European Metals Holdings Limited (LON:EMH, ASX:EMH) has declared a maiden ore reserve for the Cinovec lithium-tin deposit in the Czech Republic alongside a A$2mln interim funding package that will “maintain momentum” behind the project.
The reserve comes in at 34.5mln tonnes of ore grading 0.65% lithium oxide.
Managing director Keith Coughlan called it “another significant step in the development of the largest lithium resource in Europe”.
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The company is also sitting on an indicated and inferred resource of 656mln tonnes at 0.43%.
In the same announcement, European Metals said it has appointed country manager Richard Pavlik to the board, replacing the departing Pavel Reichl.
In an update on financing negotiations, the mine developer said it was confident of landing long-term funding for Cinovec.
Pending the conclusion of talks it has agreed a draw-down facility with 6466 Investments Pty Ltd, which is described as a “sophisticated investor”.
Funding helps with DFS
Funds drawn down from the facility will convert into a form of equity called a CDI at a 10% discount to the 10-day volume average weighted price of the European Metals shares.
The money will be used bankroll the continued preparation of the definitive feasibility study of Cinovec (which will provide the blue print for the development of the mine).
The preliminary feasibility indicated Cinovec can produce 20,800 tonnes of lithium carbonate annually for 21 years at a cost of US$3,483 per tonne.
Total capital cost would be US$393mln, with the return over the mine’s life over and above this outlay (net present value) estimated at US$540mln.