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I am pleased to provide the Q2 report for 2021. As societies and businesses are recovering, we can see huge investments going into a sustainable re-opening of the economy. It is encouraging to see that the community is committed to working for a better future. A crucial part of achieving this transition is the electrification of the vehicle and transport industry and society at large. For this, we need batteries and battery minerals and metals. The latter is our contribution to the sustainable transition of society. As you are aware, our focus is to mine these critical components in Europe with a complete focus on ethics and traceability throughout the entire supply chain.
In this quarter, my team and I have continued our work with our projects in Finland, Spain, and Sweden. At the same time, we have continued our work to influence decisionmakers and policymakers in the EU to enable Europe to cater to its own needs for battery minerals. By doing this, we will be less dependent on supply from countries with poor labour conditions, unsustainable mining methods, and lack of traceability. In Europe, we have all the minerals we need to achieve the superpower position the region aims for in battery production. However, we still need to better align our policies in this field and make the permit process smother.
Let me also briefly comment on the recycling of batteries and battery minerals that has been very much in focus. First of all, we salute all initiatives when it comes to the recycling of battery minerals. For example, our Finnish project has recently joined a government-funded project to leverage materials from tailings to obtain battery minerals. However, let me be very clear, recycling will only play a minor role initially as the demand for battery minerals needed by the electric revolution widely exceeds the current supply.
During this quarter, I would specifically like to put your focus on the recent mineral resource report we released about our Finnish Hautalampi project. We have known for some time that the mineral potential in the area is good, and following a new analysis conducted by consultancy AFRY the mineral resource potential has doubled. We are now planning to conduct further drilling to get even more details on the economic potential. However, we can already say that the Hautalampi resource area has a great potential to become a key contributor of battery minerals to the electric revolution. Close to Hautalampi we have also started field activities this summer to assess the potential of the Hietajärvi resource area. We have good reasons to believe that the exploration area has some outstanding mineral potential.
Moving your attention from Finland to our Spanish Corcel project, I am pleased to be starting a new drilling campaign in the potential mineral area near Galicia. Later this year, we will receive a JORC-compliant mineral resource estimate that will enable us to assess the opportunities for an open pit mine in the region.
Finally, I would like to extend my thanks for your support. As a shareholder in Eurobattery Minerals you are actively taking part in the transition to a green society.
We are now well into 2021 and progressing with our battery minerals projects in Finland, Spain and Sweden. At the same time, we are constantly evaluating new opportunities to achieve our business goal of providing sustainable battery minerals and metals for the electric revolution.
During the first few months of this year, I have maintained a strong focus on increasing our footprints in the automotive industry and building a solid foundation for the company’s long-term financing.
At the beginning of Q1, we made the strategic move of entering the German market via a parallel listing at the Börse Stuttgart in Germany. I cannot underestimate the importance of the company having a presence in the biggest market in the automotive industry in Europe and globally. Following the entry, I have been working hard on educating the industry about building future electric vehicles from sustainably produced raw materials from Europe, rather than depending on ‘dirty’ minerals from outside our region.
The entry into the German market is also significant from another perspective. We are now present in the biggest financial market in the EU post Brexit. The parallel listing gives easy access to Eurobattery Minerals for potential shareholders from Europe who are interested in investing. And we have seen substantial interest right from the start from both private investors as well as major German institutions. Combined with our current significant investors and our considerable number of shareholders in Sweden and elsewhere, the move to Germany will further strengthen our financial position and increase our already robust owner structure.
Q1 also gave us the final results from last summer’s drilling campaign at our Hautalampi project in eastern Finland. And we are thrilled to have confirmation that there is a significant resource expansion in this nickel, copper and cobalt project. The next step – and a significant prerequisite in developing a battery mineral mine – is to conduct a resource estimate, and work is underway with results due after the summer.
We have also received some interesting initial findings from our research collaboration with AGH University of Science and Technology in Krakow that could make an important contribution to the future of more sustainable mining. In this project, we are looking at ways to develop an optimal technology for extracting vanadium and rare earth elements (REE) from minerals in black shales, such as in our project in Fetsjön in Sweden. Initial results suggest that the vanadium can be obtained more sustainably and cost-effectively than what was previously believed, and the researchers are now conducting further tests.
We are committed to being the sustainable foundation of the battery value chain, and taking part in research collaborations is one crucial way of achieving this goal. After all, the one thing we know for certain is that the number of electric vehicles on our roads will increase substantially, which means there is a constant and growing need for battery minerals. If you would like to know the exact figures, please refer to the report we commissioned from research company Aperio during Q1. It will give you a good overview of supply and demand and provide details about market potential in the regions in which Eurobattery Minerals operates.
Eurobattery Minerals is committed to providing the battery minerals needed for society’s electric transition at large, and specifically for the electric vehicle industry. With nickel, copper, cobalt and vanadium projects in Finland, Spain and Sweden, Eurobattery Minerals has made significant advancements during 2020, which is why I am pleased to present this annual report.
Like everyone, we have lived with the Covid pandemic since March 2020 and we are closely monitoring the developments. From a consumer demand perspective, the pandemic has not been seen to slow down the electric revolution. During the year, consumer demand for EV-cars and the constant increase of battery production capacity, combined with a clear political push from the EU to increase its self-sufficiency in these critical raw materials, has further strengthened our business’s basis as a European and sustainable foundation for the battery and EV-value chain. With the considerable investment going into the restart of the European economy post-pandemic, I am pleased to see that electrification and battery development are seen as cornerstones to this recovery and, as a consequence, will be vital to achieving the region’s ambitious climate targets.
Let me summarise the year, starting with our projects in Finland, Spain, and Sweden. In May 2020, we expanded our footprint as we concluded an investment and shareholders agreement with the Hautalampi project in eastern Finland. The deal gives us the option for a staged acquisition of 100 per cent of the shares in the Vulcan Hautalampi Oy and its nickel, copper and cobalt project. Via drilling campaigns conducted in 2020, it is confirmed that Hautalampi has a significant potential for resource expansion. In combination with the submission of the environmental impact assessment procedure and the development grant the project was awarded in 2020, I am looking forward to seeing this important project’s progression.
Close to Hautalampi, Vulcan Hautalampi Oy has also been granted a preliminary exploration permit for the Hietajärvi Project. The project covers over 289 km2 of ground highly prospective for cobalt, copper, nickel and zinc deposits.
In our Corcel project in Spain, we have three primary prospect zones that include Castriz, Monte Mayor and Monte Castell. Our exploration efforts have so far focused on the Castriz prospect. During 2020, we conducted extensive mineral tests and analysis of the nickel, copper and cobalt drill core samples. The results of the analysis confirm high-value nickel sulphide minerals as the dominating asset in the Castriz deposit. Sulphide minerals are the preferred raw materials for the EV battery manufacturing industry, making Corcel a potentially vital source of battery minerals. We are working on identifying ways to maximise our discovery’s value by identifying potential massive sulphide zones and assessing the optimal mineral processing option.
In Sweden, we have seven exploration permits in the north of the country, focusing on critical battery minerals such as nickel-copper-cobalt and rare earth elements as well as vanadium. During the year, we conducted desktop studies to assess the broader potential of these projects. Our main attention has been on our Fetsjön project in Västerbotten. We collaborate with Uppsala University and the AGH University of Science & Technology in Krakow on sustainable mining methods. Sustainable sourcing with a focus on ethics and traceability is the core business of our company. Together, we have joined forces with other stakeholders in the EV and mining industry and work with third-party verification and certification. We believe that the electric revolution should be built on sustainable raw material.
Looking at the financial situation, I am pleased to have raised an additional SEK 90 million in 2020 from existing and new shareholders via a rights issue and a warrant trade. In all, we are well-financed for our future work, and I am grateful for your support.
As this report is published late in the spring, we are already a long way into 2021, and the expansion into Germany and the dual listing has further elevated our business strategy. In conclusion, we are well-positioned to provide Europe with sustainable battery minerals for the electric revolution.
Dear Shareholder,
Q4 rounds of a very active year for Eurobattery Minerals and I am proud of the progress the company made in 2020 in delivering on our vision of being the foundation of the battery and electric vehicle value chain by producing ethical and fully traceable battery minerals in Europe. I am also proud of the level of interest in our company from the investor community, evidence of which came in the exercise of warrants subscribed to 96 per cent that raised an additional SEK 22 million for the company during the quarter. In addition to these funds, our Hautalampi nickel-copper-cobalt project in Eastern Finland was awarded a EUR 630,000 (SEK 6.4 million) development grant by the South Savolax Centre for Economic Development, Transport and the Environment granted by the European Regional Development Fund (ERDF) programme.
The green transition is clearly happening right now across several sectors. For example, electrification and battery development are key elements as Europe restarts its economy, and a vital component of the Green Deal. Individual member states support this development and are now launching their sustainable battery strategies. For example, our domestic market, Sweden, has developed an ambitious and sustainable growth strategy in this field. This development is important for Eurobattery Minerals, as sourcing raw materials is crucial to our success.
Sustainable sourcing with a focus on ethics and traceability is the core business of our company. As already communicated in the previous quarterly report, joining the independent Initiative for Responsible Mining Assurance (IRMA) is a strategic move for Eurobattery Minerals. Together we will join forces with other stakeholders in the EV and mining industry and work with third-party verification and certification against a comprehensive best-practice standard that addresses the range of environmental and social issues related to industrial-scale mines.
On the same subject I am delighted that we have extended our partnerships with scientists from Uppsala University and AGH University of Science & Technology in Krakow on new, sustainable methods of extracting vanadium and rare earth elements (REE) from the black shale in our Fetsjön project in Sweden. Projects include a joint research application to the Swedish innovation Agency, Vinnova, and an experimental project on new technologies to obtain vanadium and REE. The latter project has already announced progress recently with a new thermal and sustainable method that allows cost-effective enrichment of vanadium and REE at relatively low temperatures.
During Q4 and Q1 2021, we attained the final results from our drilling campaign in our Hautalampi project. The assays confirmed a significant resource expansion potential from 800 metres to 1,400 metres along a strike to the northeast of the historical mineral resource and continuity of the westernmost mineralised horizon in a southwesterly direction towards the historic Hautalampi mineral resource. Combined with the EIA-programme submission to the North Karelia Centre for Economic Development, Transport and the Environment, we are now ready for the next stage in Hautalampi.
Besides the Hautalampi project, we are also thrilled about the new reservation permit granted for exploration over the highly prospective Hietajärvi Project, in close proximity to Hautalampi. The project covers over 289km2 of ground highly prospective for cobalt, copper, nickel and zinc deposits.
We also made progress in the fourth quarter in our Castriz project area in Spain, where previous tests have confirmed that the majority of nickel and copper is contained within sulphide minerals, the preferred raw materials for the EV battery manufacturing industry.
Finally, at the beginning of 2021, we made a strategic move by expanding to the German market via a dual listing and announcing the opening of a new office in Q1 2021. Our presence in the most important automotive market in Europe, enabling easy access for the significant German investor community to invest in Eurobattery Minerals, is a key driver behind our expansion, and essential for us to continue delivering on our business strategy. However, Eurobattery Minerals will remain a Swedish public limited company (AB) headquartered in Stockholm.
In conclusion, we are very well-positioned from a market, financial and project perspective, and I am excited about continuing our expansion and progress in 2021.
Yours Faithfully
Roberto García Martínez
CEO
During the third quarter, we have developed our operations further across our projects in Finland, Spain and Sweden, and overall as a company via a successful rights issue subscribed to 209 percent. In combination with the warrant trade finalised in late October, we have raised an additional SEK 70 million for the Company, enabling us to advance our operations. Thank you for your support.
Initially, I’d like to highlight some significant developments that occurred during the quarter, all of which are examples of the broader electrification in society, but that are also significant developments for our business as an European provider of critical battery minerals.
For example, a new supply model has emerged, with automakers signing deals directly with mining companies and specific mines to secure their supply of traceable battery minerals. In fact, traceable and sustainable battery minerals are even being used as key consumer messages when selling new cars. Meanwhile, the EU has increased its focus on critical raw materials by highlighting how crucial these raw materials are for Europe’s business development and for the region to achieve its climate neutrality targets. In response to this, the EU founded the European Raw Material Alliance, an organisation Eurobattery Minerals is proud to support as a founding member.
When it comes to our exploration operations, I would first like to highlight the Hautalampi project in eastern Finland, a project we have the option to acquire. The current owner, Vulcan Hautalampi Oy, initiated a drilling campaign in July to verify the mineral potential. With results from the drilling campaign already in hand, we can now confirm a resource expansion potential of between 800 and 1,400 metres along strike from historical mineral resource estimates with consistent nickel, cobalt and copper mineralisation. Specifically, I am pleased with the high-grade intersection of 1.59% cobalt and 1.40% nickel, which indicates potential for high margin mining. During the quarter, the Hautalampi project also initiated the environmental impact assessment procedure to allow onsite mining and processing.
When it comes to our Castriz project area in Spain, Q3 brought increased focus on the mineral potential and mining opportunities for nickel, cobalt and copper in the Corcel project. The results from the mineral identification and characterisation studies, conducted by SGS (Lakefield) in Canada, have confirmed that the majority of nickel and copper is contained within sulphide minerals. Sulphide minerals are the preferred raw materials for the EV battery manufacturing industry, making Corcel potentially an important source of battery minerals.
During the quarter we have also continued our collaboration on sustainable mining for rare earth elements and vanadium with Uppsala University and AGH University of Science & Technology in Krakow. This collaboration includes our exploration project in Fetsjön in northern Sweden. The cooperation with the universities is one crucial part of our sustainable mining operations, as we are committed to cooperating on, and leading the development of sustainable mining. Furthermore, we recently joined the initiative for responsible mining assurance (IRMA). Sustainable mining is at the core of the Company’s business strategy, so we look forward to collaborating with IRMA in the future.
Finally, I would like to remind you of our business model, which involves several projects at different stages progressing in parallel. In addition, we are continually evaluating new opportunities to broaden the Company’s exposure to the battery minerals industry. One example of this is the new reserved exploration permit for the Hitajärvi project, located just 30 kilometres away from the Hautalampi project in eastern Finland, where historic cobalt and copper resources have been identified.
To summaries, there are exciting developments ahead for the Company. I would like to thank you for supporting our continued efforts to be the foundation of the European battery value chain.
Yours faithfully,
Roberto García Martínez