study and the seven week phase one program is underway.
Phase one will address geological modelling for mine planning, geotechnical analysis, cut-off grade calculations, stope optimisation, production rate analysis and mine production scheduling and high level capital and operating costs.
Following the results of this study, a 12 week program to undertake mine design and scheduling to pre-feasibility level will be carried out.