European Metals Holdings Ltd (LON:EMH) Managing Director Keith Coughlan caught up with DirectorsTalk for an exclusive interview to discuss the substantial increase in indicated resource at Cinovec, the importance of the tin increase and the timeline for further news on the project
Q1: You’ve just released a 50% increase in the indicated resource at Cinovec, how significant is that and how significant is the increase in the overall resource?
A1: Well, it’s very significant. Firstly, from the point of view of the indicated resource, you’re right, we have announced an increase of 50% in that number but that is actually 50% on the previous increase from our interim upgrade in November which was in itself a 400% increase on the resource. So effectively since we began this drilling programme back in July we have increased the size of the indicated resource by about 600% so a very significant increase.
In regards to the overall resource, that now sits at 7 million tonnes LCE which is very very big by anyone’s measure. It’s, as I’ve said before, the largest lithium resource in Europe and it’s about the fourth largest non-brine resource in the world and the size of this resource is significant and it matters a lot. So, that increase of about 20% in the overall resource was essentially incidental, we weren’t drilling with a view to try and increase that resource, we were really drilling with a view to convert as much of the inferred to the indicated category.
In regards to the size, I think what’s most important are two things really, firstly we’ve been saying for well over a year now that we have great confidence in the ore body and the historical work and we were drilling to confirm a lot of that historical work and we believed that we’d see this sort of results that we have now seen. So, the fact that this has now transpired, I think should give a great deal of confidence to the market with regards to the Cinovec deposit and where we can go from here. Secondly, the European industry needs a large long-term consistent supply of lithium from an economically and politically stable location and Cinovec provides that, it proves that it will provide that to the European car manufacturers to the European battery manufacturers going forward. Every announcement we make along the lines of today’s, I think is further evidence of that.
Q2: I see that the tin resource has also increased by nearly 50%, how important is that to European Metals Holdings Ltd?
A2: The tin at Cinovec is very important as, I think the readers will know, Cinovec is a historic tin project, tin was mined there for many many years. In the scoping study, which is getting a little dated now but we’ll update these numbers in the PFS within the next 6 weeks, the tin revenues based on the mining plan we had then was in the vicinity of $90 million a year, so just from a pure cash flow perspective the tin is very important. It effectively allows us to produce lithium carbonate for a lower net cost so not only can we give the European car manufacturers the confidence that we can supply them with battery-grade product for many years to come, we can also do that at costs that are well and truly in the bottom quartile of global production.
Q3: You mentioned the PFS is out in a few weeks, what is the timeline for further news on the project?
A3: Well, leading into the PFS which is due for completion at the end of next month, we will make the headline numbers known shortly thereafter, but we still aim to get out between now and then some further information with regards to the metallurgy and further information with regards to the product that we have produced and are currently optimising. Also, we referred to samples being dispatched to some industry players, some potential off takers etc., we announced that in the release around Christmas, we’ll have some further updates with regards to that information as well.
