The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Interestingly, the ESG reporting has been updated today from December: https://esg.socialsuitehq.com/mob-public-dashboard/european-metals-?report=1637305297946x302952839446447800
Governance ... 33% was 17%
Planet ... 9% was 2%
People ... 14% was 0%
Prosperity ... 16% was 7%
The only report of concrete progress you'll see this half of the year.
“CEZ wants to decide on lithium mining at Cínovec in the Ore Mountains this year. This was stated by company spokesperson Sona Holingerová. The raw material is used, among other things, in the production of batteries for electric cars. CEZ intends to build the battery factory on the site of the former lignite power plant in Prunérov in Chomutovskogo. CEZ has now officially withdrawn from drawing money from the just transformation fund for the gigafactory. This was said by regional councilor Iva Dvoráková (ODS).”
"We are not abandoning the site or the gigafactory project, we will just look for other financial sources. But the lithium mining project is now more urgent," said Holingerová. "The project continues according to plan and we want to make a decision this year. The decision will precede the completion of the final feasibility study, which is being worked on, and the preparation of the financing of the project," she added.
From: https://www.newstream.cz/zpravy-z-firem/o-tezbe-lithia-z-cinovce-rozhodne-cez-jeste-letos
Now a month behind previous reporting schedule - current period is delayed: https://esg.socialsuitehq.com/mob-public-dashboard/european-metals-?report=1637305297946x302952839446447800
Also his LinkedIn shows he’s ended at EMH: https://www.linkedin.com/in/david-koch-a64b07217
Maybe Sid - David no longer on this page: https://www.europeanmet.com/board-and-management/ but Shannon is
Independent valuation will use standard CAPM formula or relative valuation based on production capacity
Agreement details here Scob:
https://www.europeanmet.com/wp-content/uploads/EMH-Shareholder-Circular-Final-To-lodge-on-AIM-incl-Proxy-Form-v2.pdf
And:
https://www.investi.com.au/api/announcements/emh/2df48df2-cc4.pdf
That price floor roughly matches Matt Fernley's estimated marginal cost of production: https://www.batterymaterialsreview.com/ourblogs/why-i-think-lithium-prices-will-bounce/
The Just Transition Fund is for coal mining areas transitioning to Green economy and includes reskilling of the workforce - not incentive enough perhaps, but the price of lithium and their more recent presentations indicate intention to mine.
If it was 3 or 4 years ago then that was before they bought 51% Geomet…
Ant - good analysis and agreed that the minority stake negates EMH being a strategic investment. Why wouldn’t CEZ want to mine? They already have their own coal mining operations.
Regarding F, yes CEZ couldn’t have bought us out until 28th April this year. Also, I believe that the agreement states that shareholders in Geomet may only transfer all or none of their shares, no partial transfers and CEZ gets first refusal.
Is anyone tracking past lithium mine transactions and what this would value EMH at? I make it between £1.99 and £3.19 based mostly on valuation by planned capacity. Lower end is for projects with no offtakes, higher end for offtakes announced.
Shares in Geomet unlock around 28th April on 3rd anniversary of completion with CEZ.
Keith got out his armchair: https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/metals/031623-ec-includes-copper-and-manganese-in-critical-minerals-launches-strategic-minerals-list
WACC of 6%? Living in La-La land. Latest data shows Mining industry average is over 10%: https://pages.stern.nyu.edu/~adamodar/pc/datasets/waccEurope.xls. That will cut into NPV…
£107m average annual Capex over 5 years for a 51% of a mine and processing plant and 10% of a gigafactory ... seems low if planning additional Cinovec production volume.
FT article (search result): https://www.google.com/search?client=safari&rls=en&q=vulcan+increases+lithum+targets+as+demand+grows+from+carmakers&ie=UTF-8&oe=UTF-8
Increases production target to 24,000tpa from 15,000. Says they predict average lithium price of $37,000 to 2040. Highest I've heard of...
Internal politics at CEZ? https://ekonomickydenik-cz.translate.goog/dobyvateli-lithia-se-moc-nedarilo-skoncil-ve-ztrate-ze-struktur-zmizel-zastupce-cezu/?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en-US&_x_tr_pto=wapp
We’re still waiting for a decision on this too - material to the DFS and investment decisions: https://www.wsj.com/articles/eu-delays-labeling-lithium-toxic-as-concerns-from-ev-industry-mount-11670639073
At this rate, they might be in production before us Colin!
Skelly - not sure where you’ve been reading that battery factories are printing profits hand over fist.