TIDMEMH
RNS Number : 7807G
European Metals Holdings Limited
21 July 2023
For immediate release
21 July 2023
European Bank for Reconstruction and Development
EUR6m Strategic Investment
Highlights:
- The European Bank for Reconstruction and Development (" EBRD
") has agreed to invest EUR 6 million to support the Company's
development of the Cinovec Project in the Czech Republic.
- ERBD's investment and expertise will be beneficial to the
Company as the Cinovec Project moves through permitting, project
financing, and completing its Definitive Feasibility Study (" DFS
").
- As part of its due diligence, EBRD engaged an independent,
international mining consultancy to conduct a technical review of
the Cinovec Project.
- EBRD is an International Financial Institution owned by the
European Union, European Investment Bank and 71 countries,
including the Czech Republic.
- The investment is to be implemented by way of a private
placement of 12,315,213 shares of the Company to be issued to EBRD
at a price of GBP0.423 per share (the " Placement "). This equates
to AUD 0.803 per share. [1]
European Metals Holdings Limited ( ASX & AIM: EMH, OTCQX:
EMHXY, ERPNF and EMHLF ) (" European Metals " or the " Company ")
is pleased to announce the entry into a strategic investment
agreement under which EBRD has agreed to invest EUR6 million to
support the Company's development of the Cinovec Project in the
Czech Republic.
As part of the due diligence process, EBRD engaged an
independent, international mining consultancy to undertake a
technical review of the Cinovec Project. EBRD also performed a
review of the Cinovec Project in respect to compliance with EBRD's
Environmental and Social Policy.
Keith Coughlan, Executive Chairman, said:
"The Company welcomes EBRD's strategic investment, which is a
strong endorsement of the Cinovec Project's value and its
commitment to the highest environmental and social standards. The
EBRD investment aims to fund the project's predevelopment work and
opens a pathway to potentially securing project financing. The
successful completion of the technical due diligence process is a
testament to the quality of the Cinovec team, the work which has
been done to date and a strong vote of confidence in the
project.
"The EBRD investment is confirmation that the Cinovec Project is
a vital part of establishing a strong, sustainable European
electric vehicle battery supply chain to support Europe's
accelerating transition to e-mobility.
Natalia Lacorzana, Head of Natural Resources at EBRD said:
"We are pleased to support the Cinovec project, the first
lithium project financed by the Bank, on its path to become a
responsibly mined source of battery grade lithium for Europe. EBRD
is committed to supporting the global transition to a green
economy, the move towards wider adoption of electric vehicles, in
particular, via providing necessary funding and know-how to junior
miners of critical and/or strategic raw materials."
The Company's relationship with EBRD is expected to be highly
strategic as the European Union charts a path towards greater
lithium supply security and sustainability. Support for the
Company's lithium, tin and tungsten Cinovec Project aligns with
these EU goals. The investment is to be implemented by way of a
private placement of 12,315,213 shares of the Company to be issued
to EBRD at a price of GBP0.423 per share (the " Placement "). [2]
Upon the closing of the Placement, EBRD will hold approximately 6 %
of the Company's shares on issue (on a non-diluted basis).
In connection with the Placement, European Metals and EBRD have
an agreement whereby, subject to certain conditions, the EBRD has
been granted rights that allow participation in future financings
to maintain its pro rata equity interest in the Company. The
agreements also provide for the Cinovec Project to be developed
according to EBRD's Environmental and Social Policy.
The proceeds from the Placement will be used to assist in
funding pre-development works and studies for the Cinovec Project
including environmental works and working capital expenditures for
the period up to the completion of the DFS.
The Placement is subject to normal and customary conditions
precedent for a transaction of this nature. The shares will be
issued without shareholder approval utilising the Company's
existing placement capacity under ASX Listing Rule 7.1.
About the European Bank for Reconstruction and Development
The EBRD is an international financial institution established
in 1991 to foster the economic transition process and to promote
private and entrepreneurial initiative in its countries of
operations including Central and Eastern Europe, former Soviet
Union and Eastern Mediterranean through provision of loans, equity
investments, conducting policy dialogue and providing technical
cooperation. It has since played a transformative role and gained
unique expertise in fostering change in the region - and beyond -
investing EUR170 billion in more than 6,400 projects including
nearly EUR 3bn in some 70 mining projects across 15 countries of
operation.
This announcement has been approved for release by the Company's
Board.
CONTACT
For further information on this update or the Company generally,
please visit our website at www.europeanmet.com or see full contact
details at the end of this release.
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
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 electri city
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
28,000 employees and annual revenue of approximately EUR 9.97
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 17.7 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.
ENQUIRIES:
European Metals Holdings Limited
Keith Coughlan, Executive Chairman Tel: +61 (0) 419 996 333
Email: keith@europeanmet.com
Kiran Morzaria, Non-Executive Director Tel: +44 (0) 20 7440 0647
Shannon Robinson, Company Secretary Tel: +61 (0) 418 675 845
Email: shannon@europeanmet.com
WH Ireland Ltd (Nomad & Broker)
James Joyce / Darshan Patel / Isaac Tel: +44 (0) 20 7220 1666
Hooper
(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) Tel: +61 (0) 433 112 936
David Tasker
[1] The issue price was calculated by reference to the volume
weighted average trading price of the Company's shares on the AIM
on the five trading days preceding the date of signing of the
Subscription Agreement.
[2] The issue price was calculated by reference to the volume
weighted average trading price of the Company's shares on the AIM
on the five trading days preceding the date of signing of the
Subscription Agreement.
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END
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