REG - European Metals Hldg - Just Transition Fund Approves Cinovec Project

European Metals HoldingsAnnouncement

30/01/2023 07:01

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RNS Number : 2262O  European Metals Holdings Limited  30 January 2023

For immediate release

 

30 January 2023

EUROPEAN METALS HOLDINGS LIMITED

 

EUROPEAN UNION'S JUST TRANSITION FUND APPROVES CINOVEC AS A STRATEGIC PROJECT

 

European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY, ERPNF and
EMHLF) ("European Metals" or the "Company") is pleased to announce that the
Cinovec Project has been classified as a Strategic Project for the Usti Region
of the Czech Republic. The list of Strategic Projects has been approved by the
European Commission, the Czech Central Government and the Czech Regional
Goverment in Usti. Being classified as such means that the Cinovec Project has
priority for grant funding from the Just Transition Fund ("JTF") co-funding,
ahead of many other projects that have been submitted.

The total amount allocated by the Just Transition fund for the Czech Republic
is CZK 41B (€1.64B) of which the Usti region has been allocated CZK 15.8B
(approx. €632M).

The first call for grant applications under the JTF opened on 14 November 2022
and closes on 31 December 2023.

Given the total amount which may be applied for by the eleven designated
Strategic Projects in the Usti region in the first call is CZK 8.3B (approx
€350M) and that the funds allocated in this first call from the Just
Transition Fund to these Strategic Projects totals CZK7.3B (approx €300M),
although there can be no certainty,  the Company is confident that Cinovec
will receive a significant portion of the funds applied for from the JTF for
the Project.

The maximum funding to be made available upon application to each Strategic
Project in the Usti Region is CZK 1.2bn (approx €49M). The Cinovec Project
has been allocated the maximum possible JTF grant of CZK 1.2B (approx €49M),
subject to passing through the application process, funds remaining available
and obtaining the necessary permits for the early-stage Cinovec work
programmes to which this grant funding is planned to be applied to, in
particular the early full development of the twin decline entry/egress system
for the mine.

Accordingly, Geomet s.r.o (the Cinovec project company) will apply for JTF
Grant funding for the maximum amount of CZK 1.2B (approx  €49M).

Executive Chairman Keith Coughlan said:

"I am very pleased that the European Union via the Just Transition Fund has
approved the Cinovec Project as a Strategic Project for the Usti Region of the
Czech Republic.  This approval provides further evidence of strong support
from the Czech Government and the European Union and the Europe-wide
recognition of the critical part which the Cinovec Project will play in
enabling the EU to reach its stated goals of lithium self-sufficiency by 2030.

"The proposed grants from the Just Transition Fund could play an important
part in accelerating the development of the Cinovec Project. For example, the
initial entry into the deposit via twin declines and ancillary road network at
the proposed Dukla site are likely to be early-stage beneficiaries of this
funding. This could reduce the time until first ore is produced by the Cinovec
Project post final investment decision.  As the funding is in the form of a
non-repayable grant this could also have the additional benefit of not
diluting the existing shareholders of the Company.

"European Metals is well positioned for the rising demand in battery
materials, developing the Cinovec project, the largest hard rock lithium
project in the EU, which is centrally located on the Czech Republic's border
with Germany. The project possesses excellent ESG credentials which will
enable the production of battery grade lithium hydroxide and carbonate with
potentially one of the lowest CO(2) emissions, globally."

 

The Just Transition Fund

The fund is one of the elements of the European Union's Just Transition
Mechanism for a transition towards climate neutrality.

The Commission provides grants to Member States having identified the
territories expected to be the most negatively impacted by the green
transition.

The Just Transition Fund supports the economic diversification and
reconversion of the territories concerned. This means:

·      investments in Small and Medium-sized Enterprises

·      creation of new firms

·      research and innovation

·      environmental rehabilitation

·      clean energy

·      up- and reskilling of workers

·      job-search assistance

·      transformation of existing carbon-intensive installations

The approval of Cinovec as a Strategic Project does not mean the project will
automatically receive funding. The financial framework (max. limit) which can
be applied for in relation to the Cinovec Project is approximately EUR 49
million. The subsidy is not guaranteed. The JTF funds can only be drawn after
the sub-projects are approved within individual calls.  There is no assurance
that the project will get the necessary permits in time or that the relevant
authorities will approve the drawdown.

 

This announcement has been approved for release by the Board.

 

BACKGROUND INFORMATION ON CINOVEC

PROJECT OVERVIEW

Cinovec Lithium/Tin Project

Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech
State over the Cinovec Lithium/Tin 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 and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li(2)O and
0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li(2)O and 0.05%
Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and
335.1kt of tin (refer to the Company's ASX 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 and 0.09% Sn
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 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, the fifth
largest non-brine deposit in the world and a globally significant tin
resource.

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, conducted
by specialist independent consultants which, based upon the production of
29,386tpa of lithium hydroxide, indicates a post-tax NPV of USD1.938B and a
post-tax IRR of 36.3% and confirmed that the Cinovec Project is a potential
low operating cost producer of battery-grade lithium hydroxide or battery
grade lithium carbonate as markets demand. It confirmed the deposit is
amenable to bulk underground mining (refer to the Company's ASX 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 in addition to high-grade tin concentrate at excellent
recoveries. 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. As the deposit lies in an
active mining region, it has strong community support.

The economic viability of Cinovec has been enhanced by the recent strong
increase in demand for lithium globally, and within Europe specifically.

There are no other material changes to the original information and all the
material assumptions continue to apply to the forecasts.

 

BACKGROUND INFORMATION ON CEZ

Headquartered in the Czech Republic, CEZ a.s. is an established, integrated
energy group with operations in a number of Central and South-eastern
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 is one of the ten largest
energy companies in Europe, has more than 28,000 employees and annual revenue
of approximately EUR 9.53 billion.

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 capitalization is approximately EUR 18.3
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.

 

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.

WEBSITE

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

ENQUIRIES:

 European Metals Holdings Limited             Tel: +61 (0) 419 996 333

 Keith Coughlan, Executive Chairman           Email: keith@europeanmet.com

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

 David Koch, Company Secretary                Tel: +61 (0) 418 925 212

                                              Email: david@europeanmet.com

 WH Ireland Ltd (Nomad & Joint Broker)

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

 (Corporate Finance)

 Harry Ansell (Broking)

 Panmure Gordon (UK) Limited (Joint Broker)   Tel:  +44 (0) 20 7886 2500

 John Prior

 Hugh Rich

 James Sinclair Ford

 Harriette Johnson

 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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