REG - European Metals Hldg - New Plant Site to Improve Project Permitting&Econ

European Metals HoldingsAnnouncement

25/04/2024 07:30

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RNS Number : 0056M  European Metals Holdings Limited  25 April 2024

For immediate release

25 April 2024

NEW LITHIUM PLANT SITE EXPECTED TO IMPROVE PROJECT ECONOMICS

Highlights

·      The Prunéřov site has been selected for the lithium processing
plant with the move expected to speed up the permitting process and expedite
the Cinovec Project.

·      The Prunéřov site is anticipated to also enable positive
outcomes for project economics including reductions in capex and opex per
tonne as a result of optimalization of the engineering identified as part of
the Definitive Feasibility Study ("DFS") process, and reduced demolition and
clearance requirements.

·      The new site has received preliminary agreement and support from
the municipal and regional governments.

·      Geomet will now proceed to finalise the DFS process taking into
account the new site, including the revised capex from the new site.

 

European Metals Holdings Limited (ASX & AIM: EMH) ("European Metals" or
the "Company") is pleased to announce the selection of a new site for the
Cinovec Lithium Processing Plant which is anticipated to provide improved
permitting and project economics.

The new site selection follows evaluation and preliminary agreement between
project company Geomet and the relevant municipal and regional governments to
move the lithium processing plant from Dukla to the Prunéřov industrial
site.

Prunéřov is the site of the former Prunéřov 1 Power Station, which was
decommissioned in 2020 and Prunéřov 2 Power Station. The site is owned and
operated by CEZ, the Company's project level partner.

The site, currently zoned for industrial use, is considerably larger in size
than the Dukla site and should enable the processing plant to be laid out in a
more effective (and anticipated less costly) manner, enabling better and
faster constructability.

The ore from the underground mining operation at Cinovec will be carried by
conveyor to Dukla where it will be loaded onto trains for transport to
Prunéřov, a distance of approximately 59 km using existing rail facilities,
the capacity of which has been confirmed.

During the DFS process, it became apparent that after considerable
consultation with local stakeholders and the municipal and regional
governments the Dukla site possessed limited capacity and also limited support
from the surrounding municipalities.

The Prunéřov industrial site is located alongside the 750MW Prunéřov 2
Coal fired power plant and is situated further away from inhabited areas.

Keith Coughlan, Executive Chairman, commented: "While providing a good outcome
for the surrounding communities, the decision to move the lithium processing
plant from the Dukla to the Prunéřov site is expected to have a positive
outcome on the capex and opex per tonne of the project due to the possibility
of quicker permitting process and more effective layout of the processing
plant.

As would be expected in such circumstances, we were unable to provide
information on this matter whilst a revised project configuration was being
formulated, due to social and environmental impact sensitivities and had to
defer the DFS until the details of the new site were agreed (refer to
Announcements dated: 27 March 2024 & 22 December 2023) (#_ftn1) . We will
now be instructing DRA Global and the DFS team to amend the DFS to take this
into account before we can provide DFS numbers.

We understand that a deferral to a DFS is usually considered a negative
matter, but in this case, we consider it to be for a positive result,
particularly as the Prunéřov site is currently home to the Prunéřov Power
Plant, and the permitting can now be advanced in a more timely manner with the
cooperation of the local, regional and federal governments.

What has been clear in this process is the importance placed on this project
by the community and Czech Government at all levels. In the European Union's
Critical Raw Materials Act ("CRMA") environment, the coming together of both
the Cinovec project joint venture partners and the Czech Government in the
decision-making process with regards of the selection of the Prunéřov site
provide a very strong foundation for our upcoming application for Strategic
Project status under the CRMA."

Ladislav Štěpánek, Chairman of the Board of Directors of Geomet, stated:
"Prunéřov is a suitable place for our project. It is an industrial location
at a greater distance from populated areas where a lignite power plant is
already operating. Building a processing plant in Prunéřov fulfils our
philosophy of coal transformation, as it would provide enough jobs for the
employees of the gradually closing coal mines and power plants located in the
vicinity. Only an ore loading facility will be built at the original site at
Dukla, from where we will transport the ore by rail to Prunéřov. I am glad
that we have found an agreement with the municipalities and the region and can
continue with the project at Prunéřov."

Jan Losenický, Mayor of Kadaň, added: "We welcome the plan of ČEZ and
Geomet to build a lithium plant in Prunéřov. People from our town who
currently work in coal-fired power plants or mines, but which will be
gradually downsized and closed, could find employment in the processing plant.
The investor has promised to invest in the training and retraining of current
employees so that they can be employed in the new sophisticated plant. We are
glad that ČEZ will not leave the region with the end of coal but will remain
one of the largest investors and employers in the region, also thanks to the
lithium park project.

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 capitalization 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 release that relates to the FECAB metallurgical testwork
is based on, and fairly reflects,  technical data and supporting
documentation compiled or supervised by Mr Walter Mädel, a full-time employee
of Geomet s.r.o an associate 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,
and fairly reflects, information and supporting documentation 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.

Information in this release that relates to metallurgical test work and the
process design criteria and flow sheets in relation to the LCP is based on,
and fairly reflects, information and supporting documentation compiled by Mr
Grant Harman (B.Sc Chem Eng, B.Com). Mr Harman is an independent consultant
and the principal of Lithium Consultants Australasia Pty Ltd with in excess of
14 years of lithium chemicals experience. Mr Harman 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 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 (mailto:shannon@europeanmet.com) @europeanmet.com

 WH Ireland Ltd (Nomad & Broker)

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

 Harry Ansell (Broking)

 Blytheweigh (Financial PR)

 Tim Blythe                                                       Tel: +44 (0) 20 7138 3222

 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.

 1  (#_ftnref1) Refer to Announcements dated: 27 March 2024 & 22 December
2023

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