London-listed European Metal Holdings (EMH) on Friday reached final agreement with integrated energy utility CEZ Group around a partnership and investment into the Cinovec lithium/tin project, in Czech Republic.
CEZ in November agreed to become a 51% shareholder in EMH's Czech subsidiary Geomet. The entities have now agreed on a final price of €29-million.
The only outstanding condition to the deal is EMH’s shareholder approval, which will be sought at a general meeting in April.
“Given the current uncertain state of global markets, it was particularly affirming for us to have a partner with the corporate, technical and financial strength of CEZ investing in the project,” commented EMH MD Keith Coughlan.
CEZ is a leader in power generation and distribution in the region and has plans to become involved in the development of new energy systems. Through these battery industry activities, CEZ is expected to assist in the securing of offtake agreements for the project.
As one of the leading Central European power companies, CEZ intended to develop several projects in areas of energy storage and battery manufacturing in the Czech Republic and in Central Europe.
In terms of the final agreement, CEZ could elect to withdraw from funding of the project at two separate milestones.
The first withdrawal milestone was designed to coincide with completion of the front-end engineering design programme and semi-industrial pilot testing of the lithium concentrate processing, while the second withdrawal milestone was designed to coincide with completion of the definitive feasibility study.
Should CEZ elect to withdraw, Geomet would return to it an amount equal to its initial investment minus €250 000 and all costs and expenses incurred in relation to the project up until the date of notification of the withdrawal.
Following a withdrawal, CEZ would reduce its shareholding on a pro-rata basis to a minority position in Geomet.