EMH Secures $6M Strategic Investment from European Bank

On Friday, our European lithium Investment, European Metals Holdings (ASX: EMH) secured a €6M strategic investment from the European Bank for Reconstruction and Development, otherwise known as the EBRD.

The EBRD is a multilateral development bank which was founded in 1991 to support Eastern European countries following the fall of the Soviet Union - since then it has expanded its reach and is owned by 71 countries.

We see the strategic investment as validation of EMH’s potential to supply lithium to the European market, noting that EMH has the largest hard rock lithium deposit in Europe.

The investment by the EBRD is through a placement at £0.423 per share or 80.3c per share.

We think this placement to the EBRD has three primary benefits:

1. It can help establish a floor for EMH shares as it establishes an independent value for EMH’s project.
2. Going forward, we expect the EBRD to be a sticky holder, noting that the placement allows for the EBRD to maintain its pro rata equity interest in EMH.
3. The placement is a vote of confidence in EMH’s project - the EBRD did its own due diligence on it and this confirms that third parties like the EBRD see the value in EMH’s Czech Republic lithium project.

What’s next for EMH?

Definitive Feasibility Study (DFS) 🔄

EMH is currently working on upgrading its project from Pre-Feasibility Study (PFS) to a Definitive Feasibility Study (DFS).

We hope to see the DFS improve on the following financial metrics from the PFS:

1. A post-tax NPV of between US$1.1BN to US$1.94BN.
2. CAPEX of US$644M.
3. Internal rate of return (IRR) of up to 36.3%
4. Pay-back period of 2.5 years.

We note that EMH is currently completing Front End Engineering Design (FEED), which is a precursor for the company to estimate its capital costs that will be fed into the DFS.

Offtake agreement 🔄

Project financing 🔄

Progress EIAs and permitting for mining and processing 🔄