MINEX Forum

Tag: Cinovec Project

  • EU Grants $36 Million to Advance Cinovec Lithium Project in Czech Republic

    EU Grants $36 Million to Advance Cinovec Lithium Project in Czech Republic

    The European Union has approved a $36 million grant to support the development of the Cinovec lithium project in the Czech Republic, marking a significant step in the bloc’s push to secure domestic supplies of critical raw materials.

    The funding, sourced from the EU’s Just Transition Fund, will be administered by the Czech Ministry of Environment and is conditional on the submission and approval of the project’s environmental impact assessment (EIA) by the end of 2025.

    European Metals Holdings (EMH), which holds a majority stake in the project, stated that the grant will accelerate key stages of development and may enable increased lithium output through improved economies of scale. EMH Executive Chairman Keith Coughlan noted that the funding would allow the company to “fast-track a number of critical path items” on the road to construction.

    Located in the Krusné Hory Mountains near the German border, Cinovec is the largest known hard rock lithium deposit in the EU. The project was designated as a Strategic Project under the EU Critical Raw Materials Act in March, and has also been recognized as a Strategic Deposit by the Czech government—two distinctions that are expected to streamline the permitting process and attract further institutional support.

    EMH has engaged engineering firm DRA Global Limited to complete a definitive feasibility study by the end of 2025. If environmental approval is secured, construction permits could follow within two years.

    In its latest financial update, EMH reported a cash balance of A$4.3 million and no debt as of the end of the first quarter. With Cinovec central to Europe’s ambitions for EV battery production and renewable energy storage, the EU’s financial backing is seen as a strategic investment in securing long-term raw material independence.

  • EBRD has agreed to invest €6 million to support the development of the Cinovec Project in the Czech Republic

    EBRD has agreed to invest €6 million to support the development of the Cinovec Project in the Czech Republic

    European Bank for Reconstruction and Development (EBRD) Strategic Investment: On July 21, 2023, European Metals Holdings Limited announced a strategic investment agreement with the European Bank for Reconstruction and Development (EBRD). EBRD has agreed to invest €6 million to support the development of the Cinovec Project in the Czech Republic.

    As part of the due diligence process, EBRD engaged an independent, international mining consultancy to undertake a technical review of the Cinovec Project. EBRD also performed a review of the Cinovec Project in respect to compliance with EBRD’s Environmental and Social Policy.

    Keith Coughlan, Executive Chairman, said: “The Company welcomes EBRD’s strategic investment, which is a strong endorsement of the Cinovec Project’s value and its commitment to the highest environmental and social standards. The EBRD investment aims to fund the project’s predevelopment work and opens a pathway to potentially securing project financing. The successful completion of the technical due diligence process is a testament to the quality of the Cinovec team, the work which has been done to date and a strong vote of confidence in the project.

    “The EBRD investment is confirmation that the Cinovec Project is a vital part of establishing a strong, sustainable European electric vehicle battery supply chain to support Europe’s accelerating transition to e-mobility.

    Natalia Lacorzana, Head of Natural Resources at EBRD said:

    “We are pleased to support the Cinovec project, the first lithium project financed by the Bank, on its path to become a responsibly mined source of battery grade lithium for Europe. EBRD is committed to supporting the global transition to a green economy, the move towards wider adoption of electric vehicles, in particular, via providing necessary funding and know-how to junior miners of critical and/or strategic raw materials.”

    The Company’s relationship with EBRD is expected to be highly strategic as the European Union charts a path towards greater lithium supply security and sustainability. Support for the Company’s lithium, tin and tungsten Cinovec Project aligns with these EU goals. The investment is to be implemented by way of a private placement of 12,315,213 shares of the Company to be issued to EBRD at a price of £0.423 per share (the “Placement”).2 Upon the closing of the Placement, EBRD will hold approximately 6% of the Company’s shares on issue (on a non-diluted basis).

    In connection with the Placement, European Metals and EBRD have an agreement whereby, subject to certain conditions, the EBRD has been granted rights that allow participation in future financings to maintain its pro rata equity interest in the Company. The agreements also provide for the Cinovec Project to be developed according to EBRD’s Environmental and Social Policy.

    The proceeds from the Placement will be used to assist in funding pre-development works and studies for the Cinovec Project including environmental works and working capital expenditures for the period up to the completion of the DFS. The Placement is subject to normal and customary conditions precedent for a transaction of this nature. The shares will be issued without shareholder approval utilising the Company’s existing placement capacity under ASX Listing Rule 7.1.