Country rocks in the Cinovec area comprise Proterozoic metamorphic complex muscovite-biotite orthogneiss and paragneiss, Lower Palaeozoic phyllite and epiamphibolite and partly migmatised muscovite-biotite paragneiss. These sequences are overlain and cut by the Teplice Rhyolite, composed of extrusive and partially intrusive rhyolite, dacite and ignimbrite and associated tuff with arkosic and Mid-Carboniferous coal interbeds. A thick north-south trending dyke of syenogranite porphyry up to 2km wide intrudes along or near the contact between the eastern gneisses and the Teplice Rhyolite; smaller dykes and masses are found elsewhere within the Teplice Rhyolite and basement rocks.

Tin deposits in the Krusne Hory province are either greisen type (with associated stockwork, sheeted vein and breccia pipe mineralisation) or skarn type. Cinovec is a greisen deposit.

The generic description of such deposits indicates that they consist of simple to complex fissure filling or replacement quartz veins, including discrete single veins, swarms or systems of veins, or vein stockworks, that contain mainly wolframite series minerals (huebnerite-ferberite) and (or) cassiterite as ore minerals (as is the case with Cinovec).

Other common minerals are scheelite, molybdenite, bismuthinite, base metal sulphide minerals, tetrahedrite, pyrite, arsenopyrite, stannite, native bismuth, bismuthinite, fluorite, muscovite, biotite, feldspar, beryl, tourmaline, topaz, and chlorite. Complex uranium, thorium, rare earth element oxide minerals and phosphate minerals may be present in minor amounts.

Greisen deposits consist of disseminated cassiterite and cassiterite-bearing veinlets, stockworks, lenses, pipes, and breccia in gangue composed of quartz, mica, fluorite, and topaz.

Veins and greisen deposits are found within or near highly evolved, rare-metal enriched plutonic rocks, especially near contacts with surrounding country rock; settings in or adjacent to cupolas of granitic batholiths are particularly favourable.

Tin and tungsten deposits exhibit a close spatial association with granitic plutonic rocks, especially late-stage, highly evolved, specialised biotite and (or) muscovite (S-type or A-type) granites and leucogranites. Small to moderate sized cupolas of larger subsurface plutons are especially favourable hosts; deposits may be endo- or exocontact.

Exocontact deposits usually are in pelitic and arenaceous sedimentary or metamorphic rocks and within the contact metamorphic aureole of a pluton. Most endocontact deposits, including tin greisens, and many tin and tungsten veins, are in or near cupolas and ridges developed on the roof or along margins of granitoids.

The Cinovec tin-tungsten-lithium deposit is intimately associated with the cupola of the CinovecZinnwald granite, and comprises:

- irregular metasomatic greisen and greisenised granite zones from several tens to hundreds of metres thick that follow, and are located near or at, the upper contact of the cupola. Greisen comprises quartz and zinnwaldite with or without topaz, with irregular admixtures of sericite, fluorite and adularia-K feldspar;

- thin, flat greisen zones enclosing quartz veins up to 2m thick. Both the greisen and veins parallel the intrusive contact of the cupola, dipping shallowly to the north, south and east. Ore minerals are cassiterite (tin oxide), wolframite (tungsten oxide),scheelite (calcium tungstates) and zinnwaldite (lithium mica). In the greisen, disseminated cassiterite predominates over wolframite, while in veins wolframite is roughly equal to, or more abundant than, cassiterite;

- steep quartz veins with wolframite.

The Cinovec mineralised system represents a world-class example of a Sn/W/Li + rare earth metal district which spans the Czech-German border and is part of the larger Erzgebirge metallogenic region.

Previous mining at Cinovec, although extensive, concentrated on the high-grade vein mineralisation which in the Main part of the deposit has been predominantly exhausted. However, the mineralisation identified at Cinovec South remains relatively untouched and comprises veins as well as the more ubiquitous greisen mineralisation.

As the greisen mineralisation was never the principal target of exploration, it is probable that significant tonnages over and above those stated in this report may exist across the site, although considerable exploration will be required to properly delineate these potential additional resources.

Over and above the Sn-W-Li mineralisation, samples collected from waste dumps and the tailings at Cinovec indicate promising levels of rare earth elements.

The orebody, which is largely flat or shallow dipping, will be mined by longhole open stoping some 25m high using mechanised equipment. The mining method will be enhanced by the proposed cut and fill techniques with cemented paste back fill to ensure overall ground stability and maximise recoveries.

From the Bara scoping study it has been summarised that where the orebody dip is less than 50 degrees, the stope will be vertical, whilst when the dip is greater than 50 degrees, the stopes will be angled to the orebody dip.

Following geotechnical studies, it has been confirmed that no mining or ore extraction will be carried out within a vertical distance of 100m of surface.

Longhole open stoping ore extraction is a natural choice to achieve high underground production rates in this type of deposit.

Mine Design.
According to the Bara report, the new mine area is a Southerly extension of the existing closed and abandoned, Cinovec mine. This Southern extension was initially explored at the time of original mine underground activity through development of the footwall drives on two levels (640mRL and 550mRL), and cross-cuts were developed to intersect the ore body.

For the new project, initially the mine would be accessed through the existing abandoned shafts, Ci-2 and K20225 which would be refurbished and utilised as part of the future operation, with shaft Ci-2 planned to be the hoist shaft and K20225 planned to be the intake ventilation shaft.

Mining Operations.
All lateral development has been designed to 4.5m high by 5.0m wide to allow for the 40t LHD trucks, with the decline developed to 5.0m by 5.0m for improved ventilation intake. The decline and lateral development will be mined using Sandvik DD321, a two boom jumbo capable of multiple applications, face drilling, cross- cut drilling and bolt hole drilling.

Stoping can commence once the ore drives are completed. Initially slot raises will be developed which will be extended to create a void. Stope drilling will be achieved using a Sandvik DL331 which is a one man operated top hammer longhole drill capable of drilling up to 23m. The drill rig will drill 20m rings, to a maximum of 10m width.

Once the stope has been mined out, backfill will be placed into the stope from the level above. Backfill will comprise of hydraulic fill made from tailings from the process plant with 8.0% cement. The hydraulic backfill mix will be prepared on surface and will be pumped to the selected site through a dedicated pipe line.

Vertical shaft Ci-2.
The existing Ci-2 vertical shaft which is 418m deep is to be used for the permanent production hoisting and to serve as a fresh air intake ventilation airway. There is no service hoist as all men and material will be transported through the decline. The rock hoisting shaft will also act as the second means of egress.

The existing 4.5m diameter Ci-2 shaft is concrete capped, although it is not known if the shaft is concrete lined. The shaft will be mucked out and re-equipped for rock hoisting.

Vertical Shaft K20225.
The K20225 shaft is believed to be open, but partially flooded, is 4.8m by 2.5m in size, and is the only dedicated ventilation shaft. It will be used as a fresh intake airway. K20225 shaft will not be equipped or used as a man access.

If this shaft were dewatered, access to the old workings could be made, and the installation of a further ladder-way would provide an additional man access.

European Metal’s approach for operation of the project as a whole is to provide a constant feed rate of 360,000 tonnes per year of mica concentrate to the LCP. The Comminution and Beneficiation plants will therefore vary operating hours to accommodate fluctuations in the mine feed grade, to produce the required level of mica production.

Processing Testwork.
This phase of testwork concerned the beneficiation of primary crushed ROM ore, by primary comminution followed by concentration of zinnwaldite by wet magnetic separation to produce a micaconcentrate, which is further treated by the downstream lithium carbonate plant.

Lithium Concentration: Initial studies investigated both froth flotation and magnetic separation for concentration of zinnwaldite. Magnetic separation was proven to be far superior (91 % lithium metallurgical recovery versus 78 %) and was selected as the method to be optimized for the PFS.

The results showed that an additional Wet H ........