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European Metals Holdings: THE INVESTMENT CASE

European Metals Holdings moving ahead with globally significant Cinovec lithium project

European Metals Holdings is rapidly moving forward with Europe's largest and most significant lithium project
European Metals Holdings moving ahead with globally significant Cinovec lithium project
INVESTMENT OVERVIEW: EMH The Big Picture
Lithium drill core from Cinovec

Infill drilling continues to provide reassurance about quality of Cinovec

Recent infilling drilling undertaken by European Metals Holdings Limited (LON:EMH) on the Cinovec lithium deposit in the Czech Republic has yielded encouraging results.

A total of just under 2,700 metres was completed across six drill holes, and one of them returned one of the best intercepts the company has ever hit: 204.6 metres averaging 0.44% Li2O, including 70 metres at 0.58% Li2O, 13 metres at 19% tin and some tungsten.

European Metals chief executive Keith Coughland called the results “excellent” and explained that the new data will be used to enable the company to move more of the inferred resource up into the indicated category.

A definitive feasibility study is currently in the works.

Cinovec a globally significant hard rock lithium deposit

There’s already plenty to work with, though. As it stands, the indicated  resource is 348 mln tonnes grading 0.45% Li2O and 0.04% tin, supported by an inferred resource of 309 mln tonnes at 0.39% Li2O and 0.04% tin.

That adds up to a combined seven mln tonnes Lithium Carbonate Equivalent and 263,000 tonnes of tin.

What’s more, there’s also an initial probable ore reserve of 34.5 mln tonnes at 0.65% Li2O and 0.09% tin, which should cover the first 20 years mining at an output of 20,800 tonnes per year of lithium carbonate.

This makes Cinovec the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource.

Economic case for development looks favourable

As a trial, over 400,000 tonnes of ore has already been mined from underground at Cinovec. This work has helped support the findings of a preliminary feasibility study, which demonstrated the economic viability of the project, specifically that it offers a post-tax NPV of US$540 mln and an internal rate of return of 21%.

Metallurgical test work has produced both battery grade lithium carbonate and high-grade tin concentrate at excellent recoveries.

Prime location should support development decision

Cinovec is situated just across the border from Southern Germany, a region where much of Europe’s car manufacture takes place.

As the auto industry accelerates its conversion to electric cars, spurred on by the Volkswagen emissions scandal, a secure and local source of lithium is likely to become crucial. Furthermore, as the deposit lies in an active mining region, it has strong community support. 

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