Europa Metals Ltd (LON:EUZ) shares surged in early deals on Friday after the group released a resource upgrade for the Toral lead-zinc-silver project located in northern Spain.
The new independent resource estimate is for 3.8mln tonnes with a zinc equivalent grade (including lead credits) of 8.3% and silver at 30 grams per tonne. It marks a 40% increase in overall resource tonnes, including a 38% rise in contained, a 36% increase in lead and a 32% lift to silver volume.
READ: Europa inks metal marketing deal for Toral mine
Toral now has a total resource of 17mln tonnes grading 6.9% zinc equivalent with 4.1% zinc, 2.9% lead, and 24 grams per tonne silver – representing 720,000 tonnes of zinc, 510,000 tonnes of lead, and 14mln ounces of silver.
The resource upgrade follows a successful phase of drilling comprising 113 diamond drill holes and 4 reverse circulation holes, for just over 60,000 metres. Additionally, the company has completed 19 underground channels for 18.75 metres.
Europa told investors that it expects to utilise its updated resource model, along with ongoing analysis and future metallurgical study, to update the preliminary economic parameters of the project ahead of a Pre-Feasibility Study.
"With every stage of additional work over the last 12 months we have further identified Toral as having significant potential to be a future high-grade producer of concentrates, located in an area with first-rate infrastructure and benefitting from the support of the Junta of Castilla y Leon,” Laurence Read, Europa chief executive said in a statement.
“Europa Metals looks forward to releasing operational updates on metallurgy and ore sorting shortly, following which revised, independent economic parameters shall be determined for Toral, effectively updating the financial profile of the project to reflect the work accomplished since the 2018 scoping study," Read added.
Myles Campion, Europa chairman, meanwhile, said: "Increasing the level of confidence in the deposit is key for deriving reliable, quality data for use in economic models.
“By drilling two key targeted holes in the last drilling campaign we have been able to both increase Toral's Indicated resource estimate by 40% and obtain sufficient samples for further metallurgical analysis.
“The significant increase in the Indicated resource category achieved on the back of the last drilling campaign reflects well on Europa Metals' technical team."
In morning trade, Europa Meals shares rose by 23% to change hands at 20.1p.