REG - European Metals Hldg - Cinovec Project Update

European Metals HoldingsAnnouncement

27/03/2024 07:00

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RNS Number : 4375I  European Metals Holdings Limited  27 March 2024

For immediate release

27 March 2024

CINOVEC PROJECT UPDATE

European Metals Holdings Limited (ASX & AIM: EMH) ("European Metals" or
the "Company") is pleased to provide the following update for the Cinovec
Project.

Feasibility Study Update

Geomet, 49% owned by European Metals and the owner of 100% of the Cinovec
Lithium Project in the Czech Republic ("Cinovec" or the "Project"), is in the
process of completing the Project Definitive Feasibility Study ("DFS"). DRA
Global Limited ("DRA") was appointed to complete the DFS in February 2023.

The Company has previously advised in the announcement to the market on 22
December 2023 that the delivery of the DFS for the Project had been pushed
back and was expected to be completed in Q1 2024.

As a result of the engineering work and social and environmental engagement
work subsequently performed as part of the DFS process, several material
matters have been highlighted that may significantly improve the lithium
processing component of the DFS.

The Geomet management team, in conjunction with DRA Global, is reviewing these
matters. The Company expects to make a further announcement before the end of
April 2024 detailing some of the more significant issues. Further, the Company
reiterates that the process flowsheet remains as announced on 31 October 2022
and confirmed in pilot testing results announced on 9 November 2023.

This review process could significantly improve the economic and
social/community outcomes. Geomet considers this to be an important
development in the Project and makes a further delay in the DFS well
justified.

Importantly, as previously reported, the Company does not expect that the
extension of the study period will impact the overall Project timeline, with
the permitting process expected to be effectively coordinated pursuant to the
enactment of the European Union's Critical Raw Materials Act (see below).

In other matters concerning the DFS Process, EMH is pleased to announce that
previously published physical and hydrometallurgical process flowsheets have
been confirmed to be viable for engineering and construction purposes with
high levels of lithium recovery from run-of-mine ore to battery-grade
end-products.

As previously noted, engineering test work programmes continue to improve
process outcomes in various stages of both the physical and hydrometallurgical
processing, and current test work programmes include:

·      Gangue removal from zinnwaldite concentrate to enable a
higher-grade roast mix to be processed by the rotary kilns, thus maximising
the throughput of lithium units in the roasting without an increase in the
size of the plant;

·      recycling and regeneration of reagents in both the roasting and
hydrometallurgical stages to reduce the consumption of fresh reagents and
decrease opex per tonne of end-product, and

·      simplification of precipitation/crystallisation processes to
reduce energy and water costs, aiming at producing end-products with the
lowest economic carbon footprint.

Executive Chairman, Keith Coughlan, commented on the update: "Whilst it is
unfortunate not to be able to provide a fully completed DFS at this stage, I
am confident that the developments currently being finalised will add
significantly to the Project. In particular, permitting and timelines are
expected to be positively impacted by the team's additional work. The Cinovec
Project remains an important part of the drive to improve critical materials
security in the EU."

Permitting and the European Critical Raw Materials Act

The European Union's Critical Raw Materials Act (CRMA) has now been formally
adopted and will shortly enter into force. This is a significant development
for the Project in several ways. The CRMA will legislate for shorter and
simplified permitting processes for European critical raw materials extraction
projects.

In addition, the CRMA will provide the framework for the designation by the
European Commission and Member States of projects deemed "Strategic Projects".
Such designated projects will receive political and financial support to
enable the projects to reach production in the shortest timeframes possible,
contributing to the fulfilment of the green transition and affording the
European Union a degree of critical raw materials independence.

As Europe's largest hard-rock lithium mining and processing project, the
Cinovec Project is applying for and is expected to receive Strategic Project
designation under the CRMA. The Project has already been granted Strategic
Process status under the EU's Just Transition Fund.

This announcement has been approved for release by the Board.

CONTACT

For further information on this update or the Company generally, please visit
our website at www.europeanmet.com (http://www.europeanmet.com) or see full
contact details at the end of this release.

 

BACKGROUND INFORMATION ON CINOVEC

PROJECT OVERVIEW

Cinovec Lithium Project

Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech
State over the Cinovec Lithium Project. Geomet has been granted a preliminary
mining permit by the Ministry of Environment and the Ministry of Industry. The
company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned
subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium
deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li(2)O,
Indicated Mineral Resource of 360.2Mt at 0.44% Li(2)O and an Inferred Mineral
Resource of 294.7Mt at 0.39% Li(2)O containing a combined 7.39 million tonnes
Lithium Carbonate Equivalent (refer to the Company's ASX/AIM release dated 13
October 2021) (Resource Upgrade at Cinovec Lithium Project).

An initial Probable Ore Reserve of 34.5Mt at 0.65% Li(2)O reported 4 July 2017
(Cinovec Maiden Ore Reserve - Further Information) has been declared to cover
the first 20 years mining at an output of 22,500tpa of lithium carbonate
(refer to the Company's ASX/AIM release dated 11 July 2018) (Cinovec
Production Modelled to Increase to 22,500tpa of Lithium Carbonate).

This makes Cinovec the largest hard rock lithium deposit in Europe and the
fifth largest non-brine deposit in the world.

The deposit has previously had over 400,000 tonnes of ore mined as a trial
sub-level open stope underground mining operation.

On 19 January 2022, EMH provided an update to the 2019 PFS Update. It
confirmed the deposit is amenable to bulk underground mining (refer to the
Company's ASX/AIM release dated 19 January 2022) (PFS Update delivers
outstanding results). Metallurgical test-work has produced both battery-grade
lithium hydroxide and battery-grade lithium carbonate at excellent recoveries.
In February 2023 DRA Global Limited ("DRA") was appointed to complete the
Definitive Feasibility Study ("DFS").

Cinovec is centrally located for European end-users and is well serviced by
infrastructure, with a sealed road adjacent to the deposit, rail lines located
5 km north and 8 km south of the deposit, and an active 22 kV transmission
line running to the historic mine. The deposit lies in an active mining
region.

The economic viability of Cinovec has been enhanced by the recent push for
supply security of critical raw materials for battery production, including
the  strong increase in demand for lithium globally, and within Europe
specifically, as demonstrated by the European Union's Critical Raw Materials
Act (CRMA).

 

BACKGROUND INFORMATION ON CEZ

Headquartered in the Czech Republic, CEZ a.s. is one of the largest companies
in the Czech Republic and a leading energy group operating in Western and
Central Europe. 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. The foundation of power generation at CEZ Group are emission-free
sources. The CEZ strategy named Clean Energy for Tomorrow is based on
ambitious decarbonisation, development of renewable sources and nuclear
energy. CEZ announced that it would move forward its climate neutrality
commitment by ten years to 2040.

The largest shareholder of its parent company, CEZ a.s., is the Czech
Republic with a stake of approximately 70%. The shares of CEZ a.s. are traded
on the Prague and Warsaw stock exchanges and included in the PX and WIG-CEE
exchange indices. CEZ's market capitalisation is approximately EUR 20.3
billion.

As one of the leading Central European power companies, CEZ intends to develop
several projects in areas of energy storage and battery manufacturing in the
Czech Republic and in Central Europe.

CEZ is also a market leader for E-mobility in the region and has installed and
operates a network of EV charging stations throughout Czech Republic. The
automotive industry in the Czech Republic is a significant contributor to GDP,
and the number of EV's in the country is expected to grow significantly in the
coming years.

COMPETENT PERSONS

Information in this announcement relating to the FECAB metallurgical testwork
is based on technical data compiled or supervised by Mr Walter Mädel, a
full-time employee of Geomet s.r.o a subsidiary of the Company. Mr Mädel is a
member of the Australasian Institute of Mining and Metallurgy (AUSIMM) and a
mineral processing professional with over 27 years of experience in
metallurgical process and project development, process design, project
implementation and operations. Of his experience, at least 5 years have been
specifically focused on hard rock pegmatite Lithium processing development. Mr
Mädel consents to the inclusion in the announcement of the matters based on
this information in the form and context in which it appears. Mr Mädel is a
participant in the long-term incentive plan of the Company.

Information in this release that relates to exploration results is based on
information compiled by Dr Vojtech Sesulka. Dr Sesulka is a Certified
Professional Geologist (certified by the European Federation of Geologists), a
member of the Czech Association of Economic Geologist, and a Competent Person
as defined in the JORC Code 2012 edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr
Sesulka has provided his prior written consent to the inclusion in this report
of the matters based on his information in the form and context in which it
appears. Dr Sesulka is an independent consultant with more than 10 years
working for the EMH or Geomet companies. Dr Sesulka does not own any shares in
the Company and is not a participant in any short- or long-term incentive
plans of the Company.

Mr Grant Harman (B.Sc Chem Eng, B.Com) is an independent consultant with in
excess of 7 years of lithium chemicals experience. Mr Harman supervised and
reviewed the metallurgical test work and the process design criteria and flow
sheets in relation to the LCP. Mr Harman is a participant in the long-term
incentive plan of the Company.

The information in this release that relates to Mineral Resources and
Exploration Targets is based on, and fairly reflects, information and
supporting documentation prepared by Mr Lynn Widenbar. Mr Widenbar, who is a
Member of the Australasian Institute of Mining and Metallurgy and a Member of
the Australasian Institute of Geoscientists, is a full-time employee of
Widenbar and Associates and produced the estimate based on data and geological
information supplied by European Metals. Mr Widenbar has sufficient experience
that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity that he is undertaking to qualify as a
Competent Person as defined in the JORC Code 2012 Edition of the Australasian
Code for Reporting of Exploration Results, Minerals Resources and Ore
Reserves. Mr Widenbar has provided his prior written consent to the inclusion
in this report of the matters based on his information in the form and context
that the information appears. Mr Widenbar does not own any shares in the
Company and is not a participant in any short- or long-term incentive plans of
the Company.

The Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market
announcement and, in the case of estimates of Mineral Resources or Ore
Reserves, that all material assumptions and technical parameters underpinning
the estimates in the relevant market announcement continue to apply and have
not materially changed. The Company confirms that the form and context in
which the Competent Person's findings are presented have not been materially
modified from the original market announcement.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Information included in this release constitutes forward-looking statements.
Often, but not always, forward looking statements can generally be identified
by the use of forward looking words such as "may", "will", "expect", "intend",
"plan", "estimate", "anticipate", "continue", and "guidance", or other similar
words and may include, without limitation, statements regarding plans,
strategies and objectives of management, anticipated production or
construction commencement dates and expected costs or production outputs.

Forward looking statements inherently involve known and unknown risks,
uncertainties and other factors that may cause the company's actual results,
performance, and achievements to differ materially from any future results,
performance, or achievements. Relevant factors may include, but are not
limited to, changes in commodity prices, foreign exchange fluctuations and
general economic conditions, increased costs and demand for production inputs,
the speculative nature of exploration and project development, including the
risks of obtaining necessary licences and permits and diminishing quantities
or grades of reserves, political and social risks, changes to the regulatory
framework within which the company operates or may in the future operate,
environmental conditions including extreme weather conditions, recruitment and
retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the company and its management's good
faith assumptions relating to the financial, market, regulatory and other
relevant environments that will exist and affect the company's business and
operations in the future. The company does not give any assurance that the
assumptions on which forward looking statements are based will prove to be
correct, or that the company's business or operations will not be affected in
any material manner by these or other factors not foreseen or foreseeable by
the company or management or beyond the company's control.

Although the company attempts and has attempted to identify factors that would
cause actual actions, events or results to differ materially from those
disclosed in forward looking statements, there may be other factors that could
cause actual results, performance, achievements or events not to be as
anticipated, estimated or intended, and many events are beyond the reasonable
control of the company. Accordingly, readers are cautioned not to place undue
reliance on forward looking statements. Forward looking statements in these
materials speak only at the date of issue. Subject to any continuing
obligations under applicable law or any relevant stock exchange listing rules,
in providing this information the company does not undertake any obligation to
publicly update or revise any of the forward looking statements or to advise
of any change in events, conditions or circumstances on which any such
statement is based.

LITHIUM CLASSIFICATION AND CONVERSION FACTORS

Lithium grades are normally presented in percentages or parts per million
(ppm). Grades of deposits are also expressed as lithium compounds in
percentages, for example as a percent lithium oxide (Li(2)O) content or
percent lithium carbonate (Li(2)CO(3)) content.

Lithium carbonate equivalent ("LCE") is the industry standard terminology for,
and is equivalent to, Li(2)CO(3). Use of LCE is to provide data comparable
with industry reports and is the total equivalent amount of lithium carbonate,
assuming the lithium content in the deposit is converted to lithium carbonate,
using the conversion rates in the table included below to get an equivalent
Li(2)CO(3) value in percent. Use of LCE assumes 100% recovery and no process
losses in the extraction of Li(2)CO(3) from the deposit.

Lithium resources and reserves are usually presented in tonnes of LCE or Li.

The standard conversion factors are set out in the table below:

Table: Conversion Factors for Lithium Compounds and Minerals

 Convert from                   Convert to Li  Convert to Li(2)O  Convert to Li(2)CO(3)  Convert to LiOH.H(2)O
 Lithium            Li          1.000          2.153              5.325                  6.048
 Lithium Oxide      Li(2)O      0.464          1.000              2.473                  2.809
 Lithium Carbonate  Li(2)CO(3)  0.188          0.404              1.000                  1.136
 Lithium Hydroxide  LiOH.H(2)O  0.165          0.356              0.880                  1.000
 Lithium Fluoride   LiF         0.268          0.576              1.424                  1.618

 

WEBSITE

A copy of this announcement is available from the Company's website at
www.europeanmet.com/announcements/ (http://www.europeanmet.com/announcements/)
.

ENQUIRIES:

 European Metals Holdings Limited

 Keith Coughlan, Executive Chairman           Tel: +61 (0) 419 996 333

                                              Email: keith@europeanmet.com (mailto:keith@europeanmet.com)

 Kiran Morzaria, Non-Executive Director       Tel: +44 (0) 20 7440 0647

 Henko Vos, Company Secretary                 Tel: +61 (0) 400 550 042

                                              Email: cosec@europeanmet.com (mailto:cosec@europeanmet.com)

 WH Ireland Ltd (Nomad & Broker)

 James Joyce / Darshan Patel / Isaac Hooper   Tel: +44 (0) 20 7220 1666

 (Corporate Finance)

 Harry Ansell (Broking)

 Blytheweigh (Financial PR)                   Tel: +44 (0) 20 7138 3222

 Tim Blythe

 Megan Ray

 Chapter 1 Advisors (Financial PR - Aus)

 David Tasker                                 Tel: +61 (0) 433 112 936

The information contained within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulation (EU) No.
596/2014 ("MAR") as it forms part of UK domestic law by virtue of the European
Union (Withdrawal) Act 2018 and is disclosed in accordance with the Company's
obligations under Article 17 of MAR.

 

The person who authorised for the release of this announcement on behalf of
the Company was Keith Coughlan, Executive Chairman.

 

 

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