NEW LITHIUM PLANT SITE EXPECTED TO IMPROVE PROJECT ECONOMICS...

NEW LITHIUM PLANT SITE EXPECTED TO IMPROVE PROJECT ECONOMICS
Highlights
· The Prunéřov site has been selected for the lithium processing plant with the move expected to speed up the permitting process and expedite the Cinovec Project.
· The Prunéřov site is anticipated to also enable positive outcomes for project economics including reductions in capex and opex per tonne as a result of optimalization of the engineering identified as part of the Definitive Feasibility Study ("DFS") process, and reduced demolition and clearance requirements.
· The new site has received preliminary agreement and support from the municipal and regional governments.
· Geomet will now proceed to finalise the DFS process taking into account the new site, including the revised capex from the new site.

European Metals Holdings Limited (ASX & AIM: EMH) ("European Metals" or the "Company") is pleased to announce the selection of a new site for the Cinovec Lithium Processing Plant which is anticipated to provide improved permitting and project economics.

The new site selection follows evaluation and preliminary agreement between project company Geomet and the relevant municipal and regional governments to move the lithium processing plant from Dukla to the Prunéřov industrial site.
Prunéřov is the site of the former Prunéřov 1 Power Station, which was decommissioned in 2020 and Prunéřov 2 Power Station. The site is owned and operated by CEZ, the Company's project level partner.

The site, currently zoned for industrial use, is considerably larger in size than the Dukla site and should enable the processing plant to be laid out in a more effective (and anticipated less costly) manner, enabling better and faster constructability.

The ore from the underground mining operation at Cinovec will be carried by conveyor to Dukla where it will be loaded onto trains for transport to Prunéřov, a distance of approximately 59 km using existing rail facilities, the capacity of which has been confirmed.

During the DFS process, it became apparent that after considerable consultation with local stakeholders and the municipal and regional governments the Dukla site possessed limited capacity and also limited support from the surrounding municipalities.

The Prunéřov industrial site is located alongside the 750MW Prunéřov 2 Coal fired power plant and is situated further away from inhabited areas.

Keith Coughlan, Executive Chairman, commented: "While providing a good outcome for the surrounding communities, the decision to move the lithium processing plant from the Dukla to the Prunéřov site is expected to have a positive outcome on the capex and opex per tonne of the project due to the possibility of quicker permitting process and more effective layout of the processing plant.

As would be expected in such circumstances, we were unable to provide information on this matter whilst a revised project configuration was being formulated, due to social and environmental impact sensitivities and had to defer the DFS until the details of the new site were agreed (refer to Announcements dated: 27 March 2024 & 22 December 2023). We will now be instructing DRA Global and the DFS team to amend the DFS to take this into account before we can provide DFS numbers.

We understand that a deferral to a DFS is usually considered a negative matter, but in this case, we consider it to be for a positive result, particularly as the Prunéřov site is currently home to the Prunéřov Power Plant, and the permitting can now be advanced in a more timely manner with the cooperation of the local, regional and federal governments.

What has been clear in this process is the importance placed on this project by the community and Czech Government at all levels. In the European Union's Critical Raw Materials Act ("CRMA") environment, the coming together of both the Cinovec project joint venture partners and the Czech Government in the decision-making process with regards of the selection of the Prunéřov site provide a very strong foundation for our upcoming application for Strategic Project status under the CRMA."

Ladislav Štěpánek, Chairman of the Board of Directors of Geomet, stated: "Prunéřov is a suitable place for our project. It is an industrial location at a greater distance from populated areas where a lignite power plant is already operating. Building a processing plant in Prunéřov fulfils our philosophy of coal transformation, as it would provide enough jobs for the employees of the gradually closing coal mines and power plants located in the vicinity. Only an ore loading facility will be built at the original site at Dukla, from where we will transport the ore by rail to Prunéřov. I am glad that we have found an agreement with the municipalities and the region and can continue with the project at Prunéřov."

Jan Losenický, Mayor of Kadaň, added: "We welcome the plan of ČEZ and Geomet to build a lithium plant in Prunéřov. People from our town who currently work in coal-fired power plants or mines, but which will be gradually downsized and closed, could find employment in the processing plant. The investor has promised to invest in the training and retraining of current employees so that they can be employed in the new sophisticated plant. We are glad that ČEZ will not leave the region with the end of coal but will remain one of the largest investors and employers in the region, also thanks to the lithium park project.

This announcement has been approved for release by the Board.