European Metals Holdings shares surged on Friday after announcing that its subsidiary Geomet has been awarded a grant of up to €360m for the development of the Cinovec Lithium Project in the Czech Republic, subject to completion of administrative processes.
The funding comes through the “Strategic Investments for a Climate-Neutral Economy” programme, administered by the Czech Ministry of Industry and Trade, and recognises the importance of the asset for future security of European lithium supply.
The European Commission designated it a Strategic Project under the EU Critical Raw Materials Act, whilst the Czech Government classified it as a Strategic Deposit.
European Metals Holdings shares shot up by around 70% before easing back.
Investors will be delighted to see the deal done with lithium plays attracting nowhere near as much interest as they once did.
“This is a transformational milestone for European Metals and the Cinovec Project,” said Executive Chairman, Keith Coughlan.
“The Czech Government’s award of a grant of up to EUR 360 million represents one of the largest direct project-level funding commitments to a critical raw materials project within the European Union. Following the previously detailed formal recognition of the Project, the approval of such a significant financial contribution clearly demonstrates the support for and importance of Cinovec in the future of European electromobility.
“Coming at a time of renewed positive outlook for lithium and strong geopolitical commitment to Critical Raw Material supply chain security, the grant confirms the significant support at both Czech Government and European Union levels.”
The grant, which will be paid in Czech koruna as a reimbursement of eligible capital expenditure, represents up to 35% of qualifying project costs for investments in designated Czech cohesion regions.
The project has also secured a $36 million grant from the EU Just Transition Fund.
The final grant amount will be confirmed upon formal award and may be less than the maximum €360 million allocation.