European Metals Holding (LON: EMH) shares jumped Monday morning after the company revealed that the Cinovec Project has now been classified as a Strategic Project for the Czech Republic's Usti Region.
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EMH shares rose 12% on the news at the start of the session, although before today, they were down 40% in the last 12 months.
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The Cinovec project is said to host Europe's largest lithium resource and one of the largest undeveloped tin resources in the World, and EMH believes it is well-positioned for the rising demand for battery materials.
Being classified as a strategic project means it now has priority for grant funding from the Just Transition Fund co-funding. The company said the list of Strategic Projects has been approved by the Czech Central Government, the Czech Regional Government in Usti, and the European Commission.
For the Czech Republic, the Just Transition fund has been allocated approximately €1.64 billion, with the Usti region allocated around €632 million.
EMH acknowledged that there can be no certainty but said it said it is confident Cinovec will receive a significant portion of the funds applied for from the JTF for the project.
The Cinovec Project has been assigned the maximum possible JTF grant of roughly €49 million, subject to obtaining the necessary permits for the early-stage work programmes, passing through the application process, and available funds.
Geomet s.r.o — the Cinovec project company — will apply for JTF Grant funding for the maximum amount of €49 million.
“The proposed grants from the Just Transition Fund could play an important part in accelerating the development of the Cinovec Project. For example, the initial entry into the deposit via twin declines and ancillary road network at the proposed Dukla site are likely to be early-stage beneficiaries of this funding,” said Executive Chairman Keith Coughlan.
“This could reduce the time until first ore is produced by the Cinovec Project post final investment decision. As the funding is in the form of a non-repayable grant this could also have the additional benefit of not diluting the existing shareholders of the company,” Coughlan added.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.