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European Metals Holdings

European Metals Holdings eyes further progress in the Czech Republic

Snapshot

Here we take a deep dive into the mechanics of European Metals Holdings PLC (LON:EMH) (ASX:EMH), which in the Cinovec project has a tiger by the tail

Drilling work at Cinovec

Quick facts: European Metals Holdings

Price: £0.17

Market: AIM
Market Cap: £26.01 m
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  • Owns Europe's largest lithium deposit
  • Mined and refined battery grade metal 
  • Preparing a definitive feasibility study 

What the company does

The company’s blurb describes European Metals Holdings PLC (LON:EMH) (ASX:EMH) as a UK and Australia-listed exploration business focused on developing a lithium and tin project in Czech Republic. But this doesn’t quite capture the potential of the business through its ownership of the Cinovec Project, host to the largest lithium resource in Europe and one of the biggest untapped tin deposits in the world. In other words EM has a tiger by the tail.

Cinovec is around 60 miles north-west of Prague on the border with Germany. So, it has ready access to end-users such as carmakers and companies building the latest generation of electric vehicles.

The deposit itself is host to an inferred and indicated resource of almost 700mln tonnes at a cut-off of 0.195% lithium and 0.04% tin.  A preliminary economic assessment (PEA) suggests an operation on the site of the historic mine churning out 22,500 tonnes a year of battery grade lithium would cost US$393mln.

Inflexion points

In a presentation last November, EM outlined its ‘key activities’ for the next 12 months.

These included:

  • Completing the drilling and upgrade resource model to include a measured resources to facilitate calculation of a proven ore reserve
  • Begin definitive feasibility (DFS) engineering
  • Progress environmental impact assessments for mining and processing.
  • Complete locked cycle test work and flowsheet optimisation
  • Operate pilot plant for production of marketing samples
  • Commence variability testwork
  • Progress strategic partner discussions

In April the company revealed it passed one of these landmarks having produced battery-grade lithium hydroxide from ore from the deposit. While it was only a small-scale trial, European Metals is confident it could achieve a potential production rate in excess of 25,000 tonnes per annum of lithium hydroxide.

“The clear majority of European battery producers are indicating a requirement for lithium input to be supplied as battery grade lithium hydroxide,” said managing director Keith Coughlan. “The fact that EM has now demonstrated the ability to produce this product from Cinovec ore is an exciting development that will enable the company to supply its final product into the European marketplace.”

Blue Sky

The DFS should copper-bottom what already looks like a potentially world-scale deposit. Meanwhile, European Metals said in March it remains confident that drilling underway at Cinovec will move significant resources into the indicated category. European Metals has reported results from five of the eight holes planned in the programme, which is part of work ongoing on the DFS.

However, a deal with a potential partner would provide third-party validation for the project and, of course, deliver the financial heft required to required to get the historic mine back into operation. There has been radio silence from a Czech group, which purportedly made an offer for Cinovec back in January.

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