RE: Emh3 Nov 2020 11:46
I'm not sure it is truly derisked, that is what they wrote in their investor presentation, yes. However, the CEZ participation isn't just free money given to EMH. It is a convertible loan, not even given to EMH but to the Geomet a.s. subsidiary, with an 8% interest rate. They can then convert it to equity (5%, and they have 51% in Geomet).
So the only thing that is derisked is that the company won't run out of cash in the next 2-4 quarters. What happens then is a big unknown. The Germans (Zinnwald, Erris) on the other side of the border are definitely much less optimistic about the project.
Also the original plan counted with extracting other metals (tin, perhaps tungsten...) but after research done by Severoceske doly (CEZ subsidiary) they found out this doesn't make sense (percentage not high enough, not magnetic enough) and the only other thing besides lithium that can be processed (according to current plan) could be cement production.
The original feasibility study said Avg Production Cost (without credits) $5,211 /t and Avg Production Cost (with credits) $3,483/t. The second number now seems out of question and the reality will be somewhere in between ($4500-$5000/t ?). So the entire project can be revaluated.