European Metals Share Discussion Threads

[myst1] 19/1/2018 15:13

My entry for the mining stocks to double this year on this site:

I'll go for European Metals Holdings (EMH)
Currently 36.75p

Background:

EMH controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project.

Cinovec is the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource. The resource contains a combined 7.22 million tonnes Lithium Carbonate Equivalent and 278kt of tin.

Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed 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. As the deposit lies in an active mining region, it has strong community support.

In October this year EMH signed a MoU with the Czech Government who understand the importance of the resource to the countries economy. See below:



Valuation:

Ignoring the superior location and based on EV/ resource, compared to its peers EMH is undervalued by a factor of at least 10. See below comparison of companies worldwide including Africa:



And a comparison within Europe:

Company - Location - JORC Resource Estimate (Mt) - LI2O grade%

EMH - Cinovec, Czech Rep - 722mt - 0.50%
Rio Tinto - Jadar, Serbia - 136mt - 1.3%
Plymouth Minerals - San Jose, Spain - 25mt - 0.9%
Novo Litio - Sepeda, Portugal - 10mt - 1.0%
European Lithium - Carinthia, Austria - 6.3mt - 1.17%
Keliber - Finland - 8mt @ 1.1%

European Lithium: 75 m€ MCAP
Europen Metals Holdings: 55 m€ MCAP

Why is there such a valuation gap and thus an opportunity at these levels?:

The Market doesn't understand the relatively low grade mica type deposit. However the PFS highlighted one of the lowest cost producers of battery grade lithium carbonate. Testworks have shown they can produce battery grade product with >99.5% pure lithium carbonate.”

On this same issue I received an email from the MD a few weeks ago along the lines of the following:

'With regards to low grade and the mica – our cost of production number should allay anyone’s fears. Certainly, we are continuing to educate investors about the benefits of lithium micas and the pilot plant test work that will take place will confirm everything. '

Perhaps the main reason for the huge valuation gap is following the MoU in October and due to its importance, Cinovec was the subject of political posturing between politicians during the run in to the elections and this created uncertainty in the market. The new Government is now being formed and the new trade and industry minister will be in the position to endorse the MoU including a possible JV in the next few weeks during January.

I believe this will act as a catalyst to propel the share price to a more reasonable level compared to its peers and I can see the share price multiples of todays, before the DFS at the end of 2018.

[myst1] 19/1/2018 15:10

Just as a reminder for those who think that the Government want to delay this:



In the Czech Republic, negotiations are continuing with the project partners to create a domestic integrated chain of Lithium production and processing, including communication with regional government partners. This means thousands of new jobs for the Czech Republic not only in the mining and processing of ores, but also in downstream high-tech industries. This will significantly support the employment and restructuring of the industry not only in the �st� region but also throughout the Czech Republic. At the same time there will be significant development of Czech science, research and education system.

The goal of European Metals Holdings Limited is to create a complete chain of lithium production and processing in the Czech Republic, bringing thousands of new jobs not only in the mining and processing of ores, but also in the downstream high-tech industries, which will significantly support employment and industrial restructuring in the �st� region, but also throughout the Czech Republic. At the same time there will be significant development of Czech science, research and education system. Negotiations with partners take place according to plans, including communication with regional government partners. A similar lithium ore extraction project is currently being carried out on the German side of C�novka. The project in neighboring Germany implemented by the fully private Canadian-German consortium has significant support from the government and the region. Germany is aware of the economic and social benefits of lithium mining and processing, and the provincial government has supported this project from facilitating administrative operations to zero fees from mined minerals.

The Arca Capital investment group is one of EMH's largest Czech shareholders, whose Czech subsidiary Geomet is conducting lithium mining exploration under C�novec and plans to carry out its mining and processing in the coming years. We consider the project to be real and perspective and our intention is to support it and develop it. We participate actively in the project, as part of the development of the project and the setting up of cooperation with other entities, communication with regional partners of the state administration also takes place from our side. At the same time we invite representatives of the Ministry of the Environment and the Ministry of Industry and Trade, including the state enterprise Diamo. The project will significantly support research and development not only in the region but throughout the Czech Republic, while promoting the education and employment of the qualified skilled labor, so it should

[myst1] 19/1/2018 15:08

I wonder where VW will get there lithium from?

[myst1] 19/1/2018 15:06

Taken from Hot Copper:

We all know that lithium has become a bit of a big deal. One of the epicenters of activity is Perth in Western Australia. Perth is also a favorite stop during my world travels. The former British Empire penal colony has more newly minted lithium “paper” millionaires per capita than any place on the planet. The proud mining heritage of the “wild west” of Oz and coupled with the progeny of penal colony era seems to have created a group of retail investors unafraid to roll the proverbial dice on any company with “lithium”; in its name. These denizens of WA have correctly grasped a major investing trend: green energy metals – particularly lithium. Unfortunately, most remain very fuzzy on the details and nuances of their new favorite industry. Wild swings in ASX stocks based on internet and Hot Copperish hype are the norm. Yesterday the rest of the lithium world seemed seemed to fall prey to emotion rather than analysis. Yes, that was a bit of a digression. I will try to stay on task because we don’t have much time today.
Let me cut to the chase so I can take Fiona back out in the snow:
There is no reason for the major lithium related stocks to be “hit” due to fears of oversupply and dropping prices – whether some are currently overvalued is a different discussion we won’t deal with today.
Pundits with limited knowledge are making a big deal of the potential for oversupply based on: the soon to be announced SQM – Corfo agreement, new projects in Australia coming online and the recent Orocobre announcement of plans to expand and Toyota Tsusho’s equity investment. These items along with the fact that price in China as reported by one media outlet dropped a few percent are taken as evidence that the days of high pricing and tight market are coming to an end. Don't bet on it. The tight market will remain into the next decade. That doesn't mean China prices won't fluctuate wildly at times. Let me spout some lithium heresy: the price in China isn't that important, focus on the price in Japan, Korea and ROW. Before most of you were interested in the lightest metal, we have seen widely disconnected prices before.
My perspective:
The salient lithium price for lithium brine producers outside of China is NOT the price in the Middle Kingdom. SQM’s average price is in the $14/kg range vs $20 plus in China. Yes, SQM sells in China as well as all other key markets but a price drop in China has virtually no impact on their bottom line because of both their geographic diversity and the fact they are not selling in China at the high end of the price spectrum. SQM is transparent in revealing their average pricing based on the way they report. If you take the time to scour the world’s trade statistics (and few do); the price picture becomes even more obvious.
Japan imported more than 16K MT of lithium carbonate in 2017 – greater than 75% came from South America and an average price in the $11 range. This price will rise in 2018 and is not exposed to the vagaries of the China market. The independent hard rock converters in China buying spodumene on the open market and required to pay 17% VAT on the exports cannot compete at this price.
Japan imported over 17K MT of lithium hydroxide in 2017. Over 60% of the imports were from China at average prices less than $12/kg. Both Albemarle and FMC (who now has high cost carbonate feedstock based capacity in China) are bending over backwards to supply the Tesla supply chain via Panasonic. The low price is driven by western suppliers operating in China.Both ALB and FMC will get higher hydroxide prices in Japan in 2018. They should given their current price is several USD/kg below the global average (ex-China) price.
FMC also supplies Japan from the US at below market prices. My point: worrying about the historically volatile pricing in China when analyzing the future prospects of a low cost player like SQM who isn’t exposed to the volatility at the high end of the China market or the foolishness of ALB and FMC in hydroxide shows a complete lack of understanding of how the lithium market works. SQM’s hydroxide price is much more judicious across the globe. They have some upside in 2018 too.
Japan still represents a significant and fast growing piece of the world LCE market as does Korea. If I showed you the data from Korea, the story would be very similar except Ganfeng is smart enough to charge high prices for hydroxide in Korea and let ALB and FMC race to the bottom with low hydroxide price next door in Japan.
I have already written extensively on my thoughts regarding the lithium supply situation. In the next couple years’ new brine capacity coming from South America is limited to whatever ALB can eke out of the underperforming LaNegra II and SQM’s relatively small (15K MT)expansion. Don’t expect more than 25 to 30K MT in the next couple years. Large scale brine supply increases are 3-5 years away.
In the next two years the market will grow close to 75K MT. Much of this has to come from hard rock or marginal increases in China brine. Don’t forget lithium inventories are at all time lows and need to be rebuilt effectively adding another significant increment to near term “demand”.
Go ahead and believe RBC or Roskill on supply if you want but before you do, check their track records. Past isn’t necessarily prologue but in this case I think you are safe assuming it is.
For western based lithium chemical producers (SQM, ALB, FMC and ORE) what I have called the new normal pricing of $12 - $15/kg seems a good bet into the next decade. Of course if Luke and company want to price lower for “strategicR21; reasons….. Well, as they say: “you can’t fix stupid”. Of course, since it is just us, I will say that – I would never say that publicly.
Since this is just us, I am going to forgo editing this and hope you will forgive me.

[steeplejack] 19/1/2018 12:26

Taken from LSE site.SQM, one of the leading Lithium producers in the world, reached a deal with the Chilean Government to dramatically increase their production. The increase in production will be felt throughout the industry for the next 5-10 years. Lithium stocks sold off heavily due to fears that oversupply would hit the market. SQM£s New Deal and the Lithium Market Sell OffSQM finally ended an almost four year long dispute with the Chilean Government, with the latter allowing the company to expand their lithium production quota from around roughly 50-60K tonnes today up to 216,000 tonnes per annum (tpa) through 2025. As a result of this news, the markets responded by selling off lithium stocks across the board out of worries of an oversupply caused by SQM flooding the markets. Here£s our take on what Lithium investors should consider following this news out of SQM. Impact on the Market: In our opinion, while this is major news affecting the potential supply outlook, it may not meaningfully disrupt markets for another couple of years. While it£s not as extensive as starting from scratch, a brownfield expansion like this for SQM will by no means be an instantaneous change. It£s not like they can just flip a switch and flood the market with new supply. Thus, in the shorter term, the story has not changed. Pricing: We believe the Oligopoly, and SQM who will now be the driving force of that Oligopoly, will still strive to maintain price stability in order to create the most favorable environment for themselves. As the lowest cost lithium producer, SQM is in the driver seat because the major customers will be coming to them first. So they will bring new supply on in lockstep with market demand. Remember, pricing is important because the higher the pricing = higher margins = Higher Profits for a company = Happier Shareholders (potentially of course£.if only it was that easy!). Junior Miners: The companies most affected by the news are the junior miners. Those that come online in the next 24 months might be able to carve out a piece of the pie for themselves. But in the longer term horizon, it£ll be tougher for the newer entrants to come into the market. SQM will have the capacity to keep competitors out of the market if they choose. SQM£s announcement must not have been met with great fanfare from future producers who are still 3-5 years out from production. To this point in particular, the financing market could be more challenging following this news for junior miners that still need financing.

[myst1] 18/1/2018 07:50

17 Jan '18 - 08:58 - 1160 of 1161

'nothing to chat about'..

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[simonsaid1] 17/1/2018 09:02

Everyone's on LSE.

[ahbroad] 17/1/2018 08:58

nothing to chat about..

[frankie83] 12/1/2018 21:21

Not much chat on here anymore

[bountyhunter] 03/1/2018 13:35

a couple of weeks old but worth posting I think to keep us all up to date here...

[simonsaid1] 03/1/2018 08:25

Not strange - most of the EMH chat happens on the LSE forum.

[luisfrg] 03/1/2018 08:12

No comments on here in weeks very strange!

[runthejoules] 19/12/2017 22:34

Yes, but sadly I hold more of this :-(

[steeplejack] 19/12/2017 19:42

Luckily yes.

[ifthecapfits] 19/12/2017 09:36

O/T - sort of. Anyone here hold BCN as well?

[runthejoules] 19/12/2017 08:49

It was never going to set the share price on fire but nice to hear about the roast, which is material, and that despite the Babis nonsense they are getting on with procedural stuff. I think a little reassurance is welcome. There won't be any timeline to production till the politics is sorted out (and then the offtakers).

[dozey3] 19/12/2017 07:27

A large hullabaloo about very little, unless I’ve missed something. Let’s see a time-line leading up to production.

[runthejoules] 19/12/2017 07:24

FURTHER PROGRESS TOWARDS MINING LICENCE; ROAST OPTIMISATION



In February 2017 European Metals Holdings Limited ("European Metals" or "the Company") announced that the Cinovec South Resource had been added to the Czech State resource register, the first step in the process for the granting of a mining permit.

The Company is now pleased to announce that the Cinovec NorthWest Resource has also been added to the Czech State resource register.

Additionally, recent optimisation test work has demonstrated the ability to reduce roast temperatures and duration which can result in significant cost savings both in CAPEX and OPEX.

Key Points:



· NorthWest Resource added to Czech State resource register - majority of Cinovec Resource now officially recognised by Czech mining authorities



· Optimisation test work indicates potential significant savings in both OPEX and CAPEX



European Metals CEO Keith Coughlan said: "Subsequent to a submission we made to the State Authority, the Cinovec NorthWest resource estimate was approved by a Ministerial Experts Committee for Final reports and projects and placed on the State Register of mineral deposits. We are very pleased with this development and see it as confirmation that the Company is moving forward within the regulatory framework of the Czech Republic and in full consultation with the relevant Czech Ministries. This approval is a pre-requisite for receiving a mining permit in this area.

The placing of the NorthWest resource on the State Register, in addition to those portions of the deposit previously added, finalises the first stage of the permitting process. The Company will now apply for a preliminary mining permit over this area to join the previously awarded preliminary mining permits over the southern and eastern portion of the deposit.

The Company continues to progress the development of its industry proven, sulphate roast-based flow-sheet of mica-concentrate from the Cinovec Project. It is very pleasing to see the recent optimisation testwork produce strong indications of potential cost savings in both OPEX and CAPEX. Our Preliminary Feasibility Study has highlighted the potential for Cinovec to be a low cost producer of battery grade lithium carbonate. Any further savings will only enhance the already strong economics. In addition, our current lock cycle testwork program has again shown we are able to produce battery grade product with >99.5% pure lithium carbonate."

Further Information



The process for the award of a mining permit commences with the placing of a mineral resource on the State Resource Registry and receiving a certificate of an 'exclusive mineral deposit'. This is achieved by defending a resource calculation and a preliminary technical and economic analysis proving the studied resource has a quality consistent with a potentially mined deposit. The addition to the State Resource Register means that civic development on top of the area is restricted and it allows the Company to apply for setting a preliminary mining space, which is a step toward obtaining the final mining permit.



BACKGROUND INFORMATION ON CINOVEC

PROJECT OVERVIEW

Cinovec Lithium/Tin Project

European Metals, through its wholly owned Subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 372Mt @ 0.44% Li2O and 0.04% Sn and an Inferred Mineral Resource of 324Mt @ 0.39% Li2O and 0.04% Sn containing a combined 7.22 million tonnes Lithium Carbonate Equivalent and 278kt of tin. An initial Probable Ore Reserve of 34.5Mt @ 0.65% Li2O and 0.09% Sn has been declared to cover the first 20 years mining at an output of 20,800tpa of lithium carbonate.

This makes Cinovec the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource.

The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining operation.

EMH has completed a Preliminary Feasibility Study, conducted by specialist independent consultants, which indicated a return post tax NPV of USD540m and an IRR of 21%. It confirmed the deposit is be amenable to bulk underground mining. Metallurgical test work has produced both battery grade lithium carbonate and high-grade tin concentrate at excellent recoveries. Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed 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. As the deposit lies in an active mining region, it has strong community support.

The economic viability of Cinovec has been enhanced by the recent strong increase in demand for lithium globally, and within Europe specifically.

[weidner] 19/12/2017 00:59

capitulation imminent

[pierre oreilly] 01/12/2017 18:21

jim slater's (the man i've followed and has made me well off enough to retire in my forties) number one rule - never invest in holes in the ground.

hth white. it could save you a lot of money. I'll repost this on the emh thread to help those there.

[scrutable] 30/11/2017 23:33

Dis anyone posting here go to today's AGM and if so do you have anything of interest to tell those of us unable to attend?