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MetalsTech Limited: September 2020 Quarterly Activities Report

ID: 1561895
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(businesspress24) -
MetalsTech Limited (ASX: MTC) is pleased to report its activities for the quarter ended 30 September 2020.

This year has been a transformative one for the Company.

Despite the COVID-19 global pandemic we have made short work of adding value at our Sturec Gold Mine in Slovakia, delivering a maiden JORC (2012) Resource of a solid 1,069,000 ounces of gold and 8,214,000 ounces of silver. We also secured an extension to our underground mining licence which has been vital in our efforts to confirm an attractive metallurgical and processing profile for Sturec ore from bulk metallurgical testing.

On the exploration front, we have built up our local team under the leadership of our exploration manager Dr Quinton Hills and successfully commenced maiden drilling in July this year. Although the rate of drilling is slower than we would like, this is something we can ramp up in various ways over time and we are confident that we will have tremendous success in this area of our business. We are excited to see drilling assays which we will be reporting regularly as received.

Since acquiring the mine, the real opportunity at Sturec has become very clear. While historically it has been the focus of a very large open pit mining concept, very little attention has been applied towards looking to exploit a potential high-grade underground mining opportunity. This is surprising considering the vast underground mine workings which contributed significantly to the more than 1.5 million ounces of historic gold production which was processed utilising simple gravity separation processing. Although the current resource has been largely modelled and reported on an open cut basis with a very small underground component, in the near future, the Company intends to re-model the existing resource on a predominantly underground basis, incorporating the drilling results from our current program, with a view to delivering a scoping study based on an underground mining concept with a potentially simple processing strategy.



There are a number of high impact value catalysts on the horizon for the Company, including drilling results, a potential opportunity to re-model and grow the underground resource (subject to exploration success) and maiden economic studies around an underground mining operation. We look forward to finishing off the year strong and would like to thank our Board and management for their deep commitment to driving shareholder value and to our shareholders for their commitment and ongoing support.

Sincerely,
Russell Moran
Chairman
MetalsTech Limited

HIGHLIGHTS

JORC (2012) Mineral Resource

- JORC (2012) Mineral Resource for Sturec:
- 21.2Mt (at) 1.50 g/t Au and 11.6 g/t Ag, containing 1.026Moz of gold and 7.94Moz of silver of which 67% is Indicated and Measured Resource Category using a 0.4g/t Au cut-off and within an optimised open pit shell; and
- 388kt (at) 3.45 g/t Au and 21.6 g/t Ag containing 43koz of gold and 270koz of silver, of which 71% is Inferred Resource Category using a 2.85g/t Au cut-off (outside the optimised open pit shell) on an underground mining basis
- based on 90.5% gold recovery rates on Sturec mineralisation using ammonium thiosulphate processing technology without the use of cyanide
- Deposit is open to the north and south along strike, as well as down-dip and plunge, indicating significant exploration upside and ready drill targets
- High-grade core of the known mineralisation plunges south into an undrilled zone, which will be the focus of resource expansion drilling

Underground Diamond Drilling Program

- Underground diamond drilling progressing well from within the Andrej Adit at the Sturec Gold Mine
- Exploration will include up to nine (9) diamond drill holes totalling approximately 3,000m and will focus on potential resource expansion
- A second drill site has been identified and will be prepared as part of an expanded drilling campaign from within the Andrej Adit at the Sturec Gold Mine
- Drilling will follow up STOR 3.11 which intersected:
o 89.0m (at) 6.9g/t Au and 23.6g/t Ag from 114m to 203m down hole using a 3g/t Au cut-off
§ within a broader intersection of
o 137.3m (at) 4.6g/t Au and 16.5g/t Ag from 67.7m to 205m down hole using a 0.3g/t Au cut-off
- Assay results for UGA-01, UGA-02 and UGA-03 to be released during the current Quarter ending 31 December 2020
- Drilling for UGA-04 has been recently completed and the core is currently being prepared for cutting and sampling which is expected to be completed in the coming weeks before being despatched to the laboratory for analysis
- Drilling has recently commenced for UGA-05
- Results from the current drill program will feed into the underground mine scoping study, which is expected to include as a first stage of operations, a simple and low CAPEX gravity separation and flotation concentrate operation with a shorter timeline to production
- The gold sector is booming and to capitalise on this the Company is looking to fast-track production at Sturec - the Company is currently completing of a scoping study for a simple, high-grade underground mine that takes advantage of the existing Sturec infrastructure, mine workings and existing underground mining licence which was awarded to the Company in April 2020

Excellent Gravity and Flotation Recoveries at Sturec

- Excellent gold recovery on transitional (semi-oxidised) and sulphide (fresh) ore from the Andrej Adit within the Sturec Gold Mine using gravity separation and flotation
- Gravity gold recoveries range from 52% to 74% increasing to up to 88% after flotation and increasing to up to 98% if flotation tailings are also leached
- Strong gold recovery profile of sulphide ore supports potential for simple gravity separation and flotation processing strategy which would significantly reduce CAPEX and allow Sturec to produce a gold concentrate for export out of Slovakia where it could be processed further using conventional processing for sulphide concentrates or sold

Planned Underground Roadway Development at Sturec

- Proposed underground exploration roadway development at the Andrej Adit designed to:
- facilitate faster drilling by providing access for multiple drill rigs
- allow for more optimal orientation for infill drilling over target zone
- provide vital infrastructure for future underground gold mining
- accelerate resource expansion efforts

Funding

- Placement to Sophisticated and Professional Investors (Placement) of $3,300,000 (before costs) via the issue of 20,000,000 fully paid ordinary shares at 16.5 cents per share
- Sanlam Private Wealth Pty Ltd acted as Lead Manager to the Placement
- MetalsTech is well funded to achieve its near-term objectives at the Sturec Gold Mine which include:
- underground roadway development within the Andrej Adit to facilitate further resource expansion drilling with multiple rigs;
- resource expansion drilling targeting vein sets both within and outside of the main Schramen Vein (the major historical gold production vein);
- scoping study on a high-grade underground gold mine producing a high-grade gold concentrate through simple gravity and flotation processing; and
- Pre-Feasibility Study including a new mine plan, mine design and processing route
- Convertible notes agreement terminated by the Company as it was considered that the convertible note securities are no longer in the best interests of shareholders.

- Mr Chen continues to be a supportive financier of the Company

OVERVIEW

The Sturec Gold Mine is located in central Slovakia between the town of Kremnica and the village of Luky, 17km west of central Slovakia''s largest city, Banská Bystrica, and 150km northeast of the capital, Bratislava.
The Company previously announced that it had delineated a JORC (2012) Mineral Resource on Sturec (Mineral Resource).

The Mineral Resource was reported in accordance with JORC (2012) guidelines as 21.2Mt (at) 1.50 g/t Au and 11.6 g/t Ag (1.59g/t AuEq), containing 1.026Moz of gold and 7.94Moz of silver (1.086Moz of gold equivalent) using a 0.4g/t Au cut-off within an optimised open pit shell; as well as 388kt (at) 3.45 g/t Au and 21.6 g/t Ag (3.60g/t AuEq1), containing 43koz of gold and 270koz of silver (45koz of gold equivalent) outside the optimised open pit shell on an underground mining basis.

The Company has continued to progress the metallurgical testing program on the Sturec ore in Australia in collaboration with Nagrom. Mr Noel OBrien, Technical Advisor (Metallurgy & Processing), supervised the testing program. The Company has continued to mine and extract ore from the Andrej Adit under its underground mining licence, with ore being shipped to Australia for bulk metallurgical testing covering conventional gravity separation and flotation.

In addition, the Company has continued diamond drilling from within the underground Andrej Adit as part of a multi-stage exploration program at Sturec.

Drilling will test the previously unexplored area adjacent to and down dip / plunge of the existing high-grade mineral resource at Sturec. A total of nine (9) diamond drill holes within the Andrej Adit have been planned for a total of approximately 3,000m.

Drilling will test the interpreted extension of the high-grade plunging zone within the Sturec Mineral Resource that is believed to extend from historic drill hole STOR 3.11 to a previously unexplored area to the south.

STOR 3.11 is included within the recently announced JORC (2012) Mineral Resource Estimate for Sturec and its close proximity to the boundary extent of the resource (~70m), is interpreted to indicate there is excellent potential along plunge of this drill hole to locate further high-grade mineralisation outside the current Sturec Mineral Resource.

STOR 3.11 intersected 89.0m (at) 6.9g/t Au and 23.6g/t Ag from 114m to 203m down hole using a 3g/t Au cut-off within a broader intersection of 137.3m (at) 4.6g/t Au and 16.5g/t Ag from 67.7m to 205m down hole using a 0.3g/t Au cut-off.

Refer to ASX Announcement dated 21 April 2020 and titled MetalsTech Targets High Grade Gold Zone.

The underground diamond drilling program is progressing well with the Company having completed four diamond drill holes under this maiden drilling campaign with each reporting excellent core recovery (>95%).

Assay results for UGA-01, UGA-02 and UGA-03 are expected to be reported during the current quarter ended 31 December 2020.

Drilling for UGA-04 has been recently completed and the core is currently being prepared for cutting and sampling which is expected to be completed in the coming weeks before being despatched to the laboratory for analysis.

Drilling has recently commenced for UGA-05.

EXCELLENT GRAVITY AND FLOTATION RECOVERIES AT STUREC

In May 2020, Company personnel in Slovakia, under the supervision of an independent geological consultant took face samples of transitional (semi-oxidised) and sulphide (fresh) ore from the Andrej Adit at Sturec. These samples were collected and couriered securely, under strict quarantine protocols to Nagrom Laboratories in Perth for bulk ore gold and silver recovery tests as a precursor to testing core samples to be obtained from the current diamond core drilling program.

The objective of testing the sulphide ore was to confirm that potentially economic levels of gold and silver recovery could be obtained using conventional gravity and flotation processes from this style of mineralisation, to produce gold and silver concentrates suitable for either treatment in Slovakia using a non-cyanide processing technology (such as thiosulphate) or suitable for export to elsewhere in Europe (e.g. Poland) where the concentrates could be directly smelted or further processed using traditional cyanide leaching.

Metallurgical Sampling

Two 100kg bulk samples were mined from within the Sturec Mineral Resource where it can be accessed from the Andrej Adit at -435970mE; -1230067mN; 656m RL; Datum: S-JTSK/ Krovak.

Two samples were taken:

- P4 Transitional (semi-oxidised sample) was taken on the existing face of the mineralisation; and
- P4 Fresh (sulphide sample) was taken at the same location as P4 transitional but it was taken from at least 50cm into the existing face where the sample was geologically identified as fresh.

These samples were then transported securely, under strict quarantine protocols to Nagrom Laboratories in Perth for various metallurgical testwork programs.

Metallurgical Testwork Results

An approximately 20kg sub-sample of P4 Transitional and P4 Fresh were first subjected to a standard Gravity Recoverable Gold (GRG) test.

This test involved:

- Grinding to p90 = 850 microns and processing in a Knelson gravity concentrator.
- Grinding the first stage tailings to p50 = 75 microns and processing that in the Knelson.
- Grinding the second stage tailings to p90 = 75 microns and processing that in the Knelson.

The results of the GRG test were:
Sample P4 P4 Fresh
Transitio
nal

Au Head calc g/t9.52 5.05
Ag Head Calc g/t49 44
Grind p90 850 850
microns

Au recovery 33.05% 16.96%
Ag recovery 4.52% 2.84%
Grind p50 75 75
microns

Au recovery 37.48% 31.34%
Ag recovery 10.87% 11.27%
Grind p90 75 75
microns

Au recovery 3.53% 4.01%
Ag recovery 3.73% 2.33%
Total gravity 74.06% 52.31%
Au Recovery


Total gravity 19.12% 16.44%
Ag Recovery


Gravity Tailing 2.50 2.44
g/t
Au

Gravity Tailing 40 37
g/t
Ag

The tailings from the third stage gravity concentration were further processed by conventional sulphide flotation, which resulted in a further 12% and 30% gold recovery respectively.

Overall, the combined gravity and flotation recoveries were:

Sample P4 P4 Fresh
Transition
al

Gravity Au 74.06% 52.31%
Recovery

Gravity Ag 19.12% 16.44%
Recovery

Flotation Au 13.94% 29.69%
Recovery

Flotation Ag 15.13% 32.26%
Recovery

Overall Au 88.00% 82.00%
Recovery

Overall Ag 34.25% 48.70%
Recovery

Gravity separation and flotation does not incorporate the use of cyanide.

The flotation tailings were further leached in cyanide to determine if there was residual gold available for recovery.

Sample P4 P4 Fresh
Transiti
onal

Au Recovery to 88.00% 82.00%
Concentrate

Ag Recovery to 34.25% 48.70%
Concentrate

Au recovery in 9.90% 14.90%
Tailings
leach

Ag recovery in 10.76% 16.25%
Tailings
leach

Total Au 97.90% 96.90%
Recovery

Total Ag 45.01% 64.95%
Recovery

If tailings were to be further leached using cyanide (which is not permitted in Slovakia however is permitted in other close neighbouring European jurisdictions), total recoveries of up to 98% for gold and 65% for silver may be achieved. These results provide confidence that Sturec may lend itself to producing an attractive flotation concentrate, with a favorable processing profile.

PLANNED UNDERGROUND ROADWAY DEVELOPMENT AT STUREC

In order to facilitate faster drilling from multiple orientations and to facilitate infill drilling into the previously unexplored area along strike/plunge to the south of the existing JORC (2012) Mineral Resource at Sturec (subject to drilling success), the Company is planning to extend the current Andrej Adit with a series of additional underground roadway developments off the main Andrej Adit roadway, where diamond drilling is currently based.

The planned underground roadway developments within the Andrej Adit will initially include up to three exploration adits (trending east-west) into the hangingwall, and if successful, the Company will add additional east-west trending underground roadways, as well as extend the main Andrej adit itself, which will allow for multiple drill rigs to be in operation simultaneously, thereby accelerating drilling and allowing the Company to drill the interpreted extensions to the mineralisation at an angle closer to perpendicular.

These additional extensions and exploration roadway developments from within the Andrej Adit will also support future mining activities and provide additional sites from which the Company will be able to access fresh ore for more advanced metallurgical studies, including additional gravity and flotation studies, to support an underground gold mining scoping study.

Opening access within the Andrej Adit will provide the Company with a low-cost opportunity to scale up the exploration at Sturec as the Company progresses towards the delineation of a potentially high-grade economic underground gold mine.

FUNDING

During the Quarter ended 30 September 2020, the Company completed a placement to Sophisticated and Professional Investors (Placement) of $3,300,000 (before costs) via the issue of 20,000,000 fully paid ordinary shares at 16.5 cents per share.

Sanlam Private Wealth Pty Ltd acted as Lead Manager to the Placement.

Placement Shares were allotted with 5,000,000 Shares allotted pursuant to ASX Listing Rule 7.1A and 15,000,000 Shares to be allotted pursuant to ASX Listing Rule 7.1.

MetalsTech is well funded to achieve its near-term objectives at the Sturec Gold Mine which include:

- underground roadway development within the Andrej Adit to facilitate further resource expansion drilling with multiple rigs;
- resource expansion drilling targeting vein sets both within and outside of the main Schramen Vein (the major historical gold production vein);
- scoping study on a high-grade underground gold mine producing a high-grade gold concentrate through simple gravity and flotation processing; and
- Pre-Feasibility Study including a new mine plan, mine design and processing route

OTHER

On 29 September 2020, the Company released an updated Investor Presentation for the Sturec Gold Mine.
ASX LISTING RULE COMPLIANCE

As disclosed at section 5.3.5 of the Quarterly Cashflow Report for the period ended 30 September 2020, the Company made payments to directors and their related parties during the Quarter as follows:

1. Mr Moran $128,000
2. Mr DAnna $65,000
3. Dr Zeng -$13,000

Notes:

1. Director Mr Moran invoices for his services via a consulting arrangement with Natres Services Pty Ltd (NatRes). Under that agreement there are two nominated persons including Mr Moran and Ms F Paterson who is a related party, being the spouse of Mr Moran. Total payments for the quarter to NatRes were $128,000 for the services of the two nominated persons.

2. Mr DAnna and Dr Zeng are the only nominated persons under their consulting entities.

ENDS

For further information, contact:

Russell Moran
Chairman
M +61 415 493 993
russell(at)metalstech.net

Nathan Ryan
Investor Relations
M +61 420 582 887
nathan.ryan(at)nwrcommunications.com.au

Gino DAnna
Director-
M +61 400 408 878
gino(at)metalstech.net



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Date: 10/30/2020 - 19:20
Language: English
News-ID 1561895
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