Germany-focused Zinnwald Lithium (LON: ZNWD) experienced a significant increase in its shares on Friday after announcing a 50% boost in the mineral resource estimate for its flagship project in Saxony. The lithium producer, which had initially forecasted an annual production of 12,000 tonnes, now expects to produce 16,000 to 18,000 tonnes of battery-grade lithium per annum.
This update positions Zinnwald as the second largest hard rock lithium project in the European Union and the third largest in Europe by resource size and contained lithium. Europe's largest hard rock lithium deposit is the Cinovec lithium project in the Czech Republic, owned by European Metals (ASX, LON: EMH) and state-controlled utility CEZ.
In response to the updated assessment, Zinnwald announced plans to conduct a pre-feasibility study (PFS) to enhance the expanded project and explore potential for a second production phase. This study will also focus on minimizing environmental and community impact while evaluating technical test work and trade-offs. Chief executive officer Anton du Plessis stated that the PFS is expected to be completed in the first quarter of 2025. "We have already completed many workstreams, with several more underway or nearing completion," du Plessis said. "Key upcoming milestones include ongoing metallurgical testwork, detailed mine planning, permitting, and commercial activities."
While Zinnwald is in a secure financial position, it is seeking support from the German federal and state governmentsafter receiving an invitation in June to apply for grant funding. If successful, 70% of the funding will come from the federal government, with the remaining 30% from the State of Saxony, which has already shown support for the battery-chain project.
Located approximately 35km from Dresden, in the heart of Europe’s chemical and car industries, the project is expected to produce battery-grade lithium carbonate, lithium hydroxide, and lithium fluoride (Li2CO3, LiOH, LiF) or a combination of these products.
Despite a dramatic drop in lithium prices over the past 18 months due to slowing growth in electric vehicle sales and market oversupply, Zinnwald Lithium’s stock rose nearly 5% following the announcement, trading at 8.2p near closing time. This increase leaves the company with a market capitalization of £38.84 million ($50.4m).
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