European Metals Holdings Regulatory News (EMH)

For immediate release

1 February 2018

EUROPEAN METALS HOLDINGS LIMITED

QUARTERLY ACTIVITIES REPORT - 31 DECEMBER 2017

HIGHLIGHTS

European Metals Holdings Limited ("European Metals" or "the Company") (ASX & AIM: EMH) is pleased to report on its activities and continued progress in the development of the globally significant Cinovec Lithium / Tin Project in Czech Republic during the three month period ending December 2017.

SIGNIFICANT LITHIUM GRADES AND WIDTHS INTERSECTED

On 2 November 2017 the Company announced the successful completion of its six core-hole infill drilling program at the Cinovec Project. A total of 2,697.1m was completed on time and without loss time accidents. Analytical results for three drillholes in the eastern sector and for two drillholes on the western sector of the of the Cinovec South deposit are reported. Results for hole CIS-4 have previously been reported.

The following key points were noted:

FURTHER INCREASE IN INDICATED RESOURCE AT CINOVEC SOUTH

On 28 November 2017 the Company was pleased to announce a further upgrade of its JORC compliant Indicated Mineral Resources at the Cinovec Lithium/Tin Project in the Czech Republic, confirming its status as the largest lithium resource in Europe.

The Company had recently completed a four-month drilling campaign at Cinovec South, comprising six core drillholes for 2,697.1m meters, with the goal of closing 'gaps' in the existing resource model in and around the initial planned mining areas and upgrading part of the resource from the Inferred category to the higher confidence Indicated category. The results, summarised below, have exceeded expectations.

The following key points were noted:

EMH RAISES APPROX AUD 4 MILLION VIA SUBSCRIPTION

On 29 November 2017 European Metals announced a capital raising of GBP 2,281,000 (approximately AUD 4 million (before costs)) via subscriptions to predominantly UK based sophisticated investors.

The raising was completed via an issue of 6,517,142 CDIs at a price of 35p or 61.5 cents and was placed using the Company's capacity under Listing Rule 7.1.

Shard Capital Partners LLP arranged the majority of the subscriptions.

The funds will be used to advance the on-going definitive feasibility on the Cinovec deposit, Europe's largest lithium resource, and for general working capital.

FURTHER PROGRESS TOWARDS MINING LICENCE/CZECH GOVERNMENT - ROAST OPTIMISATION

In February 2017, European Metals 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.

On 19 December 2017, the Company announced that the Cinovec NorthWest Resource had also been added to the Czech State resource register.

This permitting development follows on from the signing of a Memorandum of Understanding ("MoU") on 2 October 2017 with The Ministry of Industry and Trade of the Czech Republic regarding the development of the Cinovec Project. The MoU was signed in Usti nad Labem between the Minister of Industry and Trade, Jiri Havlicek and the Company, in the presence of the representatives of the Australian Embassy and Australian Trade and Investment Commission, 1st Deputy Governor of Usti Region Mr Martin Klika, president of the Tripartite of Usti Region, Mrs Gabriela Nekolova, Chairman of the Regional Bureau of Czechinvest Mrs Alena Hajkova, Chairman of the Regional Mining Bureau Mr Milos Matz, Mayor of the Town of Dubí Mr Petr Pipal and other guests.

On 2 November 2017 the Company noted the results of the recent elections held in the Czech Republic and the debate regarding development of lithium assets within the country leading into the elections. As the sole holder of exploration permits and preliminary mining permits with the preferential right of mining over the Cinovec Project, the Company looks forward to continuing the previous positive engagements with the new Government, once formed, and to rapidly advance development of the project to the mutual benefit of all stakeholders.

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.

The following key points were noted:

TENEMENT SCHEDULE

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.

CONTACT

For further information on this update or the Company generally, please visit our website at www. http://europeanmet.com or contact:

Mr. Keith CoughlanManaging Director

COMPETENT PERSON

Information in this release that relates to exploration results is based on information compiled by Dr Pavel Reichl. Dr Reichl is a Certified Professional Geologist (certified by the American Institute of Professional Geologists), a member of the American Institute of Professional Geologists, a Fellow of the Society of Economic Geologists and is a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and a Qualified Person for the purposes of the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009. Dr Reichl consents to the inclusion in the release of the matters based on his information in the form and context in which it appears. Dr Reichl holds CDIs in European Metals.

The information in this release that relates to Mineral Resources and Exploration Targets has been compiled by Mr Lynn Widenbar. Mr Widenbar, who is a Member of the Australasian Institute of Mining and Metallurgy, is a full time employee of Widenbar and Associates and produced the estimate based on data and geological information supplied by European Metals. Mr Widenbar has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the JORC Code 2012 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Mr Widenbar consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Information included in this release constitutes forward-looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company's business and operations in the future. The company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company's control.

Although the company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

LITHIUM CLASSIFICATION AND CONVERSION FACTORS

Lithium grades are normally presented in percentages or parts per million (ppm). Grades of deposits are also expressed as lithium compounds in percentages, for example as a percent lithium oxide (Li2O) content or percent lithium carbonate (Li2CO3) content.

Lithium carbonate equivalent ("LCE") is the industry standard terminology for, and is equivalent to, Li2CO3. Use of LCE is to provide data comparable with industry reports and is the total equivalent amount of lithium carbonate, assuming the lithium content in the deposit is converted to lithium carbonate, using the conversion rates in the table included below to get an equivalent Li2CO3 value in percent. Use of LCE assumes 100% recovery and no process losses in the extraction of Li2CO3 from the deposit.

Lithium resources and reserves are usually presented in tonnes of LCE or Li.

The standard conversion factors are set out in the table below:

Table: Conversion Factors for Lithium Compounds and Minerals

WEBSITE:

A copy of this announcement is available from the Company's website at www.europeanmet.com.

ENQUIRIES:

The information contained within this announcement is considered to be inside information, for the purposes of Article 7 of EU Regulation 596/2014, prior to its release.