31st July 2017: Quarterly Activities Report and Quarterly Cashflow Report

European Metals Holdings Limited

ARBN 154 618 989

Suite 12, Level 1

11 Ventnor Avenue West Perth WA 6005 PO Box 52

West Perth WA 6872 Phone + 61 8 6141 3500

Fax + 61 6141 3599

Website: www.europeanmet.com

Directors

David Reeves

Non-Executive Chairman

Keith Coughlan

Managing Director

Mr Richard Pavlik

Executive Director

Kiran Morzaria

Non-Executive Director

Company Secretary

Ms Julia Beckett

Corporate Information

ASX: EMH AIM: EMH

Frankfurt: E861.F CDIs on Issue: 130M

31 July 2017 QUARTERLY ACTIVITIES REPORT - JUNE 2017 HIGHLIGHTS

• Preliminary Feasibility Study confirms Cinovec as potentially low cost Lithium Carbonate producer
• Grant of permits
• Infill drilling commenced
• Maiden Ore Reserve
• Board changes
• Interim funding

European Metals Holdings Limited ("European Metals" or "the Company") (ASX & AIM: EMH) is pleased to announce continued progress in the development of its 100% owned globally significant Cinovec Lithium/Tin Project in Czech Republic during the three month period ending June 2017.

PRELIMINARY FEASIBILITY STUDY CONFIRMS CINOVEC AS POTENTIALLY LOW COST LITHIUM CARBONATE PRODUCER

The Company successfully completed the Preliminary Feasibility Study and the results highlight that Cinovec can be a low cost lithium carbonate producer. The highlights of the study are as follows ($ figures quoted in USD):

• Net overall cost of production - $3,483 / tonneLi2CO3

• Net Present Value (NPV) - $540 M (post tax, 8%)

• Internal Rate of Return (IRR) - 21% (post tax)

• Total Capital Cost - $393 M

• Annual production of Battery Grade Lithium Carbonate - 20,800 tonnes

• Study based on only 9.9% of defined Indicated Mineral Resources

  The completion of the PFS follows a comprehensive metallurgical testwork campaign managed by European Metals. The PFS was undertaken by independent consultants who are specialists in the required areas of work. These included:

• Resource Estimation - Widenbar and Associates Pty Ltd

• Mining - Bara Consulting Ltd

• Front‐End Comminution and Beneficiation ("FECAB") - Ausenco Limited

• Lithium Carbonate Plant ("LCP") - Hatch Pty Ltd

The study is based upon a mine life of 21 years processing on average 1.7 Mtpa of ore, producing 20,800 tpa of battery grade lithium carbonate via a sodium sulphate roast.

GRANT OF PERMITS

The Company was informed in late January that the Cinovec South resource estimate was added to the Czech State Register of Mineral deposits, which was the first step towards achieving a mining licence. As a next step, the Preliminary Mining Permit (PMP) covering the majority of the Cinovec Project has now been awarded by the Czech Ministry of Environment.

In addition, the Company was awarded an additional exploration licence for the ground immediately south of the deposit which will allow preparatory geotechnical work for the exploration adit, including excavation of the adit itself when appropriate, to begin. A de-watering permit has also been obtained from the Ohře River Authority which will allow the Company to finalise the de- watering process of the partially flooded underground historic mine shafts well in advance to the commencement of operations.

INFILL DRILLING COMMENCES

The Company commenced a focused infill drilling program at Cinovec South. There are six core drill holes for a total of 2,800m planned in two areas where data density is low and there are 'gaps' in the resource model. This program is expected to add high grade resources in critical areas where mining will start and the results will be utilized during the DFS program to optimize the current mine plan.

MAIDEN ORE RESERVE

Based upon the Preliminary Feasibility Study undertaken for the Cinovec Project, the Company declareda maiden Probable Ore Reserve of 34.5 Mt @ 0.65% Li2O,as detailed below. The Probable Reserves have been declared solely from the Indicated Mineral Resource category and are classified based on a PFS level of study and category of Mineral Resource.

CINOVEC ORE RESERVES SUMMARY
Category	Tonnes	Li	Li20	Sn	W
	(Millions)	%	%	%	%
Proven Ore Reserves	0	0	0	0	0
Probable Ore Reserves	34.5	0.30	0.65	0.09	0.03
Total Ore Reserves	34.5	0.30	0.65	0.09	0.03

Notes to Reserves Table.

1. Probable Ore Reserves have been prepared by Bara International in accordance with the guidelines of the JORC Code (2012).

2. The effective date of the Probable Ore Reserves is June 2017.

3. All figures are rounded to reflect the relative accuracy of the estimate.

4. The operator of the project is Geomet S.R.O. a wholly-owned subsidiary of EMH. Gross and Net Attributable Probable Ore Reserves are the same.

5. Any apparent inconsistencies are due to rounding errors.

The Ore Reserve was based on the Mineral Resource for the Cinovec deposit prepared by Widenbar and Associates and issued in February 2017. The Mineral Resource is reported in the report Cinovec Resource Estimation published by Widenbar and Associates and is reported in accordance with the JORC 2012 guidelines. The table below summarises the Mineral Resource declared:

CINOVEC 2017 RESOURCE
Cutoff	Tonnes	Li	Li2O	Sn	W
%	(Millions)	%	%	%	%
INDICATED	0.1%	347.7	0.21	0.45	0.04	0.015
INFERRED	0.1%	308.8	0.18	0.39	0.04	0.014
TOTAL	0.1%	656.5	0.20	0.43	0.04	0.014

BOARD CHANGES

Mr Richard Pavlik was appointed to the Board to replace Mr Pavel Reichl, who resigned on his request to pursue other interests. Mr Pavlik is the General Manager of Geomet s.r.o., the Company's wholly owned Czech subsidiary, and is a highly experienced Czech mining executive. Mr Pavlik holds a Master's Degree in Mining Engineer from the Technical University of Ostrava in Czech Republic. He is the former Chief Project Manager and Advisor to the Chief Executive Officer at OKD. OKD has been a major coal producer in the Czech Republic. He has almost 30 years of relevant industry experience in the Czech Republic.

INTERIM FUNDING

The Company is actively engaged in discussions with potential European strategic partners with regards to the funding and development of the Cinovec Project. Given the high level of interest in Europe in the lithium market, the Company is confident of a successful outcome in the near term in this regard. In order to allow sufficient time to finalise discussions and properly assess the various options open to the Company, the Company arranged an interim funding facility to maintain momentum in developing the project.

This facility has been provided by an Australian based sophisticated investor, 6466 Investments Pty Ltd, and allows for the draw-down of up to AUD 2 million in tranches as required over 12 months. Any funds drawn down will convert to CDI's in the Company at a 10% discount to the 10 day vwap in the Company's securities. The funds will be used in the preparation of the Company's Definitive Feasibility Study, for further drilling and general working capital. The issue of shares pursuant to draw-downs does not require shareholder approval.

SUMMARY

European Metals has had another productive quarter with several key developments which are all very positive. The Company is now focused on accelerating the project towards development of the largest lithium resource in Europe through completion of the definitive feasibility study.

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%Li2Oand 0.04% Sn and an Inferred Mineral Resource of 309Mt @ 0.39% Li2Oand 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.

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 Coughlan Managing 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