European Metals Holdings (LON:EMH)

European Metals Holdings (LON:EMH)


Share Price
22.38 p
Change
0.375 (1.70 %)
Market Cap
£32.81 m
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European Metals Holdings

European Metals Holdings is listed on the Australian Securities Exchange and the London Stock Exchange.

EPIC: EMH
Market: AIM:EMH
ASX:EMH
52-week High/Low: 26.500p / 15.000p
Sector: General Mining
Market Cap: £32.81 m
Website: www.europeanmet.com
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Big Picture – A Deep Dive Examination of European Metals Holdings


European Metals Holdings Snapshot

European Metals Holdings Limited is an Australian and UK listed mineral exploration and development company advancing the Cinovec Lithium / Tin Project in Czech Republic.

Cinovec Lithium / Tin Project

Cinovec hosts the largest lithium resource in Europe, and one of the largest undeveloped tin resources in the World. The recently completed Preliminary Feasibility Study indicates that Cinovec has the potential to be the lowest cost hard rock lithium producer in the World.

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

History

The Cinovec Project is located in the Krusne Hore Mountains which divide the Czech Republic from the Saxony State of Germany. The project is within a historic mining region, with artisanal mining dating back to the 1300s.

In the 1940s a large underground mining operation was established primarily to produce tungsten for the war effort. Mining and processing activities continued under the Czechoslovakian Government with the mine continuing to expand and producing tin as well as tungsten. Due to the fall of communism and lower tin prices, the mine was closed in 1993. In 2000, the old processing plant was removed and the site rehabilitated.

Project

In 2012, European Metals purchased a 100% interest in the exploration rights to the Cinovec Project area together with an extensive database, and commenced a drilling campaign to validate the comprehensive data generated by the earlier development and exploration activities.

The Company’s ongoing drilling programme has completed 30 diamond holes each averaging 400 m depth, successfully validating earlier drilling results, adding lithium grade data and providing metallurgical testwork samples.

In support of the PFS, European Metals has undertaken extensive metallurgical testwork at UVR and Anzaplan in Germany as well as Nagrom and ALS in Australia.

In 2015, European Metals completed a Scoping Study into the redevelopment of the Cinovec Project. The Scoping Study highlighted that the size, grade and location of the deposit make it a very attractive development opportunity and recommended that project proceed through to a Preliminary Feasibility Study (PFS).

The results of the PFS highlight that the Cinovec Project has the potential to be the lowest cost hard rock operation globally due to a number of unique advantages:

·       By-product credits of tin, tungsten and potash;

·       Ore is amenable to single stage crushing and coarse SAG milling, reducing capital and operating costs, whilst reducing complexity;

·       Iron content of zinnwaldite allows for cheap wet magnetic processing to produce a lithium concentrate for further processing at high recoveries;

·       Low temperature roasting and reagent recycling;

·       Low cost access to extensive infrastructure and low cost grid power;

·       Local workforce - high skilled and low cost of employment;

·       Historic mining and chemical plant region – strong support by the local community for job creation in areas that have both historic and current operations;

·       The deposit lies in a stable jurisdiction that is located centrally to the rapidly expanding electric vehicle industry which is forecast to be the main driver behind increasing lithium consumption; and

·       Established and transparent mining code.

Geology

Regional Geology of Krusne hory/Erzgebirge

Cinovec deposit is located on the Krusne hory/Erzgebirge metallogenic province at the northern border of the Bohemian Massif, in the Saxothuringian Zone of European Variscides (Štemprok 1989). Krusne hory/Erzgebirge is one of the major metamorphic crystalline complexes of the European Variscan Belt, and is formed by partially concealed Late Palaeozoic multiphase granitic batholith intruding amphibolite facies Neoproterozoic to Carboniferous age metamorphic complex (Seltmann and Štemprok 1995).

Regional Geology of the European Variscan Belt

The Krusne Hory/Erzgebirge NE–SW trending anticlinorium extends over 120km in length and 45km in width, and plunges slightly to the southwest. The Erzgebirge crystalline complex exposes a seemingly coherent sequence of migmatite, para-and orthogneiss, mica schist containing intercalations of metabasalt, metarhyolite and marble, and by phyllite (Klominsky et al. 2010), and magmatic rocks.

Neoproterozoic basement rocks are represented by migmatitic gneiss and mica schist with abundant intercalated metamorphosed marl, dolomite, calc-silicate rock, quartzite, ultramafic and granulitic rocks which were migmatised and granitised during the Variscan orogeny. The overlying Lower Paleozoic sequence comprises marine clastic (mainly pelitic) and granitic rocks, which are transgressively overlain by Lower Devonian clastic rocks. Middle Devonian clastic rocks and carbonate with interbedded submarine spilite­keratophyre volcanics are followed by the Carboniferous Culm facies (Seltmann and Štemprok 1995).

Regional Geology of the Krusne hory/Erzgebirge

Magmatic rocks within the massif are related to events that occurred in several time periods; the Archean to Paleoproterozoic, the Late Neoproterozoic to Lower Paleozoic Cadomian/Baikalian Orogenies (700 to 500 Ma), the Lower Paleozoic Caledonian Orogeny (500 to 390 Ma) and the Late Paleozoic Variscan Orogeny (350 to 300 Ma). Variscan magmatism is divided into an early cycle (orthogneiss) and a quantitatively dominant late or post-kinematic cycle (unfoliated granites), (Seltmann and Štemprok 1995). The latest magmatic event was extension-related volcanism and emplacement shallow small intrusions of Li-enriched granite.

Deposit

The Cinovec Deposit extends for approximately 2km south of the border. The below Long Section shows the shallower, higher grade lithium mineralisation to the north and the tin rich area of Cinovec South. As evident from the table of selected drill intercepts, the lithium mineralisation is in place over 350m wide.

Resource

Cinovec is an historic mine incorporating a significant undeveloped lithium-tin resource with by-product potential including tungsten, rubidium, scandium, niobium and tantalum and potash. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 348Mt @ 0.45% Li2O and 0.04% Sn and an Inferred Mineral Resource of 309Mt @ 0.39% Li2O and 0.04% Sn containing a combined 7.0 million tonnes Lithium Carbonate Equivalent and 263kt of tin. This makes Cinovec the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource. See Table 1 below.

In addition to this Mineral Resource, there is a JORC compliant Lithium Exploration Target of 350 to 450 Mt @ 0.39% to 0.47% for 3.4 Mt to 5.3 Mt of LCE.  

Dave Reeves
Chairman

Dave is a qualified mining engineer with 20 years’ experience in Africa and Australia. He is a highly experienced underground mining specialist with a first class honours degree in mining engineering from the University of New South Wales and a graduate diploma in applied finance and investment from the Securities Institute of Australia and a Western Australian first class mine managers certificate of competency.

Dave is currently the Managing Director of ASX listed Calidus Resources Limited and AIM listed Keras Resources, which are Australian Gold and Togo Manganese exploration and mining companies.

Dave is a member of the Audit & Risk, Remuneration and Nomination Committees.

 

Keith Coughlan
Managing Director

Keith has almost 30 years’ experience in stockbroking and funds management. He has been largely involved in the funding and promoting of resource companies listed on the ASX, AIM and TSX. He has advised various companies on the identification and acquisition of resource projects and was previously employed by one of Australia’s then largest funds.

Until recently, Keith was the Non–Executive Chairman of ASX listed Talga Resources Limited.  He is currently a Non-Executive Director of Calidus Resources Limited and a Non-Executive Director of Southern Hemisphere Mining Limited.

Keith is a member of the Audit & Risk and Nomination Committees.

 

Richard Pavlik
Executive Director

Richard is the General Manager of Geomet s.r.o., the Company’s wholly owned Czech subsidiary, and is a highly experienced Czech mining executive. He holds a Masters Degree in Mining Engineer from the Technical University of Ostrava in Czech Republic. He is the former Chief Project Manager and Advisor to the Chief Executive Officer at OKD. OKD has been a major coal producer in the Czech Republic. He has almost 30 years of relevant industry experience in the Czech Republic.

Richard also has experience as a Project Analyst at Normandy Capital in Sydney as part of a postgraduate programme from Swinburne University. He has held previous senior positions within OKD and New World Resources as Chief Engineer, and as Head of Surveying and Geology. He has also served as the Head of the Supervisory Board of NWR Karbonia, a Polish subsidiary of New World Resources (UK) Limited. He has an intimate knowledge of mining in the Czech Republic.

 

Kiran Morzaria
Non-Executive Director

Kiran is currently Chief Executive Officer and Director of the Company’s largest shareholder, Cadence Minerals.

Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School. He has extensive experience in the mineral resource industry working in both operational and management roles.  Kiran spent the first four years of his career in exploration, mining and civil engineering before obtaining his MBA.  He has served as a director of a number of public companies in both an executive and non-executive capacity.

Kiran is the Chair of the Audit & Risk Committee and a member of the Remuneration Committee.

 

Julia Beckett, CSA(Cert)
Company Secretary

Julia holds a Certificate in Governance Practice and Administration and is a Certificated Member of the Governance Institute of Australia.

Julia is a corporate governance professional, having worked in corporate administration and compliance for the past 10 years. She has been involved in business acquisitions, mergers, initial public offerings and capital raisings, as well as statutory and financial reporting.

Julia is currently Company Secretary of Ragnar Metals Limited, Calidus Resources Ltd and Doriemus PLC.

 

Neil Meadows
Chief Operating Officer

Neil has previously held the positions of Chief Operating Officer at Karara Mining Ltd, Managing Director of IMX Resources Limited and worked with the Australian Premium Iron Ore Joint Venture on mine infrastructure.  Prior to that, he was the Chief Operating Officer of Queensland Nickel Pty Ltd, subsequent to the sale of the business by BHP.  Neil was also previously the General Manager at the Murrin Operation for Minara Resources Ltd, a position he held for almost five years.

Neil holds a Masters of Applied Science in Metallurgy from the South Australian Institute of Technology, and was the recipient of the Mine Manager of the Year Award through the Sydney Mining Club in 2007.  He was the Australasian Institute of Mining and Metallurgy North Queensland Resources Industry Professional of the Year in 2009.  His technical qualifications are supported by a Graduate Diploma of Business Administration from Charles Sturt University, along with a Diploma from the Australian Institute of Company Directors.

 

Grant Harman
Metallurgical Consultant

Grant is one of the world’s foremost lithium metallurgists and he’s played a significant role in the Company’s successful PFS.

Grant was previously Manager Lithium Chemicals for Talison Lithium and was involved in the management of the Talison Lithium Carbonate Plant from Scoping Study to Definitive Feasibility Study. He was involved in the design and technical direction of the Talison Test Facility and has more recently been a technical consultant on the Sonora Lithium Project in Mexico.

Grant has had previous roles with UGL, SNC Lavalin, CleanTeq and Ausenco.

 

Dr Pavel Reichl
Geological Consultant

Pavel has over 15 years’ experience in precious, base and PGE metals exploration and production and has a PhD from University of Montana.

Pavel was formerly Business Unit Manager of a Canadian listed minerals exploration company responsible for Europe and Central Asia.  He was the former head of the Newmont acquisition program in Eastern Europe and exploration manager for Kyrgyzstan and Uzbekistan.

Pavel is fluent in English, Czech and Russian.

Significant Shareholders

 
Name        CDIs % of CDIs

Cadence Minerals Plc 

JP Morgan Nominees Australia Limited

ARMCO Barriers Pty Ltd *

Mr Keith Coughlan **

28,096,470

22,860,478

14,795,500

9,350,000

19.16

15.59

10.09

6.38

     
     
 

Director Shareholdings

 
Name CDIs % of CDIs
Mr Keith Coughlan (held directly & indirectly) 9,350,000 6.38
Mr David Reeves (held directly & indirectly) 4,020,244 2.74
Mr Kiran Morzaria (held directly & indirectly) 28,296,470 19.83
Mr Richard Pavlik (held directly) 300,000 0.21

 

Australia

European Metals Holdings Limited
Suite 12, Level 1, 11 Ventnor Avenue
West Perth WA 6005
Postal: PO Box 1240, West Perth WA 6872
Telephone: + 61 (08) 6245 2050
Facsimile: + 61 (0) 8 6141 3599
Email: [email protected]

Czech Republic

Geomet s.r.o
Jaselska 193/10, Veveri
602 00 Brno
Czech Republic
Telephone: +420 602 537 390

Australia 
Everest Corporate Pty Ltd 
Suite 12, 11 Ventnor Avenue
WEST PERTH WA 6005
AUSTRALIA

UK Nominated Adviser and Broker
Beaumont Cornish Limited
10th Floor
30 Crowne Place
LONDON EC2A 4EB
UNITED KINGDOM

Shard Capital Partners LLP (Joint Broker)
23rd Floor
20 Fenchurch Street
LONDON EC3M 3BY
UNITED KINGDOM

Solicitor to the Company as to Australian Law
Steinereis Paganin
Level 4, The Read Building
16 Milligan Street
PERTH  WA  6000
AUSTRALIA

UK Solicitor
White & Case LLP
5 Old Broad Street
LONDON EC2N 1DW
UNITED KINGDOM

BVI Solicitor
Maples and Calder
Sea Meadow House
PO Box 174, Road Town
TORTOLA  VC1110
BRITISH VIRGIN ISLANDS

Czech Solicitor
White & Case (Europe) LLP
Na Prikope
14110 00
PRAGUE 1
CZECH REPUBLIC

Share Register - Australia
Computershare Investor Services Limited
Level 11, 172 St Georges Terrace
PERTH  WA  6000

UK Depository
Computershare Investor Services PLC
The Pavilions
Bridgewater Road
BRISTOL  BS99 6ZZ
UNITED KINGDOM

Auditor

Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
WEST PERTH WA 6005
AUSTRALIA

Reporting Accountants (UK)
Chapman Davis LLP
2 Chapel Court
LONDON SE1 1HH
UNITED KINGDOM

Competent Person
Wardell Armstrong International Limited
Wheal Jane
Baldhu, Truro
CORNWALL TR3 6EH
UNITED KINGDOM

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