For
immediate release
25 April
2024
NEW LITHIUM PLANT SITE
EXPECTED TO IMPROVE PROJECT ECONOMICS
Highlights
· The Prunéřov site has been selected for the lithium processing plant with
the move expected to speed up the permitting process and expedite
the Cinovec Project.
· The Prunéřov site is anticipated to also enable positive outcomes for
project economics including reductions in capex and opex per tonne
as a result of optimalization of the engineering identified as part
of the Definitive Feasibility Study ("DFS") process,
and reduced demolition and clearance requirements.
· The
new site has received preliminary agreement and support from the
municipal and regional governments.
· Geomet
will now proceed to finalise the DFS process taking into account
the new site, including the revised capex from the new
site.
European Metals Holdings Limited (ASX & AIM:
EMH) ("European
Metals" or the
"Company") is pleased to announce the selection
of a new site for the Cinovec Lithium Processing Plant which is
anticipated to provide improved permitting and project
economics.
The new site selection follows
evaluation and preliminary agreement between project company Geomet
and the relevant municipal and regional governments to move the
lithium processing plant from Dukla to the Prunéřov industrial
site.
Prunéřov is the site of the former
Prunéřov 1 Power Station, which was decommissioned in 2020 and
Prunéřov 2 Power Station. The site is owned and operated by CEZ,
the Company's project level partner.
The site, currently zoned for
industrial use, is considerably larger in size than the Dukla site
and should enable the processing plant to be laid out in a more
effective (and anticipated less costly) manner, enabling better and
faster constructability.
The ore from the underground mining
operation at Cinovec will be carried by conveyor to Dukla where it
will be loaded onto trains for transport to Prunéřov, a distance of
approximately 59 km using existing rail facilities, the capacity of
which has been confirmed.
During the DFS process, it became
apparent that after considerable consultation with local
stakeholders and the municipal and regional governments the Dukla
site possessed limited capacity and also limited support from the
surrounding municipalities.
The Prunéřov industrial site is
located alongside the 750MW Prunéřov 2 Coal fired power plant and
is situated further away from inhabited areas.
Keith Coughlan, Executive Chairman,
commented: "While providing a
good outcome for the surrounding communities, the decision to move
the lithium processing plant from the Dukla to the
Prunéřov
site is expected to have a positive outcome on the
capex and opex per tonne of the project due to the possibility of
quicker permitting process and more effective layout of the
processing plant.
As
would be expected in such circumstances, we were unable to provide
information on this matter whilst a revised project configuration
was being formulated, due to social and environmental impact
sensitivities and had to defer the DFS until the details of the new
site were agreed (refer to Announcements dated: 27 March 2024 &
22 December 2023). We will now be instructing DRA
Global and the DFS team to amend the DFS to take this into account
before we can provide DFS numbers.
We
understand that a deferral to a DFS is usually considered a
negative matter, but in this case, we consider it to be for a
positive result, particularly as the Prunéřov site is currently home to the Prunéřov Power Plant, and the permitting can now be advanced in a more
timely manner with the cooperation of the local, regional and
federal governments.
What has been clear in this process is the importance placed
on this project by the community and Czech Government at all
levels. In the European Union's Critical Raw Materials Act
("CRMA")
environment, the coming together of both the Cinovec project joint
venture partners and the Czech Government in the decision-making
process with regards of the selection of the
Prunéřov
site provide a very strong foundation for
our upcoming application for Strategic Project status under the
CRMA."
Ladislav Štěpánek, Chairman of the
Board of Directors of Geomet, stated: "Prunéřov is a suitable place for our
project. It is an industrial location at a greater distance from
populated areas where a lignite power plant is already operating.
Building a processing plant in Prunéřov fulfils our philosophy of
coal transformation, as it would provide enough jobs for the
employees of the gradually closing coal mines and power plants
located in the vicinity. Only an ore loading facility will be built
at the original site at Dukla, from where we will transport the ore
by rail to Prunéřov. I am glad that we have found an agreement with
the municipalities and the region and can continue with the project
at Prunéřov."
Jan Losenický, Mayor of Kadaň,
added: "We welcome the plan of
ČEZ and Geomet to build a lithium plant in Prunéřov. People from
our town who currently work in coal-fired power plants or mines,
but which will be gradually downsized and closed, could find
employment in the processing plant. The investor has promised to
invest in the training and retraining of current employees so that
they can be employed in the new sophisticated plant. We are glad
that ČEZ will not leave the region with the end of coal but will
remain one of the largest investors and employers in the region,
also thanks to the lithium park project.
This announcement has been approved
for release by the Board.
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.
BACKGROUND INFORMATION ON CINOVEC
PROJECT OVERVIEW
Cinovec Lithium Project
Geomet s.r.o. controls the mineral
exploration licenses awarded by the Czech State over the Cinovec
Lithium Project. Geomet has been granted a preliminary mining
permit by the Ministry of Environment and the Ministry of Industry.
The company is owned 49% by EMH and 51% by CEZ a.s. through its
wholly owned subsidiary, SDAS. Cinovec hosts a globally significant
hard rock lithium deposit with a total Measured Mineral Resource of
53.3Mt at 0.48% Li2O, Indicated Mineral Resource of
360.2Mt at 0.44% Li2O and an Inferred Mineral Resource
of 294.7Mt at 0.39% Li2O containing a combined 7.39
million tonnes Lithium Carbonate Equivalent (refer to the Company's ASX/AIM release dated
13 October 2021)
(Resource Upgrade at
Cinovec Lithium Project).
An initial Probable Ore Reserve of 34.5Mt at
0.65% Li2O 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 (refer to the Company's ASX/AIM release dated
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 and the fifth largest non-brine deposit
in the world.
The deposit has previously had over 400,000
tonnes of ore mined as a trial sub-level open stope underground
mining operation.
On 19 January 2022, EMH provided an update to
the 2019 PFS Update. It confirmed the deposit is amenable to bulk
underground mining (refer to the Company's ASX/AIM release dated 19
January 2022) (PFS Update delivers outstanding results).
Metallurgical test-work has produced both battery-grade lithium
hydroxide and battery-grade lithium carbonate at excellent
recoveries. In February 2023 DRA Global Limited ("DRA") was
appointed to complete the Definitive Feasibility Study
("DFS").
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. The deposit lies in an active mining
region.
The economic viability of Cinovec has been
enhanced by the recent push for supply security of critical raw
materials for battery production, including the strong increase in
demand for lithium globally, and within Europe specifically, as
demonstrated by the European Union's Critical Raw Materials Act
(CRMA).
BACKGROUND INFORMATION ON
CEZ
Headquartered in the Czech Republic,
CEZ a.s. is one of the largest companies in the Czech Republic and
a leading energy group operating in Western and Central Europe.
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. The foundation of power
generation at CEZ Group are emission-free sources. The CEZ
strategy named Clean Energy for Tomorrow is based on ambitious
decarbonisation, development of renewable sources and nuclear
energy. CEZ announced that it would move forward its climate
neutrality commitment by ten years to 2040.
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 20.3 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 the Czech Republic is a significant contributor to GDP,
and the number of EV's in the country is expected to grow
significantly in the coming years.
COMPETENT PERSONS
Information in this release that
relates to the FECAB metallurgical testwork is based on, and fairly
reflects, technical data and supporting documentation
compiled or supervised by Mr Walter Mädel, a full-time employee of
Geomet s.r.o an associate of the Company. Mr Mädel is a member of
the Australasian Institute of Mining and Metallurgy (AUSIMM) and a
mineral processing professional with over 27 years of experience in
metallurgical process and project development, process design,
project implementation and operations. Of his experience, at least
5 years have been specifically focused on hard rock pegmatite
Lithium processing development. Mr Mädel consents to the inclusion
in the announcement of the matters based on this information in the
form and context in which it appears. Mr Mädel is a
participant in the long-term incentive plan of the
Company.
Information in this release that
relates to exploration results is based on, and fairly reflects,
information and supporting documentation compiled by Dr Vojtech
Sesulka. Dr Sesulka is a Certified Professional Geologist
(certified by the European Federation of Geologists), a member of
the Czech Association of Economic Geologist, and a Competent Person
as defined in the JORC Code 2012 edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves. Dr Sesulka has provided his prior written consent to the
inclusion in this report of the matters based on his information in
the form and context in which it appears. Dr Sesulka is an
independent consultant with more than 10 years working for the EMH
or Geomet companies. Dr Sesulka does not own any shares in the
Company and is not a participant in any short- or long-term
incentive plans of the Company.
Information in this release that
relates to metallurgical test work and the process design criteria
and flow sheets in relation to the LCP is based on, and fairly
reflects, information and supporting documentation compiled by Mr
Grant Harman (B.Sc Chem Eng, B.Com). Mr Harman is an independent
consultant and the principal of Lithium Consultants Australasia Pty
Ltd with in excess of 14 years of lithium chemicals experience. Mr
Harman has provided his prior written consent to the inclusion in
this report of the matters based on his information in the form and
context that the information appears. Mr Harman is a participant in
the long-term incentive plan of the Company.
The information in this release that
relates to Mineral Resources and Exploration Targets is based on,
and fairly reflects, information and supporting documentation
prepared by Mr Lynn Widenbar. Mr Widenbar, who is a Member of the
Australasian Institute of Mining and Metallurgy and a Member of the
Australasian Institute of Geoscientists, 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 has provided his prior written consent to the
inclusion in this report of the matters based on his information in
the form and context that the information appears. Mr Widenbar does
not own any shares in the Company and is not a participant in any
short- or long-term incentive plans of the Company.
The Company confirms that it is not
aware of any new information or data that materially affects the
information included in the original market announcement and, in
the case of estimates of Mineral Resources or Ore Reserves, that
all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and
have not materially changed. The Company confirms that the form and
context in which the Competent Person's findings are presented have
not been materially modified from the original market
announcement.
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
|
Convert from
|
|
Convert to Li
|
Convert to Li2O
|
Convert to Li2CO3
|
Convert to LiOH.H2O
|
|
Lithium
|
Li
|
1.000
|
2.153
|
5.325
|
6.048
|
|
Lithium Oxide
|
Li2O
|
0.464
|
1.000
|
2.473
|
2.809
|
|
Lithium Carbonate
|
Li2CO3
|
0.188
|
0.404
|
1.000
|
1.136
|
|
Lithium Hydroxide
|
LiOH.H2O
|
0.165
|
0.356
|
0.880
|
1.000
|
|
Lithium Fluoride
|
LiF
|
0.268
|
0.576
|
1.424
|
1.618
|
WEBSITE
A copy of this
announcement is available from the Company's website at
www.europeanmet.com/announcements/.
ENQUIRIES:
|
European Metals Holdings Limited
Keith Coughlan, Executive
Chairman
Kiran Morzaria, Non-Executive
Director
Henko Vos, Company
Secretary
|
Tel: +61 (0) 419 996 333
Email: keith@europeanmet.com
Tel: +44 (0) 20 7440 0647
Tel: +61 (0) 400 550 042
Email: cosec@europeanmet.com
|
|
WH
Ireland Ltd (Nomad & Broker)
James Joyce / Darshan Patel / Isaac
Hooper (Corporate Finance)
Harry Ansell (Broking)
|
Tel: +44 (0) 20 7220 1666
|
|
Blytheweigh (Financial PR)
Tim Blythe
Megan Ray
Chapter 1 Advisors (Financial PR - Aus)
David Tasker
|
Tel: +44 (0) 20 7138 3222
Tel: +61 (0) 433 112
936
|
|
|
|
The information contained within
this announcement is deemed by the Company to constitute inside
information under the Market Abuse Regulation (EU) No. 596/2014
("MAR") as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 and is disclosed in accordance
with the Company's obligations under Article 17 of MAR.