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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

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