Amid a day of carnage on the ASX, the European Metals Holdings Ltd (ASX: EMH) share price is flying higher. Up by 20.35% at one point today, it has since retreated to $1.275 – still up an impressive 10.39%. For comparison, the S&P/ASX 200 Index (ASX: XJO) is currently down by 1.83%.
Today's gains come after the company announced it has the ability to produce battery-grade lithium carbonate.
Let's take a closer look at today's news from European Metals.
European Metals share price rides the lithium train
In a statement to the ASX, European Metals said, after successful locked-cycle tests (LCT), it is clear its Cinovec lithium project has the capacity to produce battery-grade lithium carbonate. Cinovec is located on the border between Germany and the Czech Republic.
According to the company, battery-grade lithium carbonate was produced in every LCT. In four LCTs, lithium recoveries of up to 92% were observed.
Lithium is surging on the commodities market as demand for electric vehicles explodes. It is an essential component in the manufacture of batteries for electric cars. Lithium is currently trading at around US$13,800 per tonne. According to the website Trading Economics, the metal's value has increased an incredible 91.4% since the beginning of this year.
The rising price of lithium, combined with today's announcement, seems to have investors pretty pumped over European Metals shares today.
Management commentary
European Metals executive chair Keith Coughlan said:
In a significant vote of confidence for our Pre-Feasibility Study, the proposed process methodology has been confirmed by excellent locked-cycle test results which also include new processes involving recycle streams.
The recovery of up to 92% of the lithium in the zinnwaldite concentrate at this early stage of DFS test work is very promising for increased recoveries during the planned process optimisation work. Further, an improved fluoride removal step, which is cheaper and cleaner, represents only the beginning of further optimisation work which we expect will result in greater lithium recoveries and even stronger economics for the Cinovec Project.
We look forward to providing further updates on the Definitive Feasibility Study work as it unfolds.
European Metals share price snapshot
Over the past 12 months, the European Metals share price has increased by almost 480%. However, since reaching an all-time high of $1.92 in March, the company's value has fallen by around 34%.
Given 175.1 million shares outstanding, European Metals has a market capitalisation of approximately $219 million.
