Valjevo Project Update to the Mineral Resource Estimate Revision 2
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Document No. RPT-20605-0001 Valjevo Project Update to the Mineral Resource Estimate Revision 2 Samuel Engineering Euro Lithium – Valjevo Project Updated Mineral Resource Estimate Project No. 210220605 19 November 2020 Stantec Consulting International LLC 3133 West Frye Road, Suite 300 Chandler, Arizona 85226 USA Table of Contents 1.0 INTRODUCTION ............................................................................................................................... 1 1.1 Introduction ....................................................................................................................... 1 2.0 PROJECT BACKGROUND ............................................................................................................... 1 2.1 Property and Location ..................................................................................................... 1 2.2 Local Infrastructure ........................................................................................................... 3 2.3 Climate and Physiography .............................................................................................. 4 3.0 GEOLOGY AND MINERALIZATION ................................................................................................ 4 3.1 Property Geology ............................................................................................................. 4 3.2 Deposit Type ...................................................................................................................... 5 3.3 Exploration ......................................................................................................................... 5 3.4 Drilling ................................................................................................................................. 5 3.5 Sample Preparation and Analysis ................................................................................... 6 4.0 MINERAL RESOURCE ESTIMATE ...................................................................................................... 7 4.1 Database ........................................................................................................................... 7 4.2 Data Verification............................................................................................................... 8 4.3 Mineralization Domain Interpretation ............................................................................ 8 4.4 Borate Zone ..................................................................................................................... 10 4.5 Borax Zone ....................................................................................................................... 10 4.6 Block Model Mineralized Zone Determination ............................................................ 11 4.7 Compositing .................................................................................................................... 11 4.8 Grade Capping .............................................................................................................. 12 4.9 Variography..................................................................................................................... 12 4.10 Block Modeling ............................................................................................................... 12 4.11 Bulk Density ...................................................................................................................... 15 4.12 Mineral Resource Classification .................................................................................... 15 4.13 Li2CO3 Equivalent Cutoff Calculation .......................................................................... 16 4.14 Mineral Resource Estimate ............................................................................................ 16 4.15 Confirmation of Mineral Resource Estimate ................................................................ 17 5.0 CONCLUSIONS AND RECOMMENDATIONS .............................................................................. 21 6.0 REFERENCES .................................................................................................................................. 23 Samuel Engineering Euro Lithium – Valjevo Project – Updated Mineral Resource Estimate Document No. RPT-20605-0001 – Valjevo Project Update to the Mineral Resource Estimate, Revision 2 \\us0310-ppfss01\workgroup\2102\active\210220605\report\rpt_20605-0001_valjevo-proj-min-rsrc-est\rpt_20605-0001_valjevo-proj-min-rsrc-est_2.docx Table of Contents Appendices A Drill Hole Location Map B Upper Zone Wireframe C Li Zone and Main Zone Wireframes D Visible Borax in Valjevo Core E Probability Plots for Li Composites F Probability Plots for B Composites G Section A – A1 – Vertical Section Through Block Model Showing Drill Holes and Grade Distribution H Section B – B1 – Vertical Section Through Block Model Showing Drill Holes and Grade Distribution I Extents of Modeled Mineralized Zones with Indicated Area J Recommended Target Area K Extents of Indicated Area with Recommended Drill Hole Locations Samuel Engineering Euro Lithium – Valjevo Project – Updated Mineral Resource Estimate Document No. RPT-20605-0001 – Valjevo Project Update to the Mineral Resource Estimate, Revision 2 \\us0310-ppfss01\workgroup\2102\active\210220605\report\rpt_20605-0001_valjevo-proj-min-rsrc-est\rpt_20605-0001_valjevo-proj-min-rsrc-est_2.docx Page 1 1.0 INTRODUCTION 1.1 Introduction In July 2020, Samuel Engineering approached Stantec Consulting International LLC (Stantec) with an opportunity to update the initial Mineral Resource Estimate (MRE) and Preliminary Economic Assessment (PEA) (P&E Mining Consultants, Inc. [P&E], 2020) for Euro Lithium Inc.’s (Euro Lithium) mineral deposit near Valjevo, Serbia (the Valjevo Project). The Valjevo Project contains four of the critical raw materials (CRM) as defined by the European Commission’s Critical Raw Materials: Charting a Path towards greater Security and Sustainability (2020). This work is an update to the MRE completed in May 2020, that previously focused on an open pit concept to extract lithium-bearing montmorillonite (swinefordite) clays and borates from the resource and produce technical-grade lithium carbonate (Li2CO3), and boric acid (H3BO3). After completing a seven-hole (2,045 m) drill program in a targeted area of the mineral deposit in the spring and early summer of 2020, Euro Lithium requested that Samuel Engineering and Stantec update the resource model and assess alternative mining methods for resource extraction. This report outlines the updated MRE and the associated data and procedures used to derive the estimates. The updated MRE presented herein is reported using Canadian Securities Administrators’ National Instrument 43-101 (NI 43-101) and has been estimated in conformity with the generally accepted Canadian Institute of Mining, Metallurgy and Petroleum (CIM’s) Estimation of Mineral Resource and Mineral Reserves Best Practices Guidelines (2018). Mineral resources are not mineral reserves and do not have demonstrated economic viability; as such, there is no guarantee that any part of the mineral resource will be converted into a mineral reserve. Unlike the initial MRE (P&E, 2020), the updated MRE includes a portion of indicated resources, though most remains inferred. Confidence in the estimate of a combined indicated and inferred mineral resources is sufficient to apply technical and economic parameters at a PEA level, which enables a preliminary evaluation of potential economic viability. Mineral resources may be affected by further infill and exploration drilling, which may result in increases or decreases in resource estimates in subsequent MREs. This updated MRE is based on information and data supplied by Euro Lithium and was written by Stantec’s Allan Schappert, Certified Professional Geologist, and Derek Loveday, Professional Geoscientist, both independent Qualified Persons in terms of NI 43-101. The effective date of this updated MRE is 19 November 2020. 2.0 PROJECT BACKGROUND 2.1 Property and Location The Valjevo Project is comprised of three contiguous exploration licenses: Valjevo, Ljig, and Valjevo North, totaling 274.59 km2 in western Serbia near the town of Valjevo. Samuel Engineering Euro Lithium – Valjevo Project – Updated Mineral Resource Estimate Document No. RPT-20605-0001 – Valjevo Project Update to the Mineral Resource Estimate, Revision 2 \\us0310-ppfss01\workgroup\2102\active\210220605\report\rpt_20605-0001_valjevo-proj-min-rsrc-est\rpt_20605-0001_valjevo-proj-min-rsrc-est_2.docx Page 2 Most of work to date has been on the Valjevo exploration license, the principal license of interest. These licenses cover the Neogene sedimentary basins, associated with the Vardar tectonic zone. Euro Lithium Balkan d.o.o. Valjevo, a wholly owned subsidiary of Euro Lithium, owns the geological exploration rights to the Valjevo Licenses. The Exploration Licenses are located approximately 80 km southwest of the capital city of Serbia, Belgrade. Valjevo is the principal city in the area and the administrative center of the Kolubara District. Rio Tinto’s Jadar lithium-borate deposit lies about 80 km to the northwest of Valjevo on a similar geologic trend within the Vardar Zone. Figure 1 shows the location of the Valjevo Project relative to the capital city of Serbia, Belgrade. Figure 1: Valjevo Project Location The approximate center of the Valjevo Project lies at latitude