Exploration deals shut down for European Metals and Medusa Mining
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Lithium explorer European Metals called a halt to trading of its shares on Friday and announced Czech Republic authorities had cancelled a proposed deal to co-operate on a big lithium and tin project.
Meanwhile Medusa Mining told the market on the same day that a Cambodian gold and copper exploration deal would not proceed.
European shares tumbled 12 per cent to 41c by 12pm AEDT Monday — well down on their 52-week high of $1.39 last April. Medusa was down 3 per cent at 45.5c.
European Metals (ASX:EMH) said it received correspondence from Czech Republic trade minister Thomas Huner “purporting to terminate the Memorandum of Understanding dated 2 October 2017 between the company and the Ministry of Industry and Trade”.
The deal concerned a lithium and tin project called Cinovec, which European Metals believes is the biggest lithium resource in Europe “and one of the largest undeveloped tin resources in the world”.
The project lies 100km from Prague on the border with Germany in a prime position to access customers such as electric car and battery makers.
Cinovec lies in the Krusne Hore Mountains, a historic mining region where artisanal mining dates back to the 1300s.
A termination of the deal “would not in any way affect the exploration rights of the company”, the explorer told investors on Friday.
Plans for ongoing metallurgical test-work, sales discussions and preparations for feasibility drilling would continue.
European reported last quarter that six drilling tests holes “confirmed the expected lithium, tin and tungsten contents and mineralisation widths” while two holes exceeded expectations.
European said it “remains entirely focused on working with all stakeholders” including the Czech trade minister to successfully develop the Cinovec Project as a first-in-kind project that will pave the way for a successful lithium mining and processing industry in the Czech Republic.
“We look forward to meeting with the minister in the near term to further these discussions.”
Meanwhile Medusa Mining (ASX:MML) announced on Friday that a proposed deal with Cambodian company SEA Resources to explore the Prek Kampi region of Cambodia for gold and copper had expired.
Medusa and SEA had until March 1 to finalise the earn-in agreement — but the deal could not be done in time.
“Medusa remains committed to expanding its presence in South East Asia as part of its longer-term strategic diversification plan,” the company said.