Tunnel Kiln Testwork Shows Potential Capex Saving

European Metals Holdings Limited (ASX & AIM: EMH) ("European Metals" or the "Company") is pleased to announce preliminary results for testwork and design of a tunnel kiln for the Cinovec Project ("Project").

• Potential for change from two gas fired rotary kilns to a single gas / electric tunnel kiln for the Cinovec Project
• Gas-fired tunnel kiln estimated to materially reduce capex by approximately US$112m and opex by US$10m per annum (compared to the Definitive Feasibility Study ("DFS") Rotary Kilns[1]). The Company notes the effect that this reduction in capex and opex will have on the Project DFS will not be known until the Project DFS is updated
• Tunnel kiln provides flexibility to remove the Project's dependence on gas and enables the project to be run solely on green power supplied by project partner CEZ[2]
• Switch to Tunnel Kiln not expected to impact Project timeline
• The combination of both the tunnel kiln and the optimisation of the Lithium Chemical Plant ("LCP") Flowsheet[3], if adopted, are anticipated to reduce capex by approximately US$112m and reduce opex by US$64m ($10m Tunnel Kiln and $54m LCP flowsheet optimisation) per annum. The Company notes the effect that this reduction in capex and opex will have on the Project DFS will not be known until the Project DFS is updated

Keith Coughlan, Executive Chairman, commented: "The use of a tunnel kiln is a potentially important change from the DFS of the Cinovec Project. If adopted this change could result in a significant reduction in the capex as a result of the use of off-the-shelf components, modular construction as well as considerable opex reductions relating to the reduction in the roasting temperature of the Zinnwaldite concentrate and the option to use electricity instead of gas to fire the kilns. The use of green electricity to fire the kiln could also drastically reduce the carbon footprint of the Project enabling Cinovec to be a leading low carbon producer of Lithium Carbonate.

We look forward to the upcoming decision by Geomet in relation to the use of the tunnel kiln and the recent optimisation of the LCP flow sheet. These significant changes have the potential to materially increase the NPV8 of the Project.

These revisions further confirm the strategic importance of the Cinovec Project in supporting Europe's lithium supply security and the growth of the region's EV and PHEV sectors."

Pyrometallurgy in DFS Processing Plant

The Cinovec Project DFS released in December 2025 (refer to the Company's ASX / AIM release dated 23 December 2025) (Successful Completion - Cinovec Definitive Feasibility Study) includes a pyrometallurgy stage in the LCP which is configured with two rotary kilns heating the zinnwaldite concentrate and roasting reagents to 950°C for 1 hour, followed by leaching in water at 60°C.

Extensive testwork has shown the DFS pyrometallurgy produces a 93.2% lithium extraction from zinnwaldite concentrate into the pregnant leach solution, for onwards processing in the LCP.

Potential change from Rotary Kilns to Tunnel Kiln

The Company is considering replacing the two rotary kilns in the DFS plant configuration with a single tunnel kiln.

As of the date of this announcement, a final decision on the use of a tunnel kiln has not been made although a decision in relation to this is expected by Q4 2026. Upon a final decision to change to a tunnel kiln configuration, Geomet will proceed to update the DFS. The use of a tunnel kiln is not expected to impact the Project timeline because design and construction of a tunnel kiln is generally simpler and modularised with short sections manufactured off-site.

Tunnel kilns are the standard kiln technology used in the ceramic and brick industries worldwide with near universal use for continuous applications. Tunnel kilns are very simple to operate with a high availability. They are constructed at ground level (do not require elevation or on an exact gradient) and are generally not a long lead item, resulting in reduced installed capital cost relative to rotary kilns. Tunnel kilns have minimal heat losses, resulting in significantly lower heat requirements relative to rotary kilns.

The expected benefits of the tunnel kiln include:

• The ability to heat the kiln with gas or electricity;
• The ability to heat the kiln electrically reduces natural gas consumption and CO2 emissions;
• Temperature control (±10˚C) is excellent everywhere in the kiln resulting in a lower kiln operating temperature, reduced heat consumption and no product vitrification;
• Heat losses through exhaust gasses are minimised;
• Dust is not generated in the kiln and off-gasses are reduced, significantly reducing the kiln flue gas treatment requirements;
• Heat recovery from hot solids is used to dry, pre-heat and calcine reagents, minimising the energy requirements to evaporate moisture from the roast mix in the kiln;
• Simplified construction techniques (modular build and assembled on site) reducing the construction timeline and reducing capital requirements; and
• A reduced pyrometallurgy footprint on the Prunéřov site.

The result of the benefits of using the tunnel kiln is expected to materially reduce the capex and opex of the Cinovec Project processing plant.

A typical rotary kiln operates with a gas temperature over 100˚C higher than the solids and has a potential solids temperature overshoot of 30-50°C, inherent in the design of a kiln with a large single burner. The Cinovec rotary kiln temperature in the DFS processing plant is 950°C, with the target solids temperature reaching 925°C and held for one hour to effect the optimal lithium roast/leach yield. Due to the potential for solids temperature over-shoot in a rotary kiln, there are risks of vitrification of roast feed, causing a reduction in lithium recovery with some lithium being locked up in the resulting glass discharged from the kiln and the requirement for a mill after roasting. Vitrification can also result in a vitrified ring formation in the kiln, hindering solids movement through the kiln and requiring shutdowns to remove the build-up and allow replacement of damaged refractory lining - rotary kiln availability is set at 85% to allow for such shutdowns.

A tunnel kiln is expected to operate with a maximum solids temperature at 850°C and the gas temperature 870 to 880°C. This excellent temperature control is achieved with multiple electrical heating elements and/or gas burners evenly distributed along the length of the kiln and hot air recirculation fans. Temperature control is to within ±10°C. This accuracy is critical to the firing of ceramics and ideal for the control of temperature in the process of extraction of lithium from zinnwaldite. As a result of this temperature control, vitrification can be avoided. Sintering of particles may occur and require low energy milling to produce an optimal particle size to accelerate leaching but is not required to liberate the lithium sulphate.

Recent testwork has confirmed the tunnel kiln target solids temperature of 850°C needs to be maintained for 30 minutes to achieve the same or slightly better lithium roast/leach extraction in rotary kilns designed to achieve a roast solids temperature of 925°C for one hour.

Tunnel kiln work performed to date

Geomet has been investigating the use of a tunnel kiln as part of the Cinovec Project since 2022, when a basic scoping-level engineering study was undertaken to assess the viability of a tunnel kiln in the Cinovec Project. The design and testwork management have been undertaken by and with Dr. Jeff Claflin. Dr. Claflin previously successfully undertook design and testing for tunnel kilns at the Sonora Project for Bacanora Lithium PLC. The work resulted in tunnel kilns being included in the Sonora DFS, before Bacanora Lithium PLC was acquired by Ganfeng International Trading (Shanghai) Limited in 2021.

The first phase of tunnel kiln testwork with Cinovec zinnwaldite concentrate took place in 2024. This testwork was designed to confirm there are no fatal flaws in the proposed usage of tunnel kiln technology for the Cinovec Project and established:

• 93.2% lithium recovery in the leach at 850°C for 1 hour (matching the lithium recovery with 950°C for 1 hour in the rotary kiln);
• A single tunnel kiln is feasible for the Cinovec Project;
• If electrical heat is used and powered by renewable energy, then CO2 emissions would reduce by 50 million Nm3 (approximately 98,000 tonnes) per year; and
• Preliminary estimates of capex and opex savings were made.

The second phase of testwork, to establish engineering design criteria for a tunnel kiln specific to the Cinovec Project and the Prunéřov plant site, has been underway since 3Q 2025. This testwork included pilot-scale briquetting testwork and pilot-scale kiln testwork to demonstrate briquette-ability, industrial scale fluid mechanics and heat transfer. This testwork is now complete.

The second phase of testwork culminated in DFS-level budget quotes from equipment manufacturers and has included:

• Pilot-scale briquetting of 1,500 kg of roast charge with commercially available equipment, including testing green (unroasted) competency of the resulting briquettes for pre-roast handling purposes;
• Extensive bench-scale and pilot-scale roasting to confirm process design criteria such as target solids roast temperature, residence time at target temperature, lithium recoveries and competency of the roasted briquettes for onwards handling including crushing and leaching;
• Roasting reagent optimisation, reducing reagent quantities required;
• Pre-calcination / drying and residual moisture requirements for zinnwaldite concentrate and the roasting reagents; and
• Estimates of capex and opex savings were made comparing gas-fired rotary kilns with a gas-fired tunnel kiln:

o capex estimated to be reduced by approximately US$112m;

o opex estimated to be reduced by US$10m per annum; and

o capex and opex changes to be assessed in rigorous DFS update process.

The Company notes that the effect that this reduction in capex and opex will have on the Project DFS will not be known until the Project DFS is updated.

The second phase of testwork has confirmed or re-confirmed:

• 93.4% roast/leach lithium recovery;
• Target roast temperature of 850°C;
• There is no statistical difference in lithium recovery between a 30-minute and a 60-minute roast residence time at 850°C. Accordingly, Geomet expects residence time may be reduced below 60 minutes;
• Viability of recycling mixed-salt by-product from the downstream lithium phosphate reactor to the kiln charge, boosting lithium recovery and reducing the mass of by-product salt from the process; and
• A significant reduction in energy requirements in the pyrometallurgical area of the Cinovec Plant. The quantum of reduction is to be confirmed in an updated Cinovec DFS in due course.

During the DFS processing plant site design work, confirmation was made that the tunnel kiln footprint (including roast charge mixing / briquetting, pre-heating, cooling and kiln dust and off-gas handling) all fitted inside the footprint of the equivalent rotary kiln process train. Accordingly, a decision to change to the tunnel kiln will not cause extensive Prunéřov site redesign, outside the pyrometallurgy area.

Upon a decision to change to a tunnel kiln configuration, Geomet will proceed to update the DFS.

This announcement has been approved for release by the Board.

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 54.4Mt at 0.58% Li2O , Indicated Mineral Resource of 378.23Mt at 0.41% Li2O and an Inferred Mineral Resource of 309.49Mt at 0.39% Li2O containing a combined 747 million tonnes Lithium Carbonate Equivalent (refer to the Company's ASX/ AIM release dated 23 December 2025) (Cinovec DFS Confirms Long-life Battery Grade Lithium Carbonate Producer Strategically Positioned to supply European EV and Energy-storage Sectors)[4].

A Proven and Probable Ore Reserve of 54.4Mt at 0.58% Li2O has been declared to cover the first 26 years mining at an output of 37,500tpa of lithium carbonate (refer to the Company's ASX/ AIM release dated 23 December 2025) (Cinovec DFS Confirms Long-life Battery Grade Lithium Carbonate Producer Strategically Positioned to supply European EV and Energy-storage Sectors)[5].

The Definitive Feasibility Study ("DFS") confirmed the economic viability of the Cinovec Project with steady-state production of 37,500 tpa of battery-grade lithium carbonate ("Li₂CO₃"), representing ~5.2% of EU demand in 2030 and sufficient for >900,000 50kWh EV batteries annually. Cinovec will have a 28+ year operating life, underpinned by a 748Mt Resource @ 0.19% Li₂O and a 55.4Mt Ore Reserve, with expansion optionality (refer to the Company's ASX/ AIM release dated 23 December 2025) (Cinovec DFS Confirms Long-life Battery Grade Lithium Carbonate Producer Strategically Positioned to supply European EV and Energy-storage Sectors)[6].

Cinovec has received recent impetus from the EU and the Czech Government in the form of grants of USD36 million from the EU Just Transition fund (refer to the Company's ASX/ AIM release dated 28 April 2025) (USD 36 million Just Transition Fund Grant Approved for Cinovec Project) and up to EUR360 million by the Czech Government (refer to the Company's ASX/ AIM release dated 7 March 2025) (Approval of up to €360 Million Czech Government Grant).

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

BACKGROUND INFORMATION ON CEZ

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 Geologists, 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 Dr. Stephen La Brooy. Dr. La Brooy, who holds a PhD in Chemical Metallurgy, 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. Dr La Brooy does not own any shares in the Company and is not a participant in any short- or long-term incentive plans of the Company.

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

[1] The Company confirms that the material assumptions underpinning the DFS Rotary Kiln pricing continue to apply and have not materially changed

[2] See ASX announcement dated 23 November 2021

[3] See ASX announcement dated 24 June 2026

[4] The Company confirms that the material assumptions underpinning the Resource estimates continue to apply and have not materially changed.

[5] The Company confirms that the material assumptions underpinning the Reserve estimates continue to apply and have not materially changed.

[6] The Company confirms that the material assumptions underpinning the Reserve and Resource estimates continue to apply and have not materially changed.