European Metals Managing Director, Keith Coughlan commented on the capital raising : It is very pleasing to have Rare Earth Minerals’ ongoing support from both financial and technical perspectives. Having strong major shareholders with aligned vision of Cinovec’s potential enables us to keep our issued capital under check. It has also allowed European Metals to assert itself strategically within the lithium industry. We look forward to the future growth this will bring. This funding ensures that the Company will remain in a strong financial position beyond the PFS.”
European Metals Holdings Limited this morning announced that it has today conditionally raised A$2.6 million from its largest shareholder, Rare Earth Minerals Plc (“REM”) via the issue of 5 million ordinary shares in the Company at an issue price of A$0.52 per CDI. The Placing Price is the same as the closing price of the Company’s securities on ASX on Friday 30 September 2016 and represents a premium over both the 5 and 10 day volume weighted average price of the Company’s securities.
The placement is subject to shareholder approval which will be sought at the Company’s Annual General Meeting later this month. Application will be made for the placement shares to be admitted to trading on AIM with admission expected to take place on or around 31 October 2016. The Placing Shares will, when issued, rank pari passu in all respects with the existing ordinary shares in EMH.
In addition, REM has notified the Company of its intention to exercise 2 million unlisted options which were otherwise due to expire on 19 October 2016. The option exercise price is A$0.2 and on exercise will result in a further A$400,000 being raised by the Company. The issuance of the placement CDI’s and the option conversion will take REM’s relevant interest in European Metals to 20.92%.
The placement and option exercise funds, which in aggregate amount to A$3.0 million will be utilised to further develop the Cinovec Project, complete the Company’s Preliminary Feasibility Study (“PFS”), and for additional working capital. As previously reported to ASX and AIM, all aspects of the PFS are progressing positively, as is the current drilling program. The Company looks forward to reporting further developments and updates shortly.
Rare Earth Minerals is a London listed investment company focused on creating a diverse portfolio of direct and indirect interests in Lithium and Rare Earth Element deposits. REM has been the largest shareholder of European Metals since July 2015, and has steadily increased its shareholding via placements and on market purchases. REM’s current market capitalisation is approximately £ 55 million.
As REM is currently a 16.4% per cent shareholder in the Company, REM is a related party for the purposes of the AIM Rules. The Directors of EMH, excluding Kiran Morzaria who is a director of REM, consider, having consulted with its nominated adviser, that the terms of the placing are fair and reasonable insofar as EMH’s shareholders are concerned.
BACKGROUND INFORMATION ON CINOVEC
Cinovec Lithium/Tin Project
European Metals owns 100% of the Cinovec lithium-tin deposit in the Czech Republic. 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 49.1Mt @ 0.43% Li2O and an Inferred Mineral Resource of 482Mt @ 0.43% Li2O containing a combined 5.7 million tonnes Lithium Carbonate Equivalent.
This makes Cinovec the largest lithium deposit in Europe and the fourth largest non-brine deposit in the world.
Within this resource lies one of the largest undeveloped tin deposits in the world, with total Indicated Mineral Resource of 15.7Mt @ 0.26% Sn and an Inferred Mineral Resources of 59.7 Mt grading 0.21% Sn for a combined total of 178kt of contained tin. The Mineral Resource Estimates have been previously released on 18 May 2016. The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining operation.
A Scoping Study conducted by specialist independent consultants indicates the deposit could be amenable to bulk underground mining. Metallurgical test work has produced both battery grade lithium carbonate and high-grade tin concentrate at excellent recoveries with the Scoping Study. Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed road adjacent to the deposit, rail lines located 5 km north and 8 km south of the deposit and an active 22 kV transmission line running to the historic mine. As the deposit lies in an active mining region, it has strong community support.
