Shares in European Metals Holdings (ASX, LON: EMH) jumped on Monday in both Sydney and London after it said its Cinovec lithium project had been classified as strategic for the Czech Republic’s Usti region.
The nomination means the project will be given priority for grant funding from the Just Transition Fund (JTF), which supports European Union regions relying on fossil fuels and high-emission industries in their green transition.
Applications for grants through the JTF opened on November 14, 2022 and will close on December 31, 2023.
The stock rose almost 18% on the news in Australia to close 9.7% higher at A$0.74. In London it climbed 17.3% to 44 pence, but dropped later in the day to 39 pence — still 4% higher than Friday’s close.
The mining company said it is confident it will receive a significant portion of the funds applied for ahead of many other projects that have been submitted. The maximum amount the JTF could allocate to European Metals’ Cinovec project is 1.2 billion Czech koruna ($54.8 million), it said.
The designation provides “further evidence of strong support from the Czech government and the European Union and the Europe-wide recognition of the critical part which the Cinovec project will play in enabling the EU to reach its stated goals of lithium self-sufficiency by 2030,” chairperson Keith Coughlan said in the statement.
The funding could accelerate the project’s development and reduce the time until the first ore is produced, Coughlan noted.
European Metals controls the exploration licences to the Cinovec lithium/tin project in the Czech Republic, which it describes as Europe’s largest hard rock lithium deposit and the world’s fourth-largest non-brine deposit.
Czech utility CEZ, in which the state holds a 70% interest, has a 51% indirect stake in the project through European Metals 100%-owned local subsidiary Geomet.
The project sits some 100 kilometres northwest of Prague in the Czech Republic on the border with Germany. It lies on the Krusne hory/Erzgebirge metallogenic province at the northern border of the Bohemian Massif, one of the major metamorphic crystalline complexes of the European Variscan Belt.
Once in operations, the Cinovec mine will churn out 29,386 tonnes of lithium hydroxide a year over its 25-year productive life, according to a pre-feasibility study update, published in early January.