European Metals Hldg - Final Agreement with CEZ for Investment in Cinovec
For immediate release
FINAL AGREEMENT WITH CEZ TO MAKE SIGNIFICANT
INVESTMENT INTO CINOVEC PROJECT
The Company announced on
The Final Agreement reached today is now a binding commitment from CEZ to subscribe to become a 51% shareholder in Geomet, and is conditional only upon EMH shareholder approval, which will be sought at an EGM to be held in
The amended terms of the Final Agreement (as compared to the Conditional Agreement) include:
(a) in the context of the binding commitment to invest described above and current market conditions, a reduction of the price payable by CEZ upon completing of the subscription of Geomet shares from
(b) allowing CEZ to elect to withdraw from funding of the Project at two separate milestones. The first withdrawal milestone is designed to coincide with completion of the front-end engineering design program and semi-industrial pilot testing of the lithium concentrate processing while the second withdrawal milestone is designed to coincide with completion of the definitive feasibility study. If CEZ elects to withdraw, Geomet will return to it an amount equal to its initial investment minus
The directors of the Company believe that the revised terms provide sufficient funding for the next stage of the development of the Project, setting it on sound footing to progress into production thereafter.
Further details of the Final Agreement will be set out in the supplementary circular to be posted to EMH shareholders shortly.
European Metals Managing Director
Background to the Transaction
In July last year, EMH announced that CEZ was conducting due diligence on the Company and the
In light of very significant changes in global markets and the successful completion of CEZ's due diligence, EMH and CEZ have replaced the Conditional Agreement with the Final Agreement.
The Company considers that
Financial effects of the Transaction
The primary financial objective of the transaction is to secure the funding for the next stage of the development of the
The addition of a partner with the financial strength of CEZ, and the strong significant business relationships that it brings, significantly enhances the status of the
The subscription proceeds from the Final Agreement will be used by Geomet to develop the
On completion of CEZ's investment pursuant to the Final Agreement, EMH's ongoing interest in Geomet will reduce to 49%. Under the Geomet Shareholders' Agreement (to be entered into at the completion of CEZ's investment), Geomet will have a board of five directors. EMH will have the right to nominate two of the five Geomet directors Further, under the Geomet Shareholders' Agreement, EMH will be appointed to provide services managing the
Accordingly, on completion of the Final Agreement, EMH will cease to consolidate Geomet's results within the EMH's consolidated accounts.
ASX Listing Rule 11.2
ASX Listing Rule 11.2 provides that an entity may not dispose of its main undertaking (that is, its main asset or business) without the approval of its shareholders. While the Final Agreement may be considered to constitute the Company disposing of its main undertaking, the Company will not be making any change to its main undertaking. That is, the Company will remain engaged in the same principal business activities following completion of the Final Agreement. Accordingly, the Company will be seeking Shareholder approval under Listing Rule 11.2 for completeness.
CEZ is not a related party of the Company, and Shareholder approval for the Final Agreement is not required for the purposes of ASX Listing Rule 10.1.
AIM Rule 15
The Final Agreement would constitute a fundamental change of business of the Company under Rule 15 of the AIM Rules. The Final Agreement is therefore conditional on, inter alia, Shareholder approval which will be sought at a General Meeting of the Company to be convened in due course. The Company will, however, as previously announced, remain an operating minerals company under the AIM Rules given its remaining material interest and ongoing involvement in the
The completion of the Final Agreement will not result in any changes to the Company's Board or management.
The Company expects to publish shortly a supplementary circular to shareholders setting our further details of the amended proposed subscription, the proposed amendments to the Exclusivity and Framework Agreement and Geomet Shareholders' Agreement, together with notice of the General Meeting. A further announcement will be made in due course.
BACKGROUND INFORMATION ON CEZ
Headquartered in the
The largest shareholder of its parent company, CEZ a. s., is the
As one of the leading Central European power companies, CEZ intends to develop several projects in areas of energy storage and battery manufacturing in the
CEZ is also a market leader for E-mobility in the region and has installed and operates a network of EV charging stations throughout
BACKGROUND INFORMATION ON CINOVEC
European Metals, through its wholly owned subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over the
This makes Cinovec the largest lithium deposit in
The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining operation.
The economic viability of Cinovec has been enhanced by the recent strong increase in demand for lithium globally, and within
There are no other material changes to the original information and all the material assumptions continue to apply to the forecasts.
For further information on this update or the Company generally, please visit our website at www.europeanmet.com or see full contact details at the end of this release.
Information in this release that relates to exploration results is based on information compiled by Dr
The information in this release that relates to Mineral Resources and Exploration Targets has been compiled by Mr Lynn Widenbar. Mr Widenbar, who is a Member of the
CAUTION REGARDING FORWARD LOOKING STATEMENTS
Information included in this release constitutes forward-looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.
Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.
Forward looking statements are based on the company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company's business and operations in the future. The company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company's control.
Although the company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
LITHIUM CLASSIFICATION AND CONVERSION FACTORS
Lithium grades are normally presented in percentages or parts per million (ppm). Grades of deposits are also expressed as lithium compounds in percentages, for example as a percent lithium oxide (Li2O) content or percent lithium carbonate (Li2CO3) content.
Lithium carbonate equivalent ("LCE") is the industry standard terminology for, and is equivalent to, Li2CO3. Use of LCE is to provide data comparable with industry reports and is the total equivalent amount of lithium carbonate, assuming the lithium content in the deposit is converted to lithium carbonate, using the conversion rates in the table included below to get an equivalent Li2CO3 value in percent. Use of LCE assumes 100% recovery and no process losses in the extraction of Li2CO3 from the deposit.
Lithium resources and reserves are usually presented in tonnes of LCE or Li.
The standard conversion factors are set out in the table below:
Table: Conversion Factors for Lithium Compounds and Minerals
Convert to Li
Convert to Li2O
Convert to Li2CO3
A copy of this announcement is available from the Company's website at www.europeanmet.com.
Tel: +61 (0) 419 996 333
Email: [email protected]
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Tel: +61 (0) 8 6245 2050
Email: [email protected]
Tel: +44 (0) 20 7628 3396
Email: [email protected]
Tel: +44 (0) 20 7186 9950
Blytheweigh (Financial PR)
Tel: +44 (0) 20 7138 3222
The information contained within this announcement is considered to be inside information, for the purposes of Article 7 of EU Regulation 596/2014, prior to its release. The person who authorised for the release of this announcement on behalf of the Company was
This information is provided by RNS, the news service of the
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