European Metals Holdings Limited’s (AIM/ASX: EMH) shareholders have approved amended arrangements for the investment of EUR29.1 million (approximately GBP 25.8 million) by CEZ a.s. for a 51% equity interest in Geomet, the company’s Czech subsidiary and holder of the Cinovec licenses.
European Metals Managing Director, Keith Coughlan, said the investment will see the Cinovec project fully funded to the decision to construct, paving the way for it to become the first European Union producer of battery grade lithium compounds from a local lithium resource.
Mr Coughlan said the transaction is scheduled to complete on Monday, April 27, 2020, and the work programme will begin immediately.
“This is a very significant day in the life of the Cinovec Project. To have Europe’s largest hard rock lithium project fully funded to decision to construct ensures that Cinovec is firmly entrenched as the pre-eminent lithium deposit in Europe,” Mr Coughlan said.
“We are very pleased to be in partnership with CEZ in the development of the Cinovec Project. CEZ not only provide corporate, technical and financial strength, they fully share the company’s vision for the development of a lithium ion battery industry in Czech Republic.”
Mr Coughlan said that with the completion of the agreement with CEZ, Geomet will now immediately commence the Definitive Feasibility Study (DFS) and Front-End Engineering Design (FEED) programmes of work.
The funds contributed by CEZ will fully finance Geomet and Cinovec through the period to construction permitting and commencement of construction. The principal components of the next phase of work on Cinovec are the availability of management and staff, ore samples for test work and laboratory staff and time.
To-date, the Cinovec Project has drilled in excess of 13,800m of diamond drilling under the management of EMH. Extensive sample quantities are available from the resulting drill core as well as material recovered from historic adit drives into the ore body. Significant quantities of ore sample are held at our laboratory partners in Germany and at the project office in the Czech Republic.
“European Metals and Geomet have confirmed with our laboratory and engineering partners in Germany and Australia that staff and laboratories involved in the DFS and FEED programmes over the next three months are ready and open for work on an immediate basis,” Mr Coughlan said.
Headquartered in the Czech Republic, CEZ a.s. is an established, integrated energy group with operations in a number of Central and Southeastern European countries and Turkey. CEZ’s core business is the generation, distribution, trade in, and sales of electricity and heat, trade in and sales of natural gas, and coal extraction. CEZ Group has 33,000 employees and annual revenue of approximately EUR7.24 billion.
European Metals, through its wholly owned subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and 0.04% Sn and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O and 0.04% Sn containing a combined 7.22 million tonnes Lithium Carbonate Equivalent and 263kt of tin reported 28 November 2017
An initial Probable Ore Reserve of 34.5Mt at 0.65% Li2O and 0.09% Sn reported July 4, 2017 has been declared to cover the first 20 years mining at an output of 22,500tpa of lithium carbonate reported July 11, 2018.