For immediate release                                                                                                               31 January 2025

QUARTERLY ACTIVITIES REPORT

31 DECEMBER 2024

European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY and EMHLF) ("European Metals" or the "Company") is pleased to provide an update on its activities during the three-month period ending 31 December 2024. Continued progress with the development of the globally significant Cinovec Lithium Project ("the Project" or "Cinovec") in the Czech Republic, has been made over this period.

Cinovec Lithium Project and DFS Update

During the quarter, the Company released an update on the Definitive Feasibility Study ("DFS") for the Cinovec Project (see the Company's ASX/AIM announcement of 27 November 2024 "Cinovec Project Update").

The Company announced the selection of the former Prunéřov 1 Power Station ("EPR1") as the processing plant and related infrastructure construction location, after extensive evaluations of potential sites within the broader Prunéřov area. The EPR1 site offers advantages such as established infrastructure for power, water and rail access to leverage off, leading to cost reduction and enhanced operational efficiency. Key benefits include enhanced logistics due to existing rail links, potential processing capacity expansion areas and the potential for integration with CEZ's solar power plans. The Dukla site will be reconfigured as a transport hub, while ongoing engineering work focuses on optimising capital and operational expenditure at EPR1.

The shift to the EPR1 site, which spans 36 hectares compared to the previous 24-hectare Dukla site, is expected to bring several significant benefits:

• Well-established road infrastructure including  rail links that will provide excellent access to site, which will provide significant constructability advantages for the processing plant as well as ongoing operating cost ("Opex") benefits and sustainability (environmental footprint) benefits as a result of building on rehabilitated land. 

• EPR1 was a major industrial site and is therefore well serviced by power, gas and water infrastructure which will require less work and investment to re-connect and reticulate into the processing plant.

• EPR1 is served directly by extensive rail infrastructure built for the purpose of delivering coal to the EPR1 and EPR2 power plants, which will continue to be used for EPR2 until it is decommissioned by CEZ. This presents synergies in terms of operating and maintenance costs for shared infrastructure and services and may enable expansion of planned processing capacity beyond that published in the Project's 2022 Pre-Feasibility Study ("PFS"), namely 2.25mtpa run-of-mine ore ("ROM") feed; and

• Ultimately, this may enable a further expansion of lithium production when the adjacent EPR2 coal-fired power plant is shut down in-line with European and Czech policy on phasing out coal-fired power generation and adoption of renewables, including planned solar power installations in the Prunéřov area.

Engineering work has continued in parallel to finalising the process plant location and has included:

• Continuous improvement to mining and processing Capex and Opex, including optimisation of process design criteria;

• Investigation of opportunities to increase mine production tonnages and processing plant throughput volumes;

• Reconfiguration of the previous proposed plant site at Dukla to become a transport hub to load ROM onto trains for transportation to the EPR1 site and, in the reverse direction, receive tailings for the purpose of backfilling the mine;

• Optimising materials handling solutions for ROM and tailings at both the Dukla and EPR1 sites; and

• Evaluation of rail logistics and confirmation that the network capacity can accommodate the volumes of material from the Cinovec Project.

Work on updating the DFS to include the EPR1 site and revised fully integrated project configuration has already commenced. The results of the DFS are expected to be released in mid-2025.

In December 2024, the Company announced the outcomes of a Concept Study into the potential to increase the planned annual production of lithium chemicals from the Cinovec Project (see the Company's ASX/AIM announcement of 20 December 2024 "Significant Increase in Planned Lithium Production"). The Concept Study assessed potential scenarios to increase ROM ore processing capacity compared to the PFS, without significantly impacting processing plant head grade, life of mine, or plant recovery.

If supported and confirmed as part of the DFS, scenarios were identified that could represent an increase to the possible production previously announced in the PFS, of 29,386 tpa.  The Concept Study indicated that this potential increase in ROM ore could be achieved without expanding the surface footprint of the underground mine and that the DFS could be based upon the increased ROM capacity. In addition, that the increased production levels are not expected to delay the DFS. 

The Company notes however that the potential increase in production remains conceptual and the economic viability of the project based on the variables considered is currently unknown. However, the potential increase in production would enable the Project to benefit from significant economies of scale which are expected to be confirmed in the DFS, now due for completion in mid-2025.

Process Flowsheet Improvements

The Project team is advancing several DFS-related initiatives to enhance the Front-End Comminution and Beneficiation ("FECAB") circuit and the Lithium Chemical Plant ("LCP") circuit (see the Company's ASX/AIM announcement of 27 November 2024 "Cinovec Project Update"). These improvements focus on optimising recovery rates, reducing waste and lowering Opex costs to strengthen the Project's economic outlook.

In relation to the LCP, post-piloting testing continues to refine aspects such as roasting reagents, pelletising and moisture reduction in the roast mix, as well as improvements in lithium phosphate precipitation already achieved. Consolidated ongoing test work results demonstrate significant economic benefits, including reduced kiln size and energy consumption, which will be reflected in the DFS.

CORPORATE AND ADMINISTRATION

QUARTERLY CASHFLOW REPORT

In accordance with the ASX Listing Rules, the Company will also today lodge its cashflow report for the quarter ended 31 December 2024.  There was no cash outflow for Cinovec associated costs, in respect of the Company's investment in the Cinovec Lithium Project in the Czech Republic during the quarter.

The Company's total cash is $3.5 million as at 31 December 2024.  It is noted that there is approximately a further $95k in receivables from the Company's associate, Geomet s.r.o, in relation to the provision of services in relation to managing the Cinovec Project development, as at 31 December 2024. 

PAYMENTS TO RELATED PARTIES

As outlined in the attached Appendix 5B (section 6.1), during the quarter approximately $237,000 in payments were made to related parties and their associates for director salaries, consultancy fees, superannuation and other related costs.  A portion of these expenses is to be reimbursed directly from Geomet.

CORPORATE ACTIVITY

During the quarter, the Company has resolved to change its financial year-end from 30 June to 31 December to align with Geomet's reporting period. This adjustment aims to improve the efficiency and cost-effectiveness of financial reporting, auditing and governance processes (see the Company's ASX/ AIM announcement of 26 November 2024 "Change of Financial Year End").

On 31 October 2024, the Company issued 300,000 performance rights and 5,000,000 unlisted options under the Company's Employee Inventive Plan to its employees and consultants.

GEOMET TENEMENT SCHEDULE

Table 1: Geomet Tenements

This announcement has been approved for release by the Board.

CONTACT

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.

BACKGROUND INFORMATION ON CINOVEC

PROJECT OVERVIEW

Cinovec Lithium Project

Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li₂O, Indicated Mineral Resource of 360.2Mt at 0.44% Li₂O and an Inferred Mineral Resource of 294.7Mt at 0.39% Li₂O containing a combined 7.39 million tonnes Lithium Carbonate Equivalent (refer to the Company's ASX/AIM release dated 13 October 2021) (Resource Upgrade at Cinovec Lithium Project).

An initial Probable Ore Reserve of 34.5Mt at 0.65% Li₂O reported 4 July 2017 (Cinovec Maiden Ore Reserve - Further Information) has been declared to cover the first 20 years mining at an output of 22,500tpa of lithium carbonate (refer to the Company's ASX/AIM release dated 11 July 2018) (Cinovec Production Modelled to Increase to 22,500tpa of Lithium Carbonate).

This makes Cinovec the largest hard rock lithium deposit in Europe and the eighth largest hard rock deposit in the world.

The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining operation.

On 19 January 2022, EMH provided an update to the 2019 PFS Update. It confirmed the deposit is amenable to bulk underground mining (refer to the Company's ASX/AIM release dated 19 January 2022) (PFS Update delivers outstanding results). Metallurgical test-work has produced both battery-grade lithium hydroxide and battery-grade lithium carbonate at excellent recoveries. In February 2023 DRA Global Limited ("DRA") was appointed to complete the Definitive Feasibility Study ("DFS").

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. The deposit lies in an active mining region.

The economic viability of Cinovec has been enhanced by the recent push for supply security of critical raw materials for battery production, including the strong increase in demand for lithium globally, and derived from within Europe specifically, as demonstrated by the European Union's Critical Raw Materials Act (CRMA).

BACKGROUND INFORMATION ON CEZ

Headquartered in the Czech Republic, CEZ a.s. is one of the largest companies in the Czech Republic and a leading energy group operating in Western and Central Europe. CEZ's core business is the generation, distribution, trade in, and sales of electricity and heat, trade in and sales of natural gas, and coal extraction. The foundation of power generation at CEZ Group are emission-free sources. The CEZ strategy named Clean Energy for Tomorrow is based on ambitious decarbonisation, development of renewable sources and nuclear energy. CEZ announced that it would move forward its climate neutrality commitment by ten years to 2040.

The largest shareholder of its parent company, CEZ a.s., is the Czech Republic with a stake of approximately 70%. The shares of CEZ a.s. are traded on the Prague and Warsaw stock exchanges and included in the PX and WIG-CEE exchange indices. CEZ's market capitalisation is approximately EUR 20.3 billion.

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 Czech Republic and in Central Europe.

CEZ is also a market leader for E-mobility in the region and has installed and operates a network of EV charging stations throughout Czech Republic. The automotive industry in the Czech Republic is a significant contributor to GDP, and the number of EV's in the country is expected to grow significantly in the coming years.

COMPETENT PERSONS

Information in this release that relates to the FECAB metallurgical testwork is based on, and fairly reflects, technical data and supporting documentation compiled or supervised by Mr Walter Mädel, a full-time employee of Geomet s.r.o an associate of the Company. Mr Mädel is a member of the Australasian Institute of Mining and Metallurgy (AUSIMM) and a mineral processing professional with over 27 years of experience in metallurgical process and project development, process design, project implementation and operations. Of his experience, at least 5 years have been specifically focused on hard rock pegmatite Lithium processing development. Mr Mädel consents to the inclusion in the announcement of the matters based on this information in the form and context in which it appears.  Mr Mädel is a participant in the long-term incentive plan of the Company.

Information in this release that relates to exploration results is based on, and fairly reflects, information and supporting documentation compiled by Dr Vojtech Sesulka. Dr Sesulka is a Certified Professional Geologist (certified by the European Federation of Geologists), a member of the Czech Association of Economic Geologist, and a Competent Person as defined in the JORC Code 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Sesulka has provided his prior written consent to the inclusion in this report of the matters based on his information in the form and context in which it appears. Dr Sesulka is an independent consultant with more than 10 years working for the EMH or Geomet companies. Dr Sesulka does not own any shares in the Company and is not a participant in any short- or long-term incentive plans of the Company.

Information in this release that relates to metallurgical test work and the process design criteria and flow sheets in relation to the LCP is based on, and fairly reflects, information and supporting documentation compiled by Mr Grant Harman (B.Sc Chem Eng, B.Com). Mr Harman is an independent consultant and the principal of Lithium Consultants Australasia Pty Ltd with in excess of 14 years of lithium chemicals experience. Mr Harman has provided his prior written consent to the inclusion in this report of the matters based on his information in the form and context that the information appears. Mr Harman is a participant in the long-term incentive plan of the Company.

The information in this release that relates to Mineral Resources and Exploration Targets is based on, and fairly reflects, information and supporting documentation prepared by Mr Lynn Widenbar. Mr Widenbar, who is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Australasian Institute of Geoscientists, is a full-time employee of Widenbar and Associates and produced the estimate based on data and geological information supplied by European Metals. Mr Widenbar has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the JORC Code 2012 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Mr Widenbar has provided his prior written consent to the inclusion in this report of the matters based on his information in the form and context that the information appears. Mr Widenbar does not own any shares in the Company and is not a participant in any short- or long-term incentive plans of the Company.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

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:

Conversion Factors for Lithium Compounds and Minerals

WEBSITE

A copy of this announcement is available from the Company's website at www.europeanmet.com/announcements/.

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

Appendix 5B

Mining exploration entity or oil and gas exploration entity
quarterly cash flow report

Compliance statement

1        This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2        This statement gives a true and fair view of the matters disclosed.

Date:                31 January 2025

Authorised by:  The Board

(Name of body or officer authorising release - see note 4)

Notes

1.          This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2.          If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3.          Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4.          If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5.          If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.