European Metals Holdings Ltd (LON:EMH) Managing Director Keith Coughlan caught up with DirectorsTalk for an exclusive interview to discuss the granting of the DFS level drilling permits.
Q1: An interesting update this morning, something I’m sure shareholders have been waiting for, can you explain to us what is the importance of the approval for drilling?
A1: Firstly, this is European Metals’ second announcement within the last few weeks of the permitting of drilling programmes. The first we announced early last month with regards to our geotechnical drilling and this one is more important, it’s about the drilling for the DFS.
Apart from the drilling itself, it’s significant because we’re seeing the approval and the general level of cooperation that we’ve been seeing since the government was formed early in July, shows to us that everything is being treated as business as usual and we can expect now to get on with the programme with all due haste at the moment.
Q2: What can you tell me about the scope of the drilling?
A2: There are two basic objectives in this round of drilling.
Firstly, we will drill 8 diamond holes which will be used, firstly, to convert the current route resource in part from inferred to measured for the DFS, that is the part of the deposit that we will be mining in the first few years. So, it’s to confirm the predictability of the mineralisation and we believe that the resource is highly predicable, it’s a fairly consistent ore body and we believe that this drilling campaign will confirm that and give a higher level of confidence on the new resource as part of the DFS.
Secondly, the other 5 holes of this programme will be further geotech holes with regards to the area of the portal where the underground mine decline will begin. This is just planned to help us assist with the location taken with the data from the previous geotech holes that we drilled over the last few weeks.
Q3: In terms of timing, when will European Metals commence the drilling ?
A3: We can start quickly so we will kick off very quickly, as soon as we can mobilise which should be within the next 2 weeks. That’s important to us that we can get as much drilling done prior to the snow coming, the winter coming, we can drill there all year round, but it is slower going once the snow sets in, that’s not usually not until much later in the season.
Q4: What’s the significance of the testwork that you report has commenced on schedule in Germany?
A4: We have demonstrated previously our ability to produce battery-grade lithium carbonate and the PFS that we issued last year was based on that.
So, the significance of the work is that it’s towards our philosophy of supplying battery-grade product to producers in the Czech Republic and Europe and more broadly, that means that in all likelihood, we’ll be required by those offtakers to be able to produce battery-grade lithium carbonate.
We’ve already planned and budgeted this testwork and at its time, to demonstrate the flowsheet and mass balance work that we alluded to in the previous announcement. Effectively, it’s to be able to produce battery-grade lithium hydroxide, as well carbonate, because we are seeing a move in that direction globally and in Europe specifically.
Q5: What product do you think European Metals Holdings will settle on if the testwork is unsuccessful in producing lithium hydroxide directly from the leach?
A5: We will basically wait to see what the economics tell us when we have the test results, we’ll wait to see what the market wants specifically as well. We believe that we’ll be entering into offtake agreements well before we have to make the final decision for that and in conjunction with those potential offtakers, we will determine what it is we’re going to produce.