Approval of up to EUR360M Czech Government Grant

Strong EU and National Support for the Cinovec Project

European Metals Holdings Limited (ASX and AIM: EMH, OTCQX: EMHXY/EMHLF) ("European Metals" or the "Company") is pleased to announce that, subject to completion of administrative processes, Geomet s.r.o. has been informed it has been awarded a grant of up to EUR 360 million (c.GBP 315 million) under the "Strategic Investments for a Climate-Neutral Economy" programme (the "Programme"), administered by the Ministry of Industry and Trade of the Czech Republic for the development of the Company's flagship Cinovec Lithium Project ("Cinovec" or "Project").

The Programme is designed to support significant investments in the production and expansion of equipment, key components, and critical raw materials essential for the transition to a climate-neutral economy. The Programme is aligned with the European Commission's Temporary Crisis and Transition Framework and aims to accelerate economic development and investment in strategic sectors.

The final amount of the monetary grant will be confirmed upon formal award and may be less than the maximum amount of EUR 360 million.

Executive Chairman, Keith Coughlan, said:

"This is a transformational milestone for European Metals and the Cinovec Project. The Czech Government's award of a grant of up to EUR 360 million represents one of the largest direct project-level funding commitments to a critical raw materials project within the European Union. Following the previously detailed formal recognition of the Project, the approval of such a significant financial contribution clearly demonstrates the support for and importance of Cinovec in the future of European electromobility.

Coming at a time of renewed positive outlook for lithium and strong geopolitical commitment to Critical Raw Material supply chain security, the grant confirms the significant support at both Czech Government and European Union levels."

Strong Support for Cinovec

The Cinovec Project has been formally recognised at both the European and national levels as essential to Europe's energy transition. It was:

• Declared a Strategic Project by the European Commission under the EU Critical Raw Materials Act, granting access to accelerated permitting, funding eligibility through institutions such as the European Investment Bank, and "one-stop-shop" regulatory processes.[1]
• Designated a Strategic Deposit by the Czech Government, simplifying and prioritising permitting under the Czech Construction Code.[2]
• Awarded a USD 36 million (CZK 800 million) grant from the EU Just Transition Fund, confirming the EU's direct financial commitment to progressing Cinovec.[3]

Collectively, these milestones demonstrate a unified European and Czech Government commitment to bringing Cinovec into production as a secure, sustainable source of lithium for the continent's battery and automotive sectors.

Formal Grant Information

• Summary of the Grant
• Status of Grant: awaiting completion of administrative processes to issue the formal grant-award decision.
• Maximum grant allocation: Up to EUR 360 million, reflecting the maximum aid intensity permitted under the Programme for qualifying regional investments
• Aid intensity: Up to 35% of eligible project costs for projects located in the Moravia-Silesia, Central Moravia, North-East, or North-West cohesion regions
• Form of support: Special-purpose subsidy paid in Czech koruna (CZK) to reimburse documented eligible capital expenditure ("capex") recorded during project execution
• Funding period: Annual drawdowns aligned with the Programme's project-status reporting cycle, with project completion required no later than 31 December 2032
• Decision authority: The Programme requires each project to be individually approved by the Government of the Czech Republic following assessment by the Ministry of Industry and Trade
• Background on the Programme

The Programme supports major investments relating to:

• Production of equipment essential for the transition to a climate-neutral economy, including batteries, solar panels, wind turbines, heat pumps, electrolysers, and carbon capture technologies;
• Production of key components used in such equipment; and
• Production or processing of critical raw materials identified in Regulation (EU) 2024/1252, including lithium.

The Programme's objective is to incentivise rapid and large-scale investments that enhance European energy security, supply-chain resilience, and industrial competitiveness.

Funding Mechanism and Drawdown Process

Once the formal grant decision is issued:

• Annual project-status reports must detail eligible costs, new jobs created, procurement activities, and production-capacity development.
• Grant payments are made within 60 days of validated submission and cannot exceed aid-intensity limits or annual caps.
• All supported assets must be maintained for five years post-completion, and newly created jobs must also be maintained for at least five years.

These requirements are standard under EU state-aid frameworks for large industrial investments.

• Next Steps
• Completion of administrative processes to issue the formal grant-award decision;
• Integration of the grant into Cinovec's project-finance structure;
• Ongoing coordination with the Ministry and CzechInvest on eligible-cost planning and reporting;
• Finalisation of construction-readiness activities once remaining approvals are completed.

The Company will provide further updates in accordance with ASX disclosure requirements.

This announcement has been approved for release by the Board.

Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O containing a combined 7.39 million tonnes Lithium Carbonate Equivalent (refer to the Company's ASX/ AIM release dated 13 October 2021) (Resource Upgrade at Cinovec Lithium Project).

An initial Probable Ore Reserve of 34.5Mt at 0.65% Li2O reported 4 July 2017 (Cinovec Maiden Ore Reserve - Further Information) has been declared to cover the first 20 years mining at an output of 22,500tpa of lithium carbonate (refer to the Company's ASX/ AIM release dated 11 July 2018) (Cinovec Production Modelled to Increase to 22,500tpa of Lithium Carbonate).

The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining operation.

On 19 January 2022, EMH provided an update to the 2019 Pre-Feasibility Study ("PFS") Update. It confirmed the deposit is amenable to bulk underground mining (refer to the Company's ASX/ AIM release dated 19 January 2022) (PFS Update delivers outstanding results). Metallurgical test-work has produced both battery-grade lithium hydroxide and battery-grade lithium carbonate at excellent recoveries. In February 2023 DRA Global Limited ("DRA") was appointed to complete the Definitive Feasibility Study ("DFS").

The Cinovec processing plant comprises of a Front-End Comminution and Beneficiation circuit ("FECAB") and Lithium Chemical Plant circuit ("LCP") in combination producing Lithium Hydroxide or Lithium Carbonate end products, and will be located on the Prunéřov 1 Power Station site located approximately 59 km by rail from the Cinovec mine site. (Refer to the Company's ASX/ AIM releases dated 26 April 2024 (New Lithium Plant Site Expected to Improve Project Permitting and Economics) and 27 November 2024 (Cinovec Project Update)).

The economic viability of Cinovec has been enhanced by the recent push for supply security of critical raw materials for battery production, including the strong increase in demand for lithium globally, and within Europe specifically, as demonstrated by the European Union's Critical Raw Materials Act ("CRMA").

BACKGROUND INFORMATION ON CEZ

Headquartered in the Czech Republic, CEZ a.s. is one of the largest companies in the Czech Republic and a leading energy group operating in Western and Central Europe. CEZ's core business is the generation, distribution, trade in, and sales of electricity and heat, trade in and sales of natural gas, and coal extraction. The foundation of power generation at CEZ Group is emission-free sources. The CEZ strategy named Clean Energy for Tomorrow is based on ambitious decarbonisation, development of renewable sources and nuclear energy. CEZ announced that it would move forward its climate neutrality commitment by ten years to 2040.

CEZ is also a market leader for E-mobility in the region and has installed and operates a network of EV charging stations throughout Czech Republic. The automotive industry in the Czech Republic is a significant contributor to GDP, and the number of EVs in the country is expected to grow significantly in the coming years.

Information in this release that relates to exploration results is based on, and fairly reflects, information and supporting documentation compiled by Dr Vojtech Sesulka. Dr Sesulka is a Certified Professional Geologist (certified by the European Federation of Geologists), a member of the Czech Association of Economic Geologist, and a Competent Person as defined in the JORC Code 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Sesulka has provided his prior written consent to the inclusion in this report of the matters based on his information in the form and context in which it appears. Dr Sesulka is an independent consultant with more than 10 years working for the EMH or Geomet companies. Dr Sesulka does not own any shares in the Company and is not a participant in any short- or long-term incentive plans of the Company.

Information in this release that relates to metallurgical test work and the process design criteria and flow sheets in relation to the LCP is based on, and fairly reflects, information and supporting documentation compiled by Mr Grant Harman (B.Sc Chem Eng, B.Com). Mr Harman is an independent consultant and the principal of Lithium Consultants Australasia Pty Ltd with in excess of 14 years of lithium chemicals experience. Mr Harman has provided his prior written consent to the inclusion in this report of the matters based on his information in the form and context that the information appears. Mr Harman is a participant in the long-term incentive plan of the Company.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

LITHIUM CLASSIFICATION AND CONVERSION FACTORS

Lithium resources and reserves are usually presented in tonnes of LCE or Li.

The standard conversion factors are set out in the table below:

Table: Conversion Factors for Lithium Compounds and Minerals

WEBSITE

A copy of this announcement is available from the Company's website at www.europeanmet.com/announcements/.