The European Bank for Reconstruction and Development (EBRD) has agreed to make a €6m ($6.67m) strategic investment in Australian company European Metals to support the development of the latter’s Cinovec lithium mining project in the Czech Republic.
The investment will be carried out by way of a private placement, whereby the EBRD will subscribe for more than 12 million European Metals shares at £0.423 a share.
Upon completion of the placement, the EBRD will own 6% of European Metals’ shares on issue.
European Metals executive chairman Keith Coughlan said: "The EBRD investment aims to fund the project’s predevelopment work and opens a pathway to potentially securing project financing.
"The EBRD investment is confirmation that the Cinovec Project is a vital part of establishing a strong, sustainable European electric vehicle battery supply chain to support Europe's accelerating transition to e-mobility.”
European Metals will use the proceeds from the placement to fund the pre-development works and studies for the Cinovec Project. These include environmental works and working capital expenditures up to the completion of the definitive feasibility study.
EBRD natural resources head Natalia Lacorzana said: “We are pleased to support the Cinovec project, the first lithium project financed by the bank, on its path to become a responsibly mined source of battery-grade lithium for Europe.
“EBRD is committed to supporting the global transition to a green economy, the move towards wider adoption of electric vehicles, in particular, via providing necessary funding and know-how to junior miners of critical and/or strategic raw materials.”
In addition, European Metals has signed an agreement with the EBRD whereby the latter holds the rights to participate in future financings to maintain its pro rata stake in European Metals.
The Cinovec project, upon completion, will produce battery-grade lithium and by-products such as tin and tungsten.
European Metals currently owns a 49% stake in the Cinovec deposit, which is said to be Europe’s biggest hard-rock lithium deposit and one of the largest world’s undeveloped tin resources.
