European Metals Holdings Limited: Environmental Impact Assessment Submitted - Measured Resource Drilling Update

European Metals Holdings Limited (ASX & AIM: EMH, NASDAQ: ERPNF) (“European Metals” or the “Company”) is pleased to announce that the Cinovec Project company Geomet s.r.o has submitted the documentation related to the initial EIA notification to the Czech Ministry of the Environment.

The Company also provides the latest results from its current nineteen-hole resource drilling programme at the Cinovec Project.  The current programme of work was announced by the Company on 10 August 2020 (Measured Resource Drilling Commenced). Drilling of seventeen of the nineteen holes has been completed and the eighteenth hole is currently underway.  Analytical results for another six of the drill holes from the Cinovec South deposit are reported in this release.

European Metals Executive Chairman Keith Coughlan said:

“We are pleased to report that submission of the EIA to the Czech Government fulfills a critical path item in relation to finalising the approval for the Cinovec mine.  We anticipate that the process will enable European Metals and its JV partner CEZ to actively engage with the relevant stakeholders to ensure that all affected parties are consulted and all viewpoints are actively considered. 

With regard to the drill results, we advise that the interim results of the current drilling programme at Cinovec are either in line with, or better than our expectations. The primary purpose of the programme is to convert a larger portion of the resource to the measured category to provide greater certainty of the financial model and security to the financiers we are currently in discussions with. It is important to note that the first stage of the ore processing, the wet magnetic separation, has the effect of greatly increasing the grade of lithium oxide in the concentrate to approximately 2.85%. 

The zinnwaldite concentrate produced from Cinovec requires only roasting, compared to the calcination and roasting required of processing spodumene.  This will have the effect of considerably reducing greenhouse gas emissions of the Project when compared to spodumene projects.”

ENVIRONMENTAL IMPACT ASSESSMENT

The Submission of the EIA to the Czech Ministry of the Environment officially initiates the environmental impact assessment process of the Cínovec project. The Ministry of Environment has launched a two-month screening procedure, including the notification of all concerned stakeholders. During this time, the Ministry will assess the submitted documentation, comments of all stakeholders in the proceedings and decide whether it will be necessary for European Metals to prepare additional studies. Following European and Czech environmental legislation the submission also includes an independent expert assessment of Natura 2000 (the European Union’s network of nature protection areas) which concluded that there is no negative impact on proximate nature reserves or any other sites of natural importance.

MEASURED RESOURCE DRILLING UPDATE

Given the relative ease of beneficiation of the Cinovec deposit through wet magnetic separation, the Company decided that it was important to report the drill results and the “in lab” beneficiation results.  As reported to the market on 21 October 2016 (Outstanding Lithium Recoveries at Coarse Grind) wet magnetic separation (“WMS”) achieved a >80% pure lithium mica concentrate grading 2.85% Li2O with a lithium recovery of 92%. 

Results:

-          Resource drill holes CIS-24, CIS-25, CIS-26, CIS-28, CIS-29 and CIS-30 have been completed including analytical reports.

-          Resource drill holes CIS-15, CIS-16, CIS-17, CIS-27and CIS-32 have been drilled with analytical results pending.

-          Drilling of resource hole CIS-33 is currently underway.

-          Hole CIS-24 returned 66.5m averaging 0.56% Li2O, incl. 6.7m @ 0.93% Li2O, and 20m @ 0.13% Sn.

-          Hole CIS-25 returned 88.2m averaging 0.60% Li2O and 0.17% Sn, incl. 21.4m @ 0.73% Li2O and 0.46% Sn.

-          Hole CIS-26 returned 84.6m averaging 0.49% Li2O and 0.09% Sn.

-          Hole CIS-28 returned 86.3m averaging 0.51% Li2O, incl. 5.25m @ 0.97% Li2O.

-          Hole CIS-29 returned 70.8m averaging 0.52% Li2O, incl. 3.1m @ 0.99% Li2O, and 2m @ 0.99% Li2O.

-          Hole CIS-30 returned 66.2m averaging 0.49% Li2O and 0.13% Sn, incl. 3.5m @ 1.31% Li2O, 0.42% Sn and 0.155% W, 1m @ 2.3% Li2O, 0.59% Sn and 0.327% W, and 4.45m @ 0.85% Sn.

The current drill programme has been planned to define blocks of resource for the first 5 years of mining within the Cinovec-South area, with a goal to convert the resource from indicated to measured category. The holes have been terminated in ore consistent with the aim of targeting the first 5 years of resource blocks for the mine.

MINERALISED INTERCEPTS AND LITHOLOGY

All holes, CIS-24, CIS-25, CIS-26, CIS-28, CIS-29 and CIS-30, are collared in over-lying rhyolite.  Rhyolite / granite contact was achieved at a depth of 167.8m in CIS-24, 198.1m in CIS-25, 203.4m in CIS-26, 185.8m in CIS-28, 185.7m in CIS-29 and 217.05m in CIS-30. Below the contact variably altered Li-granite was intersected, whilst the dominant alteration style is medium to intensive greisenization with several greisen zones observed. Li mineralization starts immediately beneath the contact, albeit in some of the holes, Li grades are slightly below cut-off.

Li intercepts from the six holes (see details in tables below):

CIS-24 intersected

-          66.5m averaging 0.56% Li2O, from 219 to 285.5m

•    incl. 6.7m @ 0.93% Li2O, from 250.7 to 257.4m

-          CIS-25 intersected

-          88.2m averaging 0.60% Li2O, from 207.8 to 296m

o incl. 1.55m @ 0.92% Li2O, from 218.35 to 219.9m

o incl. 3.2m @ 0.97% Li2O, from 226 to 229.2m

o incl. 2m @ 1.13% Li2O, from 257 to 259m

CIS-26 intersected

-          84.6m averaging 0.49% Li2O, from 208 to 292.6m

o incl. 2.3m @ 1.14% Li2O, from 216.8 to 219.1m

o incl. 4.7m @ 0.74% Li2O, from 251.3 to 256m

o incl. 4m @ 0.87% Li2O, from 267 to 271m

CIS-28 intersected

-          86.3m averaging 0.51% Li2O, from 212.5 to 298.8m

• incl. 5.25m @ 0.97% Li2O, from 290.7 to 295.95m

CIS-29 intersected

-          5.4m averaging 0.28% Li2O, from 192.6 to 198m

-       70.8m averaging 0.52% Li2O, from 203.2 to 274m

• incl. 3.1m @ 0.99% Li2O, from 218.5 to 221.6m
• incl. 2m @ 0.99% Li2O, from 267.25 to 269.25m

CIS-30 intersected

-          66.2m averaging 0.49% Li2O, from 233 to 299.2m

• incl. 3.5m @ 1.31% Li2O, from 263 to 266.5m
• incl. 1m @ 2.3% Li2O, from 263.5 to 264.5m

All of the six holes intersected significant tin mineralization. The best intercept was gained from the hole CIS-25 with 21.4m averaging 0.46% Sn, incl. high-grade zones of 5.2m @ 1.25% Sn and 2.2m @ 1.85% Sn. If no cut-off is considered, the upper portion of the hole CIS-25 is elevated in tin with 56.2m averaging 0.22% Sn.

The hole CIS-26 intersected multiple tin zones, the best of them returned 9.3m @ 0.1% Sn, 6 m @ 0.21% Sn, or 2m @ 0.35%. Considering no Sn cut-off, the main Li interval of 84.6m returned 0.09% Sn.

In the hole CIS-24 the tin mineralised intersection of 50 m averaging 0.13% has been recorded. 

Also, the upper section of the hole CIS-29 is elevated in tin. The main Li interval of 70.8m returned 0.11% Sn (no Sn cut-off considered), incl. multiple tin zones of 7.7m @ 0.29% Sn, 3.35m @ 0.57% Sn, 2m @ 0.18% Sn or 1.85m @ 0.21% Sn.

Similar situation was observed in the hole CIS-30. The tin zones intersected are as follows: 4.45m @ 0.85% Sn (incl. 0.85m @ 3.58% Sn), 2.9m @ 0.13% Sn and 2m @ 0.69% Sn. Regarding no Sn cut-off, the main Li intercept returned 0.13% Sn.

The hole CIS-28 intersected two tin zones of 3.1m @ 0.36% Sn and 4m @ 0.24% Sn. The main Li interval is elevated in tin, averaging 0.05% Sn.

The intervals were calculated at a 0.2% Li2O, 0.1% Sn and 0.05% W cut-offs, with a maximum internal waste of 4m.

All six holes have been terminated in Li ore and not in the underlaying low-mica granite which is considered to be the footwall of the Li-granite.

Table 1: Completed and planned drill hole data

Table 2: Mineralised intercepts in hole CIS-24.

Table 3: Mineralised intercepts in hole CIS-25.

Table 4: Mineralised intercepts in hole CIS-26.

Table 5: Mineralised intercepts in hole CIS-28.

Table 6: Mineralised intercepts in hole CIS-29.

Table 7: Mineralised intercepts in hole CIS-30.

This announcement has been approved for release by the Board.

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 s.r.o. is owned 49% by European Metals and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and 0.04% Sn and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O and 0.04% Sn containing a combined 7.22 million tonnes Lithium Carbonate Equivalent and 263kt of tin reported 28 November 2017 (Further Increase in Indicated Resource at Cinovec South). An initial Probable Ore Reserve of 34.5Mt at 0.65% Li2O 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 reported 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 fourth 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.

In June 2019 EMH completed an updated Preliminary Feasibility Study, conducted by specialist independent consultants, which indicated a return post tax NPV of USD1.108B and an IRR of 28.8%  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. 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 Southeastern European countries and Turkey. CEZ’s core business is the generation, distribution, trade in, and sales of electricity and heat, trade in and sales of natural gas, and coal extraction. CEZ Group has 33,000 employees and annual revenue of approximately EUR 7.24 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 10.08 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 Czech is a significant contributor to GDP and the number of EV’s in the country is expected to grow significantly in coming years.

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.

COMPETENT PERSON

Information in this release that relates to exploration results is based on information compiled by Dr Pavel Reichl. Dr Reichl is a Certified Professional Geologist (certified by the American Institute of Professional Geologists), a member of the American Institute of Professional Geologists, a Fellow of the Society of Economic Geologists and is a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and a Qualified Person for the purposes of the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009. Dr Reichl consents to the inclusion in the release of the matters based on his information in the form and context in which it appears. Dr Reichl holds CDIs in European Metals.

The information in this release that relates to Mineral Resources and Exploration Targets has been compiled by Mr Lynn Widenbar. Mr Widenbar, who is a Member of the Australasian Institute of Mining and Metallurgy, is a full time employee of Widenbar and Associates and produced the estimate based on data and geological information supplied by European Metals. Mr Widenbar has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the JORC Code 2012 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Mr Widenbar consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Information included in this release constitutes forward-looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, and “guidance”, or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the company and its management’s good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company’s business and operations in the future. The company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the company’s business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company’s control.

Although the company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

LITHIUM CLASSIFICATION AND CONVERSION FACTORS

Lithium grades are normally presented in percentages or parts per million (ppm). Grades of deposits are also expressed as lithium compounds in percentages, for example as a percent lithium oxide (Li2O) content or percent lithium carbonate (Li2CO3) content.

Lithium carbonate equivalent (“LCE”) is the industry standard terminology for, and is equivalent to, Li2CO3. Use of LCE is to provide data comparable with industry reports and is the total equivalent amount of lithium carbonate, assuming the lithium content in the deposit is converted to lithium carbonate, using the conversion rates in the table included below to get an equivalent Li2CO3 value in percent. Use of LCE assumes 100% recovery and no process losses in the extraction of Li2CO3 from the deposit.

Lithium resources and reserves are usually presented in tonnes of LCE or Li.

The standard conversion factors are set out in the table below:

Table: Conversion Factors for Lithium Compounds and Minerals

WEBSITE

A copy of this announcement is available from the Company’s website at www.europeanmet.com.

ENQUIRIES:

European Metals Holdings Limited

Keith Coughlan, Executive Chairman

Tel: +61 (0) 419 996 333

Email: [email protected]

Kiran Morzaria, Non-Executive Director

Tel: +44 (0) 20 7440 0647

Dennis Wilkins, Company Secretary 

Tel: +61 (0) 417 945 049

Email: [email protected]

WH Ireland Ltd (Nomad & Joint Broker)

James Joyce/James Sinclair-Ford

(Corporate Finance)

Harry Ansell/Jasper Berry (Broking)

Tel: +44 (0) 20 7220 1666

Shard Capital (Joint Broker)

Damon Heath

Erik Woolgar

Tel:  +44 (0) 20 7186 9950

Blytheweigh (Financial PR)

Tim Blythe

Megan Ray

Tel: +44 (0) 20 7138 3222

Chapter 1 Advisors (Financial PR – Aus)

David Tasker

Tel: +61 (0) 433 112 936

The information contained within this announcement is considered to be inside information, for the purposes of Article 7 of EU Regulation 596/2014, prior to its release.  The person who authorised for the release of this announcement on behalf of the Company was Keith Coughlan, Executive Chairman.