European Metals Holdings

Operator: European Metals Holdings

Ownership (01/06/22): Approx. – 8.1% interest

Location:

Cinovec, Czech Republic

Development Stage:

Feasibility Ongoing

Background

European Metals Holdings (“EMH”) plan to sustainably supply 29,386 tpa lithium hydroxide into the European battery market –low cost, long term.

  • Size – 49% of the largest hard rock lithium resource in Europe, the 4th largest non-brine resource globally.
  • Cost – potential low-cost producer, the bottom of the cost curve
  • Location – in the hear of Europe within proximity to numerous potential end-users
  • Strategic Partnership – 51% CEZ partnership ensures the project is fully funded to the decision to construct.

Location

The Cinovec project is located 100 km NW from Prague on the border with Germany, situated in the heart of Europe with ready access to end-user car makers and companies involved in energy storage.

The project is close to large industrial and chemical plants with excellent support services in Czech and Germany, adjacent to the main road with two rail lines within 10km of the deposit.

Project

Cadence holds approximately 8.1% percent of the equity in European Metals, which, through its 49% owned subsidiary, Geomet s.r.o. (“Geomet”), controls the mineral exploration licenses awarded by the Czech State over Cinovec. CEZ a.s. owns 51% of Geomet.

  • The 2019 PFS Update for the Cinovec Project has been updated to demonstrate the effect of changes in the mining process to incorporate the use of paste backfill, which increases annual production, together with changes in lithium and by-product prices to reflect current and expected market conditions.

  • NPV8 (post-tax) increases from US$1.108B to US$1.938B, an increase of 74.9%, based upon a lithium hydroxide price of USD17,000 per tonne, which is significantly less than the current price.

  • Post-tax IRR of 36.3% and a payback period of 2.5 years from the commencement of production.

  • Up-front capital cost due to backfilling plant and additional capital costs to produce 29,386 tpa lithium hydroxide increased to US$644m.

  • This 2022 PFS Update assumes the life of mine extraction of 13.1% of the Measured and Indicated JORC Resources at Cinovec.

  • The use of tailings for backfill will result in a far more negligible environmental impact, further enhancing the project’s already strong ESG credentials.