European Metals Looks to Secure Lithium Supply for Europe's EV Demand

• European Metals has the largest hard rock lithium resource in Europe and is at DFS stage, targeting production of 25,000 tons per year of battery-grade lithium hydroxide.
• Lithium demand is growing rapidly, especially in Europe which aims to be 80% self-sufficient in lithium production by 2025. More M&A activity expected.
• European Metals has submitted its EIA, showing positive environmental impacts as it is re-entering an old underground mine. Also completed successful cycle tests for the DFS.
• Targeting FID in Q1 2023 after completing DFS. Exploring financing options including EU grants, soft debt, commercial debt, and some equity fundraising.
• Strong EU support expected due to commitments to develop domestic EV and battery industries and associated raw materials like lithium. European Metals believes this will facilitate financing despite current weaker markets.

About European Metals

European Metals Holdings Limited is a minerals exploration and development company focused on developing the Cinovec lithium-tin project in the Czech Republic. Cinovec is the largest hard rock lithium deposit in Europe and one of the largest undeveloped lithium resources in the world, with a total indicated mineral resource of 372.4 million tonnes at 0.45% Li2O and 0.04% Sn.

The company aims to develop Cinovec into a low cost, environmentally sustainable producer of lithium hydroxide to supply the rapidly growing electric vehicle and battery storage markets in Europe. European Metals has completed two pre-feasibility studies on the project, supporting potential production of up to 25,000 tonnes per annum of lithium hydroxide. The company is currently working towards completing a definitive feasibility study in early 2023.

European Metals is listed on the ASX and AIM and has a market capitalization of approximately A$190 million. The company is led by Executive Chairman Keith Coughlan and is partnered with 51% shareholder Czech electricity producer CEZ.

Interview with Keith Coughlan, Exec. Chairman of European Metals

Lithium Market Fundamentals Supporting Strong Demand

The lithium market continues to exhibit strong fundamentals, with rapidly growing demand from the electric vehicle and energy storage sectors. Major lithium producers such as Albemarle have indicated tightness in supply, supporting the need for new projects to come online.

European Metals’ Cinovec project is well positioned to benefit from surging European lithium demand, forecast to reach 300,000 tonnes per annum by 2030. This represents a significant opportunity for European Metals, as Cinovec would be the only European producer of battery-grade lithium chemicals.

Securing a localized source of lithium supply is a priority for Europe, with the EU targeting 80% self-sufficiency in lithium production by 2025. While an ambitious goal, this demonstrates the importance European policymakers are placing on developing a strong local battery supply chain.

Definitive Feasibility Study on Track for Early 2023

European Metals is advancing Cinovec towards a definitive feasibility study, expected to be completed in Q1 2023. This will build on the robust economics demonstrated in the project’s two completed pre-feasibility studies.

Recent metallurgical testwork has positively confirmed the process flowsheet, reaching the targeted recovery rates in fewer tests than initially planned. This provides further technical de-risking of the project as it moves into the definitive feasibility phase.

The company is also well progressed on baseline environmental studies needed to support project permitting. Submitting the environmental impact assessment earlier this year was a crucial step in securing the mining permits required to commence project development.

Funding Discussions Underway to Support Development

European Metals has approximately A$40 million in cash to fund activities through to completion of the definitive feasibility study. However, securing funding for the estimated US$500 million in capital expenditure required for project development is a key focus.

The company is engaged in ongoing discussions with potential debt providers and has support from the European Institute of Innovation and Technology to identify grant funding and export credit finance within the EU.

While some equity financing will be required, European Metals is expected to benefit from strong European financial support for critical minerals projects that will help facilitate debt financing on favorable terms.

Securing funding is the next milestone for Cinovec to ensure a smooth transition from the feasibility study into a final investment decision and start of construction.

Conclusion

With its advanced Cinovec lithium project, European Metals is poised to capitalize on surging lithium demand from Europe’s booming electric vehicle market. The company offers investors a unique exposure to European critical mineral supply chains that are rapidly developing to support energy transition policies.

The definitive feasibility study will provide the basis for investors to value the project based on the proven economics. While early stage funding discussions are promising, successful financing outcomes need to be demonstrated.

For investors bullish on European EV growth and desire local lithium chemical supply, European Metals presents an opportunity to invest in the only significant lithium resource on the continent. Realizing the strategic importance of Cinovec will strengthen European Metals’ funding and partner discussions as the project moves into development.