Europa Metals gets Spanish government grant for Toral

The AIM-traded firm said it would be used towards research and development at its wholly-owned Toral lead, zinc and silver project in the Castilla y León region of north-west Spain.

It said the CDTI is a public business entity in Spain, under the auspices of the Ministry of Science and Innovation, which fosters the technological development and innovation of Spanish companies.

The grant was categorised as a partly-refundable loan, with a nil per cent interest rate, with the funds received to be allocated towards the development of research and development technologies relating to the recording and correction of drillhole deviation at Toral.

Application for the grant was made further to ongoing work by Europa Metals and the AIR Institute, linked to the Salamanca University, and drilling contractors Sondeos y Perforaciones Industriales de Bierzo (SPI).

Europa Metals said it would draw the grant monies down in up to three tranches, with the prior agreement of the CDTI, with the initial tranche, comprising €0.16m, to be received by the company “imminently”.

The second and third tranches were scheduled to be drawn down over the next 18 months subject to certain, defined operational milestones.

Europa Metals said the core objectives of the innovation programme were to retrieve and process data from the Toral drilling campaign in order to develop algorithmic software for use in exploration campaigns to correct drilling deviation.

Biannual repayments of €21,822 would begin in 2024, running for seven years until 2031, with a fixed interest rate being set by the currently-prevailing Euribor rate of nil per cent.

The company said it expected that the grant would enable it to apply for reductions in taxes payable, relating mainly to labour costs, and was satisfied that the terms of the grant would not prevent it from participating in other grant application processes, save where there was a specific technological overlap.

Once the funds had demonstrably been spent on appropriate research and development exploration activity at the Toral Project, 70% of the total grant would be repayable, with the balancing 30% then not required to be repaid.

At Toral, the company said it was working towards finalisation of a new, independent economic report on the project, currently being undertaken by Bara Consulting.

Certain elements of a pre-feasibility study for Toral were also underway, with the bore hole for hydrogeological testing now complete, which would enable monitoring to start.

“Following our recent successful £2m equity raise, I am pleased to announce the awarding of this €466,801.50 grant by the Spanish governmental agency, CDTI,” said chief executive officer Laurence Read.

“This interest free loan is a huge testament to the operational work performed at the Toral Project, and our team's ability to establish innovative partnerships with local contractors and leading higher education establishments.

“For some time, we have been progressing our work with the University of Salamanca and SPI to assess how the development of Toral could be utilised to assist the Castilla y León and Spain with innovation in the field of exploration.”

Read said that, using Toral as a real-time project, its partnership with the AIR Institute and SPI would field-test data collection and processing systems from the exploration drill rigs once Europa begins its pre-feasibility study drilling campaign, following completion of the current ongoing economic study.

“Europa Metals is pursuing a number of grant initiatives and I am pleased that the first successful application stems from the Castilla y León itself.

“The grant is on attractive terms and allows money to be spent at the project level contributing to the research and development aspects of the company's pre-feasibility study programme.”

At 1118 BST, shares in Europa Metals were up 2.33% at 11p.