Rare Earth Minerals (LON:REM OTC:REMMY) has raised its stake in the Cinovec lithium deposit in the Czech Republic to 19.8% by bumping up its stake in owner European Metals.
Rare Earth increased its stake by taking part in a placing by the Australian and AIM-listed EMH (LON:EMH ASX:EMH) that raised just over £912,000.
The additional 7.9% stake cost Rare Earth £670,000.
European Metals owns 100% of the exploration rights to Cinovec and will use the money for a drilling campaign to upgrade current inferred resources into the indicated category.
At present, Cinovec has 5.5mln tonnes (Mt) of lithium carbonate equivalent at a grade of 0.43% Li2O.
There is also an exploration target of a further 3.4Mt to 5.3Mt of lithium carbonate plus a potential 187,000 tonnes of tin as a by-product and some tungsten
A scoping study showed potential production costs of approximately of US$1,500 per tonne lithium carbonate any excluding tin and tungsten credits.
Andrew Suckling, REM’s chairman, said: “We have now built significant equity positions in major lithium deposits in both central Europe and northern Mexico, both these project have the potential to be large low cost producers supplying the fast growing lithium battery market.”
A pre-feasibility assessment published this week indicated a net present value of US$776mln (post-tax US$542mln) and an internal rate of return of 29% (post-tax 25%).
That was based on production of up to 35,000 tonnes a year of battery grade lithium carbonate from Sonora’s deposit of 5mln tonnes of lithium.
Its mine life of 20 years would also make the Mexico-based site a major global lithium producer.