European Metals Share Discussion Threads

[simonsaid1] 02/11/2017 12:08

Hyper you sound knowledgable on the geo side and genuinely neutral, sorry I can't help more on the tech side. All I can say is whenever you assess EMH, remember this is not solely a lithium play, the advantages of this site is A) the size if the mine was fully exploited, B) already a former mine so fewer hurdles and most importantly C) the significant tin and tungsten credits to offset hard rock extraction costs. There are deposits with higher Li grades around but they're generally smaller in overall area, harder to reach, and do not turn up such useful other materials in the mining process.

Strongly advise a good look around EMH's website and emailing the CEO Keith Coughlan who is always happy to talk to PI's and particularly on the mining side.

[luxaeterna1] 02/11/2017 12:00

Yes, the beauty of Cinovec's Lithium resource is that the Lithium ore is ferro-magnetic, crush the raw ore with basic tools and you'll easily separate the valuable tin/tungsten/Lithium to a much higher grade. They could even sell magnetic-Lithium to other processing sites if they wanted to, you could get that production line up in months.

[simonsaid1] 02/11/2017 11:45

It's a perfect storm. Once the political storm fully clears (JV with Diamo to be announced imminently), EMH is in a much better position than it was in even before all this political stuff happened. The big question marks used to be funding and red tape - with the Czech state as an investor, both of those are answered. The other issue was drill results and resource upgrade delays, but now we've had the drill results the resource upgrade can follow (data from prior to feed latter).

Top work to anyone who stuck it out and topped up sub 40p. In any case, I haven't seen such a perfect storm in AIM in a very long time (not since HNR when it was 12p but that's not AIM lol). This could go supernova.

[5chipper] 02/11/2017 11:33

Bought back in here this morning. Price seems to have been greatly squeezed with the political fears. M/cap of £50m seems very reasonable for what's on offer here.

[qprallan] 02/11/2017 10:50

Email from KC today:


Hi Allan



Thanks for your email – it hasn’t been a happy couple of weeks!

We made a simple statement in the release this morning about what is happening in country and referred to our tenure over Cinovec.

We have full legislative rights and they are strong, but sometimes it doesn’t pay to thump your own chest too loudly.

We have taken the approach of proceeding gently whilst the post election mess quietens down.

Whilst this has been more than a little frustrating (for us as well as shareholders) I believe that t has been the correct way to play it and we are now enjoying significantly better PR in Czech press. This will be very beneficial when we get back to the table with the new government.



The bottom line is that the Czech Republic is a western democracy and a member of the EU. Nothing has changed with regards to our rights, permits and licenses.



Kind regards

Keith

[myst1] 02/11/2017 10:26

On the political situation:

[myst1] 02/11/2017 10:24

Now this political hot air is beginning to blow over, how much should EMH be worth?

Just a reminder of how we are valued against our peers.



Things have moved on since this table was produced. Eg the value of AVZ has increased substantially and our value has decreased. The EV/ Resource figure for AVZ is currently $23 and our figure is $15.

Note that AVZ figures are based on an exploration target only and EMH figures don't include today's drill results.

Forget the fact that in comparison, Cinovec is centrally located for European end-users and is well serviced by infrastructure, a road adjacent to the deposit, rail lines located 5 km north and 8 km south of the deposit and an active 22 kV transmission line running to the historic mine.

Based on this table if we were valued 10 times more we would still look cheap!

The reason for this anomaly can be summarized in two words Politics and Finance. The needs of the Czech Government and Europe as a whole require that these two issues will be dealt with imminently.

As I've said previously imo we now have the 'perfect storm' for serious share price appreciation.

[steeplejack] 02/11/2017 10:16

Good summary Simon

[simonsaid1] 02/11/2017 10:12

Hyper Al, you are missing 3 things. Firstly, the size of the resource itself. All studies so far are based on just a fraction of the whole mine, as it wouldn't be economic to try to operate across the whole mine area from the get-go, but that will come. This is an absolutely enormous area.

Secondly, the significant tin and tungsten changes the economics of the project (referred to in the RNS by their periodic table names, Sn and W respectively). The economic viability is based on the whole spectrum of extractable minerals, not just lithium. These are referred to as credits and are a huge part of the appeal and economics of Cinovec, which is after all a former tin mine with plenty left to give.

Thirdly, the standard we apply for lithium grades that can be extracted economically is changing, due to the soaring price of lithium. This is part of the investment case for Cinovec, a bet on future lithium shortage and price rises. This has already been happening in a big way in recent years.

The result of all this will be clear in the resource upgrade which is now being prepared.

The other factor to consider, with regards SP, is that the major question of forward funding looks like it's about to be answered, as Czech state enterprise Diamo looks set to take a significant stake/JV position. This will mean more funding for the project, a fantastic guarantor, and the removal of all-important red tape regarding the mining operations.

Combine all these factors together and you see why the trading pool here is so small, most EMH shares are 'sticky' for a reason.

[nibble] 02/11/2017 09:25

I think the play here is the potential massive European demand for Lithium in the near future. If you're looking longer term, the current mining economics may not be relevant.

Agree that the current political posturing isn't helping, but we'll have to wait and see how good EMH's in-country contacts are.

[bookwormrobert] 02/11/2017 08:21

Hyper Al - you hit the nail on the head here. Lithium grades are very low, in fact throughout Cinovec. Don't get me wrong, there is a vast amount of lithium there, but it will be expensive to mine. According to the PFS, EMH require $400m of capex and the IRR is only 21% (tin credits included). Usually, mine projects with financial figures like this simply don't get built. The current Czech politic game just adds to this project's problems.

[telbap] 31/10/2017 08:10

Sad as it seems unless these guys get a serious major behind them, we will be back at 5p before we know it. They either have to grab the bull by the horns and go for it with a huge raise , enough to get a CPR done, and facilitate us to working mine stage, then they will be queuing at the door.

[telbap] 31/10/2017 08:08

Nope, that end put.paid to that....30p here we come.