European Metals (ASX: EMH) reported its shareholders have approved the investment by Czech energy group CEZ of €29.1 million (A$49.3 million) for a 51% interest in the company’s Cinovec lithium-tin project in the Czech Republic.
That money will fully fund Cinovec to the decision-to-construct stage.
European Metals said the approval paves the way for Cinovec to become the first European Union producer of battery-grade lithium compounds from a local lithium source.
The transaction will be completed on 27 April, and the work program, including definitive feasibility study and front-end engineering, will begin immediately.
CEZ is an integrated energy group with operations in a number of countries in central and south-eastern European countries, and also in Turkey.
It generates and sells electricity and heat and natural gas, and mines coal.
CEZ plans to develop energy storage and battery manufacturing in the Czech Republic and central Europe.
Europe’s largest hard rock lithium project
European Metals managing director Keith Coughlan said the financing for this stage firmly entrenched Cinovec — Europe’s largest hard rock lithium project — as the pre-eminent lithium deposit on the continent.
“CEZ not only provide corporate, technical and financial strength, they fully share the company’s vision for the development of a lithium-ion battery industry in the Czech Republic,” he said.
Mr Coughlin added that all management of staff at European Metals and its Czech subsidiary Geomet are unaffected by the COVID-19 virus.
The present restrictions on travel and meetings are not expected to have any impact for the foreseeable future, with all staff able to continue working remotely.
Test work produces battery grade product
European Metals has so far completed 13,800m of diamond drilling at Cinovec.
Cinovec hosts an indicated resource of 372.4 million tonnes at 0.45% lithium oxide and 0.04% tin, as announced in 2017.
There is also an inferred resource of 323.5Mt at 0.39% lithium oxide and 0.04% tin, making for a combined contained resource of 7.22Mt of lithium carbon equivalent and 263,000t of tin.
An estimated probable ore reserve of 34.5Mt published three years ago would cover the first 20 years mining at an output of 22,500t per year of lithium carbonate.
Additionally, metallurgical test work has produced both battery grade lithium hydroxide and battery grade lithium carbonate, in addition to high-grade tin concentrates.
European Metals said the tin resource is “globally significant.”