European Metals (EMH.L, EMH.AX) has entered into a strategic investment agreement with the European Bank for Reconstruction and Development (the EBRD) whereby the latter has committed to invest 6M EUR in the company. The cash will be raised by way of a private placement priced at 42.3 pence which means about 12.3M shares will be issued to the EBRD. The proceeds will be used to fund the pre-development works and studies on the Cinovec project.
The company owns 49% of the Cinovec project which currently hosts a total measured and indicated resource of in excess of 400 million tonnes at an average grade of approximately 0.45% Li2O and an additional 295 million tonnes of rock in the inferred resource category at a average grade of 0.39% Li2O. All resource categories also contain on average 0.05% tin. There also is an initial probable ore reserve of just under 35 million tonnes at an average grade of 0.65% Li2O and 0.09% tin which was subsequently used for economic studies.
The grade is low, especially for an underground bulk mining deposit but the current high lithium price is very forgiving and the investment from the EBRD is an additional vote of confidence.
Disclosure: The author has no position in European Metals. Please read our disclaimer.
