Funding Crunch Looms: Can European Metals Meet Cinovec DFS Cash Call Without Dilution?

Funding Secured for Critical DFS Milestone

European Metals Holdings Limited (ASX, EMH) has taken a decisive step forward in advancing its flagship Cinovec Lithium Project by securing a funding pathway to complete the Definitive Feasibility Study (DFS). The project company, Geomet a.s., issued an €11 million cash call to finance the DFS completion, with EMH’s share amounting to €5.39 million (approximately A$9.67 million), payable by 10 October 2025.

To meet this obligation, EMH has successfully completed a A$3 million placement to institutional and high-net-worth investors, managed by Barclay Wells and Zeus Capital. The proceeds will be applied toward EMH’s cash call payment and general working capital, reflecting the company’s proactive approach to maintaining momentum on the project.

Non-Dilutive Financing Strategy to Protect Shareholders

In a strategic move to minimise shareholder dilution, EMH is pursuing a non-dilutive funding solution for the remaining balance of the cash call. This involves refinancing a CZK 121 million (approximately A$8.86 million) loan originally advanced for the acquisition of Dukla land, which was initially intended as the site for the Lithium Chemical Plant. With plans now shifting the plant location to Prunéřov, much of the Dukla land is surplus to requirements, opening opportunities for refinancing or sale.

Negotiations are reportedly advanced, and the company expects to complete these arrangements in time to meet its October cash call deadline. This approach underscores EMH’s commitment to preserving shareholder value while ensuring the project’s critical path remains intact.

Technical Progress and Project Significance

The DFS itself is progressing well, supported by additional metallurgical test work that suggests potential reductions in reagent consumption and waste generation, key factors that could improve project economics and environmental footprint. The DFS remains on track for completion in October 2025, a milestone that will provide a comprehensive assessment of the project’s viability and pave the way for development decisions.

Located in the Czech Republic, the Cinovec Lithium Project is Europe’s largest hard rock lithium deposit and ranks among the world’s top non-brine lithium resources. It has been designated a Strategic Project under the European Union’s Critical Raw Materials Act and recognized as a Strategic Deposit by the Czech Government, highlighting its importance in the continent’s battery materials supply chain.

Looking Ahead

Executive Chairman Keith Coughlan emphasised the significance of the cash call and the company’s funding strategy, noting that the combination of the placement and refinancing efforts will keep the DFS on schedule and help close the valuation gap between EMH’s market capitalisation and the project’s underlying fundamentals. As the company advances toward DFS completion, investors will be watching closely for further technical updates and the final feasibility outcomes.