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European Metals Holdings Ltd

European Metals Holdings Ltd Drill Results and Appointment of DFS Manager

European Metals Holdings Ltd (LON:EMH) has today reported on its ongoing infill drilling program and announce analytical results for the first drillhole CIS-4 at the Cinovec Lithium-Tin Project (“the project” or “Cinovec”).

In addition, the Company is pleased to announce the appointment of Mr Craig Reimer as the Manager of its Definitive Feasibility Study.

HIGHLIGHTS

· Infill drilling continues in the southwest section of the deposit, targeting two ‘gaps’ in the resource model that could potentially be targeted for mining in the initial years.

· Altogether, five out of 6 planned drillholes have been completed this year, for a total of 2163.1m.

· Assays have been received for the first drillhole CIS-4, which returned a continuous mineralized intercept of 148.30m averaging 0.40%Li2O, starting at 297.7m drill string depth.

· In addition, the upper section of the main lithium interval contains significant tin and tungsten mineralization: 15.85 meters averaging 0.70% Li2O, 0.29% tin and 0.073% tungsten.

· Experienced Project Manager, Craig Reimer has been appointed to head the Company’s Definitive Feasibility study.

European Metals Managing Director Keith Coughlan said, “We are very pleased with the drilling progress to date and the results for the first hole CIS-4 drilled this year. The lithium and tin mineralization intersected in the first hole is strong and continuous and will increase the size of our current inferred and indicated resource at Cinovec south. This will provide additional options for optimizing production and development schedule. I am particularly pleased with the strong tin and tungsten credits in this part of the Cinovec South deposit.

In addition, we welcome Craig Reimer as the Manager of the Definitive Feasibility Study. Craig is a hugely experienced Project Manager and has worked for numerous clients in Australia and overseas and has been involved with studies, commissioning and construction of large scale projects. Craig will head an excellent study team located in Australia and Czech that is focused on delivering a robust Study in H2 2018.

Drill Program

The current six-hole drill program at Cinovec South is planned to focus on infill drilling in two areas where data density is low and ‘gaps’ in the resource model occur. There are the expectations this will add to the high grade resource at Cinovec South in critical areas where mining will start. It will also assist in the conversion of resources from Inferred to Indicated category, and delivery of material for metallurgical testing. So far five diamond core holes have been completed, and one is underway.

The drill hole information is listed in Table 1 below, and their locations are shown on the sketch below:

Table 1 – Completed drillholes, Cinovec South

Hole ID

North

East

Elevation (m)

Depth (m)

Azimuth

Dip

Comments

CIS-4

-966605.91)

-778582.91)

863

448

16.6

-84.6

Infill, completed

CIS-5

-966607.81)

-778585.11)

862.8

458.8

271.8

-81.28

Infill, completed

CIS-6

-778544.11)

866.2

456

28.8

-86.97

Infill, completed

CIS-7

-778655.31)

864.4

450.3

03)

-903)

Infill, completed

CIS-8

-779163.02)

805

350

3403)

-703)

Infill, completed

CIS-9

-779163.02)

805

0

253)

-683)

ongoing

Hole locations are recorded in the local S-JTSK Krovak grid, 1) Coordinates surveyed, 2) Coordinates determined by GPS, 3) Planned, no inclinometry yet.

(Please refer to the announcement on the European Metals Website for Figure 1: Plan view projected resource blocks, EMH completed and underway drill holes – www.europeanmet.com.)

After geological logging, drill core is cut in half with a diamond saw. Quarter core samples are selected (honouring geological boundaries) and dispatched to ALS (Romania) for preparation and assay; the 3/4 of the core is returned to the core box and stored securely on site. Samples are being prepared and analysed by ALS using ICP and XRF techniques following standard industry practice for lithium and tin deposits. Strict QAQC protocols are observed, including the insertion of a Li standard in random fashion for every 10 core samples.

Mineralized Intercepts and Lithology in CIS-4

The CIS-4 drill hole is collared in rhyolite in the eastern area of the Cinovec South deposit. The main characteristics is the presence of massive greisen/greisenized zone in granite just below its contact with the overlying rhyolite.

In CIS-4, the Li-mineralized greisen and strongly greisenized granite start immediately bellow the rhyolite/granite contact at a depth of 279.7m. Below the contact, variably altered granite with two major and several minor greisen zones were intersected. Underlying albite granite with lithium mica starts at 320.6m and continues to 338.9m drill string depth. The section from 338.9m up to 426m is formed mostly by greisenized Li-mica rich granite. The tin and tungsten mineralization is spatially associated with the strong to pervasive greisen style alteration in the upper 75.3m of the hole. If no Sn cutoff is applied, the interval grades 0.14% Sn, 0.035%W and 0.42% Li2O.

Table 2 below provides summary of the results. According to the geological and block model the greisen bodies (and the mineralized zones) dip to the south, although this fact could not be fully confirmed by core angles observations in the core. The CIS-4 drillhole was angled 16.6 degrees toward NE, with dip -84.6 and the reported intercepts appear close to true thicknesses.

Table 2 – Mineralised intercepts in CIS-4

CIS-4

From

To

Interval (m)

Li2O (%)

Sn (%)

W (%)

Note

279.7

428

148.3

0.40

incl. 4.6m@0.76%Li2O (282.4-287m),
5m@0.82%Li2O (289-294m),
5m@0.76%Li2O (313-318m) and
2m@1.01%Li2O (424-426m)

279.7

295.55

15.85

0.70

0.29

0.073

288.3

294

5.7

0.80

0.40

0.197

incl. 0.7m@1.036%W (288.3-289m)

298.5

303.5

5

0.45

0.10

0.061

302.5

305

2.5

0.34

0.23

0.039

310.3

313

2.7

0.57

0.27

0.003

315

317

2

0.76

0.05

0.188

318

325

7

0.32

0.18

0.012

329.5

332.5

3

0.32

0.31

0.048

331

332.5

1.5

0.34

0.30

0.074

342

343

1

0.62

0.03

0.096

351

355

4

0.32

0.17

0.002

As required under the 2012 JORC Code, details of the current drill program are appended (Table 1).

Definitive Feasibility Study Manager and Team

The Company is pleased to welcome Craig Reimer to the position of DFS Manager. Craig has over 25 years’ experience in project management, engineering management and business management, and has delivered successful international mining projects for previous clients. Craig is a Mechanical Engineer.

He has previously worked on projects for BHP, Vale Inco, Atlas Iron, ENK, Lynas Rare Earths, Boddington Gold Mine, Alcoa, Jacobs and UGL. The projects range from scoping and feasibility studies, to front-end engineering and detail design, and on to construction and commissioning. Craig has previously worked on projects in Australia, UK, USA, Canada, Indonesia, Phillipines and Malaysia.

The Company is also pleased to have retained the services of Grant Harman as Metallurgical Consultant to the DFS. Grant is one of the world’s foremost lithium metallurgist and played a significant role in the Company’s successful PFS.

Grant was previously Manager Lithium Chemicals for Talison Lithium and was involved in the management of the Talison Lithium Carbonate Plant from Scoping Study to Definitive Feasibility Study. He was involved in the design and technical direction of the Talison Test Facility and has more recently been a technical consultant on the Sonora Lithium Project in Mexico. Grant has had previous roles with UGL, SNC Lavalin, CleanTec, and Ausenco.

The expertise and experience of Craig and Grant will be complimented well by the Company’s Czech based team, led by Executive Director Richard Pavlik.

BACKGROUND INFORMATION ON CINOVEC

PROJECT OVERVIEW

Cinovec Lithium/Tin Project

European Metals owns 100% of the Cinovec lithium-tin deposit in the Czech Republic. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 348Mt @ 0.45% Li2O and 0.04% Sn and an Inferred Mineral Resource of 309Mt @ 0.39% Li2O and 0.04% Sn containing a combined 7.0 million tonnes Lithium Carbonate Equivalent and 263kt 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.

The recently completed Preliminary Feasibility Study, conducted by specialist independent consultants, returned a 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.

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