European Metals : Interim Financial Report 31 December 2020

EUROPEAN METALS HOLDINGS LIMITED

ARBN 154 618 989

INTERIM FINANCIAL REPORT

31 DECEMBER 2020

Note: The information contained in this condensed report is to be read in conjunction with European Metals Holding Limited's 2020 annual report and any announcements made by the company during the half-year period ended 31 December 2020

European Metals Holdings Limited

ARBN 154 618 989

INTERIM FINANCIAL REPORT 31 DECEMBER 2020

Directors

Mr Keith Coughlan Mr Richard Pavlik Mr Kiran Morzaria

Mr Lincoln Palmer Bloomfield, Jr

Company Secretary Mr Dennis Wilkins

Registered Office in Australia Suite 2

11 Ventnor Avenue WEST PERTH WA 6005 Telephone: [phone] Facsimile: [phone] Email:www.europeanmet.com

Registered Address & Place of Incorporation Rawlinson & Hunter

Woodbourne Hall PO Box 3162 Road Town TORTOLA VG1 110 BRITISH VIRGIN ISLANDS

Share Register

Computershare Investor Services Limited Level 11

172 St Georges Terrace PERTH WA 6000 Telephone: [phone] Facsimile: [phone]

Auditor

CORPORATE DIRECTORY

Stantons International Audit & Consulting Pty Ltd Level 2, 1 Walker Avenue

WEST PERTH WA 6005 Telephone: [phone] Facsimile: [phone]

Securities Exchange Listing - Australia Australian Securities Exchange Limited Level 40, Central Park

152-158 St Georges Terrace PERTH WA 6000

ASX Code: EMH

Securities Exchange Listing - NASDAQ Nasdaq Inc

151 W. 42nd Street New York City

NY 10036 United States

NASDAQ Code: ERPNFExecutive Chairman Executive Director Non-Executive Director Non-Executive Director

Registered Office in Czech Republic GEOMET s.r.o.

Ruska 287 417 01 Dubi Bystrice The Czech Republic Telephone: [phone]

Nominated Adviser & Joint Broker WH Ireland Ltd

24 Martin Lane LONDON EC4R 0DR UNITED KINGDOM

Joint Broker

Shard Capital Partners LLP 23rd Floor, 20 Fenchurch Street LONDON EC3M 3BY

UNITED KINGDOM

UK Depository

Computershare Investor Services plc The Pavilions

Bridgewater Road BRISTOL BS99 6ZZ UNITED KINGDOM

Reporting Accountants (UK)

Chapman Davis LLP

2 Chapel Court LONDON SE1 1HH UNITED KINGDOM

Securities Exchange Listing - United Kingdom London Stock Exchange plc

10 Paternoster Square LONDON EC4M 7LS UNITED KINGDOMAIM Code: EMH

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European Metals Holdings Limited

ARBN 154 618 989

INTERIM FINANCIAL REPORT 31 DECEMBER 2020

CONTENTS

Directors' Report 3

Auditor's Independence Declaration 6

Consolidated Statement of Profit or Loss and Other Comprehensive Income 7

Consolidated Statement of Financial Position 8

Consolidated Statement of Changes in Equity 9

Consolidated Statement of Cash Flows 10

Condensed Notes to the Consolidated Financial Statements 11

Directors' Declaration 19

Independent Audit Review Report to the members of European Metals Holdings Limited 20

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European Metals Holdings Limited

ARBN 154 618 989

INTERIM FINANCIAL REPORT 31 DECEMBER 2020

DIRECTORS' REPORT

Your Directors submit the financial report of the consolidated group for the half year ended 31 December 2020.

Directors

The names of the directors who held office during or since the end of the half-year.

Mr Keith Coughlan	Executive Chairman	Appointed 30 June 2020
Appointed Director 6 September 2013
Mr Richard Pavlik	Executive Director	Appointed 27 June 2017
Mr Kiran Morzaria	Non-Executive Director	Appointed 10 December 2015
Mr Lincoln Palmer Bloomfield, Jr	Non-Executive Director	Appointed 4 January 2021
Results of Operations

The consolidated loss for the half year ended 31 December 2020 amounted to $2,317,327 (2019: $1,591,389 loss).

Review of Operations

For the reporting period the Company continued to manage the advancement of the Cinovec Lithium/Tin Project in Czech Republic. The macro conditions relative to the Project have been very strong for the period. Global lithium prices steadily increased, with more dramatic increases seen immediately post the period. In addition to the global conditions, support within the European Union (the Company's region of operations) for battery metals project development has increased substantially.

Some significant highlights of the project development and EMH level initiatives for the period are as follows.

• • Partnership with European Union body

The Company announced a support and financing agreement with KIC InnoEnergy SE ("EIT InnoEnergy") on 28 July 2020. The body is the principal facilitator and organiser of the European Battery Alliance. The purpose of the agreement is to facilitate the accelerated construction financing and ultimate commercialisation of Cinovec, by assisting in:

• - Sourcing construction finance;

• - Securing grant funding; and

• - Assisting in offtake introductions and negotiations.

EIT InnoEnergy leads the European Battery Alliance which was initiated by the European Commission to create a competitive and sustainable battery cell manufacturing value chain in Europe. Since the initiation of this agreement, overall support for green energy initiatives, the development of a European Battery Industry and the continued growth of the Electric Vehicle industry has increased significantly.

• • Measured Resource Drilling Commenced

Measured Resource drilling commenced at the Cinovec Project in early August 2020, with the key aims of

• - completing a total of nineteen resource drill holes for a total of 5,550 m;

• - completing a further two hydro-geological drill holes and four geotechnical drill holes once resource drilling has been completed; and

• - the provision of approximately 10t of drill core for further metallurgical testing and to generate samples.

Drilling is aimed at converting a sufficient portion of the existing Indicated Mineral Resource to the Measured Resource category and subsequently to a Mineral Reserve, to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing. The majority of the material will be utilised in the pilot scale testing for the Front End Engineering Design ("FEED") Study. A total of nineteen diamond drill holes will be completed for 5,550 metres. A further four geotechnical holes along the planned underground decline route will be drilled and logged subsequent to the completion of the resource drilling. This data will allow final development ready designs to be completed for the declines.

Post period, the Company reported positive results from that portion of this programme that had been completed. The programme has been slightly delayed due to a combination of COVID19 and weather events and is now expected to complete in April 21.

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European Metals Holdings Limited

ARBN 154 618 989

INTERIM FINANCIAL REPORT 31 DECEMBER 2020

• • Further International Listing Initiatives

On 6 December 2020 the Company commenced trading on the US OTC Pink Market (PKC: EMHLF) and on 15 December 2020 also announced that it had been accepted to trade on the globally renowned US based NASDAQ International program (Nasdaq: ERPNF).

The Company anticipates that these initiatives will help grow its global brand, increase liquidity and shape its message to the US investment community. This program will also accelerate the Company's exposure to US shareholders and offers a cost-effective method to access US investment, providing a nexus to the largest capital markets globally. Entry to US markets will increase the ease with which North American investors can purchase European Metals securities. The ASX will continue to be the Company's main listing, with investors able to purchase shares through NASDAQ, OTC Pink, UK-based AIM market and Germany's Frankfurt Börse.

The Company also advised during the period its intention to list on The Prague Stock Exchange to provide the opportunity for Czechs to invest directly via their domestic exchange. A PSE listing would further leverage substantial national interest in the Cinovec project. These discussions are ongoing.

Corporate and Administration

• • Funding agreements

The Company entered into two separate funding agreements with 6466 Investments Pty Ltd during the period. The funds were sourced to assist in financing European Investor Relations initiatives, proposed listing in Czech and its ongoing operations. Any funds drawn down were converted to CDI's in the Company at a 15% discount to the 10-day VWAP in the Company's securities. The Company made its first drawdown of A$250k on 17 July 2020 and completed the issue of 1,049,825 CDIs. On 27 August 2020, the Company announced that it has completed the issue of 927,300 CDIs in respect to the second draw down of the funding facility. The Company received $250k in respect of the second draw down. The Company made its third drawdown of A$250k on 23 October 2020 and completed the issue of 723,323 CDIs. On 13 November 2020, the Company completed the issue of 719,821 CDIs in respect of the fourth and final draw down.

The second agreement was entered into on 30 December 2020. This facility was also for $ 1 million and on largely the same terms. The funds the subject of the second agreement were drawn down post the reporting period.

• • Senior Management Changes

On 2 November 2020, the Company announced the appointment of Mr. Dennis Wilkins as Company Secretary. Mr. Wilkins replaced Julia Beckett. Mr. Wilkins is the founder and principal of DWCorporate Pty Ltd, a corporate advisory firm servicing the natural resources industry.

Significant events after the reporting date

On 4 January 2021, the Company announced the appointment of Ambassador Lincoln Palmer Bloomfield, Jr as a Non-Executive Director of the Company. Ambassador Bloomfield is based in Washington, DC, and brings governance and regulatory experience, years of international diplomacy and security expertise to the EMH Board, along with a North American presence while his private sector experience is centered on sustainability, resilience and renewable energy.

On 6 January 2021, the Company completed the issue of 1,463,734 CDIs in respect of the full drawdown of the Fund Facility Agreement between 6466 Investments Pty Ltd and the Company of $1 million.

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