European Metals : CINOVEC TO PRODUCE LOW CARBON LITHIUM

23 November 2021

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LCA QUANTIFIES CINOVEC LITHIUM CHEMICAL PRODUCTION CO2 EMISSIONS AND MITIGATION SCENARIOS IDENTIFIED TO PRODUCE LOW CARBON PRODUCTS

CEZ TO PROVIDE GREEN POWER TO PROJECT

HIGHLIGHTS

• Cinovec's Global Warming Potential has been modelled using ISO-compliant LCA by consultancy Minviro Ltd, providing clear resolution of the drivers of the project's emissions.
• GWP Impact Mitigation Scenarios identified for the Cinovec Project, potentially including solar power, electric mining fleet, Hypex Bio explosives and use of green hydrogen for thermal energy (Cinovec Decarbonised Case) which could make Cinovec's lithium chemicals have some of the lowest CO2 intensity in the world if all impact mitigation strategies are pursued.
• CEZ plans to provide 100% renewable energy to power the mine, the Front-End Comminution and Beneficiation (FECAB) and Lithium Chemical Plants (LCP)
• LCA also assessed Acidification Potential (AP), Water Use and Land Use (per ISO standards).
• • AP is comparable to Chilean Brine but only 13% of the equivalent for Australian spodumene processed in China.
  • Cinovec Water Use projected to be lower than all benchmarks and <5% of Chilean Brine Water Use even when water evaporated from the brine is not included in the water use calculation.

European Metals Holdings Limited ("EMH", or "the Company") (ASX & AIM: EMH, OTC - Nasdaq Intl ADS: EMHXY) is pleased to provide an update in relation to the outcomes of the Life Cycle Assessment conducted by Minviro in relation to lithium battery chemicals production from the Cinovec mine.

Keith Coughlan, Executive Chairman, said "We are extremely pleased that the Minviro LCA has confirmed what we have believed to be the case for a long time - Cinovec has the potential to have the lowest overall environmental impacts compared to other conventional lithium battery metals projects not only in Europe but also on a global basis. With the use of solar power and other optimisations the Cinovec Project will set a standard by which all other conventional lithium producers could be judged. We expect the environmental credentials of the Cinovec Project will help make its product valuable to end users, particularly in light of the new EU requirements in relation to greenhouse emissions. Not only does the optimised model demonstrate very low CO2 emissions, the Project also delivers excellent results with regards to acidification and water consumption. As Cinovec is an historic underground mine with minimal social and environmental impacts, the entire ESG credentials of the Project are very strong.

In addition, we expect to shortly provide a market update covering the additional benefits of a mine backfill study and a revised PFS which updates the project economics and value of the Project."

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23 November 2021

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MINE, FECAB AND LCP TO BE POWERED BY SOLAR POWER PLANT

CEZ, EMH's joint venture partner in in the Cinovec Lithium Project, plans to provide 100% renewable energy to power the mine, the Front-EndComminution and Beneficiation (FECAB) And Lithium Chemical Plants (LCP). CEZ currently owns renewables installations with aggregate power generation capacity of 1720 MW. This capacity will increase by 1500 MW by 2025.

The renewable energy sources will be capable of providing all the required power for all aspects of the Cinovec Project including the mine, the FECAB plant as well as the Lithium Chemical Plant under normal operating conditions. The Company is also considering the use of electric mining equipment to further reduce the CO2 footprint at Cinovec.

CINOVEC LIFE CYCLE ASSESSMENT

As previously announced, Minviro (a UK-based and globally recognised sustainability and life cycle assessment consultancy) was engaged to conduct a Life Cycle Assessment (LCA) for the Cinovec Project's proposed lithium battery-grade chemicals, Lithium Carbonate (Li2CO3) and Lithium Hydroxide Monohydrate (LiOH) (refer to the Company's ASX release dated 10 June 2021). The LCA was completed at the end of 3Q21 and the full results underwent independent external QA/QC peer review, including ISO compliance review, before finalisation.

The Minviro work has assessed the LCA for both Li2CO3 and LiOH based upon the PFS studies published by EMH for Li2CO3 (refer to the Company's ASX release dated 19 April 2017) and LiOH (refer to the Company's ASX release dated 17 June 2019) (together the PFS). The work included assessments of Global Warming Potential (GWP), Acidification Potential (AP), Water Use and Land Use compared with the most relevant global benchmarks with proven flowsheets for lithium chemicals production (Chilean brine; Australian spodumene; and US sedimentary clay).

Minviro also assessed GWP reduction strategies being advanced by Geomet management (as part of the ongoing Definitive Feasibility Study) to reduce the carbon footprint of Cinovec, including full electrification of the mine and mining vehicle fleet; sourcing all electrical power for both the mine and lithium processing plant from a proposed co-developed photovoltaic cell array adjacent to the Cinovec processing plant; and green hydrogen as replacement for conventional gas in the ore roasting process (Decarbonization Case).

The LCA was conducted according to the requirements of the ISO-14040:2006 and ISO-14044:2006, including a third-party review from LCA experts to ensure that the LCA study is scientifically robust.

Results of the Life Cycle Assessment

LiOH Production

LiOH products can have different environmental impacts depending on the natural resource they are produced from and the process technology chosen in flowsheets. A comparison of how the Cínovec LiOH product will compare to existing process pathways is shown below in Figure 1.

The GWP for the Cinovec PFS case is expected to be around 16.6 kg CO2 eq. per kg LiOH. For LiOH from Chilean brine, the GWP is estimated to be 6.6 kg CO2 eq. per kg LiOH. For Australian spodumene converted in China the impact is 15.5 kg CO2 eq. per kg LiOH. LiOH produced from Nevada sedimentary clay resources has a GWP that is calculated to be 20.7 kg CO2 eq. per kg LiOH. The GWP calculated for the Cinovec Decarbonised case which would involve a number of significant modifications to the project as considered in the 2019 PFS could be one of the lowest in the world, estimated to be around 2.9 kg CO2 eq. per kg LiOH

For all five production routes shown in Figure 1 the chemical processing is the largest driver of the impact. Transport is minimal for all routes except for the Australian spodumene route, where the spodumene concentrate is transported to China; and the LiOH product from all production routes is transported 400 km from the Port of Rotterdam to provide the GWP impacts as delivered at the same end-users.

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23 November 2021

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Figure 1: GWP Impact of LiOH produced from Cinovec PFS (2019), the theoretical Cinovec Decarbonised Case, for Chilean

Brine, Australian Spodumene converted in China and US Sedimentary Clay. Source: Minviro

The Acidification Potential (AP) impact of the Cínovec product and the three comparison scenarios is shown in Figure 2. The AP impact for Chilean brine is the lowest: 0.03 mol H+ eq. per kg LiOH, followed by the AP impact of the Cínovec project which is calculated to be 0.05 mol H+ eq. per kg LiOH. The AP impact is much higher for the spodumene production route and the US sediment route: 0.47 and 0.36 mol H+ eq. per kg LiOH respectively. This is mainly due to the embodied AP impact of sodium hydroxide used in the process. The AP impact of the Cinovec Decarbonised scenario is not included, as for a number of decarbonised characterisation factors, no AP impact is currently available.

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23 November 2021

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Figure 2: AP Impact of LiOH produced from Cinovec PFS (2019) and for Chilean Brine, Australian Spodumene

converted in China and US Sedimentary Clay. Source: Minviro

The water use impact for the four scenarios is shown in Figure 3. The water use has been split into direct water use and the associated increase of the AWARE water scarcity factor. For all three comparison scenarios, a water scarcity factor is used according to the AWARE Methodology used by Minviro for comparing freshwater use at different locations. Since the Atacama is the driest place in the world, freshwater use is considered 100x more impactful to ecosystems than it is in places like the Czech Republic where there is plenty of water. Again, the Cínovec Decarbonised scenario is not included, as the impact on water use of the decarbonisation scenarios is not available.

Figure 3: Water Impact of LiOH produced from Cinovec PFS (2019) and for Chilean Brine, Australian Spodumene

converted in China and US Sedimentary Clay. Source: Minviro

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23 November 2021

Li2CO3 Production

As with LiOH, Li2CO3 products can have different environmental impacts depending on the natural resource they are produced from and the process technology chosen in flowsheets. A comparison of how the Cínovec carbonates product GWP impact will compare to existing process pathways is shown below in Figure 4.

The GWP calculated for the Chilean brine is the lowest: 2.7 kg CO2 eq. per kg Li2CO3. For the Cinovec PFS case, the Li2CO3 product has a GWP of 15.2 kg CO2 eq. per kg Li2CO3. Li2CO3 produced from Nevada sedimentary clay resources has a GWP that is calculated to be 18.1 kg CO2 eq. per kg Li2CO3. For Australian spodumene converted in China the impact is 24.2 kg CO2 eq. per kg Li2CO3. Li2CO3 produced from the Cinovec De-carbonised case has a GWP that is calculated to be 2.4 kg CO2 eq. per kg Li2CO3.

For all production routes shown, the chemical processing is again the largest driver of the impact. Transport impact is minimal for all routes except for the Australian spodumene route, where the spodumene concentrate is transported to China and the Li2CO3 product from all production routes is transported 400 km from the Port of Rotterdam to provide the GWP impacts as delivered at the same end-users.

Figure 4: GWP Impact of Li2CO3 produced from Cinovec PFS (2019), the theoretical Cinovec Decarbonised Case, for

Chilean Brine, Australian Spodumene converted in China and US Sedimentary Clay. Source: Minviro

The AP impact of the Cínovec product and the three comparison scenarios is shown in Figure 5. The AP impact for Chilean brine is the lowest: 0.03 mol H+ eq. per kg Li2CO3. The AP impact calculated for the Cínovec PFS case is 0.05 mol H+ eq. per kg Li2CO3. The AP impact for Li2CO3 produced from spodumene is again higher: 0.28 mol H+ eq. per kg Li2CO3. For US Sedimentary Clay, the AP impact is calculated to be 0.33 mol H+ eq. per kg Li2CO3.

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