European Metals Holdings Limited (LON:EMH) has conditionally agreed to sell a majority stake in the Cinovec lithium project in the Czech Republic for €34mln.
Local power utility CEZ has offered to buy a 51% stake in Geomet, the subsidiary that owns the project, and to become its strategic partner.
Keith Coughlan, EMH’s managing director, said if the deal is concluded the money would fund Cinovec through to a construction decision.
READ: Potential Investment from CEZ Group could fund Cinovec through to a decision to mine. But is it a good deal?
CEZ intends to develop several projects in areas of energy storage and battery manufacturing in the Czech Republic and in Central Europe and is an ideal partner for Cinovec, said Coughlan.
The state-owned Czech firm has been carrying out due diligence on Cinovec since July and EMH has granted a period of exclusivity until the end of March next year for it to formalise its proposals.
European Metals will use the funds received from CEZ to complete the Definitive Feasibility Study at Cinovec, all of the permitting processes and advance the project to an investment decision.