Cadence Minerals (AIM:KDNC) said its investee company, European Metals, has entered a "Value Added Services Agreement" with KIC InnoEnergy, the principal facilitator of the European Battery Alliance, in respect of the Cinovec Lithium Project in the Czech Republic.
Cinovec, a joint venture between European Metals and Czech utility CEZ, recently received €29m in funding, enabling the project to progress through to the construction decision.
The purpose of the financing agreement is to support the construction financing and commercialisation of Cinovec which is the largest hard rock lithium deposit in Europe.
Under the agreement KIC InnoEnergy will provide assistance to EUZ to source construction finance, secure grant funding and assist in offtake introductions and negotiations.
Shares in Cadence Minerals have traded strongly since 1 June, increasing from 5.7p to opening up 16% at 10.75p following today’s announcement.
"European Metals and its development partner, CEZ, look forward to receiving support from EIT InnoEnergy and working together closely with their industrial and financial partners to deliver production at Cinovec, and contribute to a sustainable supply chain for a world leading centre for EV development and manufacture in Europe,” said EUZ’s MD, Keith Coughlan.
Last week the EU approved the Green Stimulus Plan, agreeing to invest more than 500 billion euros into a climate change plan including electric vehicles and renewable energy.
According to EUZ, Cinovec's economics, long mine life and proximity to key manufacturing centers in Europe leading the EV development, means the project is well positioned to work alongside EIT InnoEnergy and other European organisations to ensure ‘timely development to assist in meeting the expected significant increase in this demand.’
“Cinovec is the largest hard rock lithium resource in Europe and is strategically located to produce lithium in Europe for Europe,” said Coughlan.
He added, “The requirement for locally sourced raw materials for the e-mobility movement has become more apparent during COVID-19, and Cinovec is well positioned in close proximity to Europe's manufactures.”
Diego Pavia, CEO of EIT InnoEnergy, said the company views Cinovec as “critical” to the development of Europe's energy storage industry and in meeting the EU's climate goals of electrification of mobility and large-scale development of renewable energy storage.
Cadence holds around 16% of the equity in EUZ, which, through its wholly owned Subsidiary, Geomet, controls the exploration licences awarded by the Czech State over Cinovec.
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