Annual Financial Report

CHAIRMAN'S LETTER

Dear Shareholders

Welcome to the 2025 Annual Report of European Metals Holdings Limited.

On behalf of the Board of Directors, I am pleased to present this report after a very significant year in the development of the Cinovec Lithium Project ("Project"). The Project has received the full support of both the European Union and the Czech Government, with its strategic importance being formally recognised and culminating in the award of two grants totalling approximately EUR 400 million. This very significant level of funding is a major contributor to the certainty of the Cinovec Project.

The Definitive Feasibility Study ("DFS") for the Project was also completed during the year, establishing a robust base case for the development of the Cinovec Project and confirming its potential role in enabling the local sourcing of a significant portion of the lithium required for the region's energy transition. Since completion of the DFS, the Company and Geomet s.r.o. have continued to review optimisation opportunities and early engineering initiatives, including further testwork and studies intended to support value engineering and the next phase of project development. This is particularly important for the Project, given its profile in the region and the likelihood that the Project will be one of the largest local suppliers of lithium chemicals to the European Union.

While the Project continues to benefit from strong support at both Czech Republic and European Union level, the Board remains focused on disciplined execution. Key priorities for 2026 include progressing the environmental approval process, advancing project optimisation and engineering work, continuing stakeholder engagement, and evaluating funding pathways to support the Project through the pre-Final Investment Decision ("FID") period.

We are seeing a renewed focus on energy security as well as raw material security as the world experiences a period of geopolitical uncertainty. This is particularly evident in Europe, with the European Council restating its concerns and plans for the security of the raw materials required to enable the green energy transition.

The macro conditions in the global lithium market improved over the year, and we are confident in a positive outlook for the foreseeable future. Production of electric vehicles has increased sharply, particularly in Europe, as has the demand for Energy Storage Systems. These are clearly the two key drivers for lithium demand. The ESG credentials of the Project continue to be a focus and we have made significant progress in the field of stakeholder engagement, as evidenced by the strong government support.

Finally, I would like to take this opportunity to thank all staff, advisors, contractors, our project partners, CEZ, and shareholders who continue to support us through the ebbs and flows of developing this very large Project. I look forward to continuing to update you throughout the new year as we progress permitting, project optimisation, financing discussions and the workstreams required to move the Project towards FID.  

___________________________

Keith Coughlan

EXECUTIVE CHAIRMAN

PROJECT REVIEW

In March 2025 the Company announced an update for the Cinovec Project ("Cinovec" or "the Project"), confirming that the Cinovec mineral deposit had been designated a Strategic Deposit for the purposes of the Czech Construction Code, which is a major step forward for the Project resulting in a simplified and shortened permitting timeframe.

Cinovec's Strategic Deposit designation will enable Geomet to obtain certain permits and take actions to secure the development of the Project without undue delay.  This designation helps accelerate permitting processes via:

•        Expedited approval processes - Strategically significant deposits will have priority in obtaining permits and official approvals, reducing the time required for project preparation and mining initiation.

•        Reduced administrative burden - The designation streamlines coordination between various authorities, eliminating bureaucratic obstacles and minimising assessment duplication, fulfilling "One Stop Shop" permitting assessment as required under the European Union's Critical Raw Materials Act ("CRMA").

•        Priority environmental impact assessment ("EIA") review - The EIA process may have accelerated deadlines or be coordinated to minimise delays caused by complex administrative procedures.

•        Use of exceptional procedures - Strategically significant deposits may be eligible for special legislative procedures similar to those for key infrastructure projects, potentially limiting blocking possibilities by certain institutions or civil organisations.

Overall, the Strategic Deposit status enhances the predictability and speed of permitting processes, facilitating the timely extraction of raw materials critical for energy security and industrial needs.

Also in March 2025, the Company announced that the European Commission declared Cinovec to be a Strategic Project under the CRMA, confirming the importance of Cinovec in supplying battery grade lithium chemicals to the European battery supply chain.

Strategic Project status will bring with it explicit support from European institutions, including financial institutions, and permitting will be brought within accelerated and simplified process and time limits set out within the CRMA.

The CRMA aims to strengthen security of critical raw material supplies, reduce dependence on imports from third countries, and support innovation in the sustainable sourcing of mineral resources.

In April 2025, the Company announced an update in relation to grant funding by the European Union, whereby the Czech selection panel of the managing authority for the EU Just Transition Fund ("JTF") approved a CZK800 million (US$36 million) grant to the Cinovec Project. The approval of financial support for the Project under the JTF represents a further important confirmation of support from European and Czech institutions.

The JTF grant was provided conditional on the Project EIA being submitted by 31 December 2025 (which was confirmed by the Company subsequent to the end of the period) and approval of the EIA by the Czech Ministry of Environment by 30 June 2026.

In August 2025 the Company announced that Geomet s.r.o., its associate, was granted an updated Preliminary Mining Permit ("Permit") by the Czech Ministry of the Environment for the southern part of the Cinovec deposit (Cinovec-III South). 

The Permit, valid for a period of 8 years until 2033, covers an area of 1.4807km². This Permit serves as a critical legal prerequisite for obtaining a Final Mining Permit and secures the Company's priority right to apply for and obtain a Final Mining Area and Final Mining Permit. Together with the existing Preliminary Mining Permits for Cinovec- Northwest and Cinovec-East (valid until 2028), this Permit encompasses the entirety of the Cinovec ore reserve.

The Company also noted its plans to consolidate all three Preliminary Mining Permits (Cinovec Northwest, Cinovec-East and Cinovec-South) into a single Preliminary Mining Permit. This consolidation is a strategic step to facilitate the development of the mine by streamlining the process of obtaining a single Final Mining Area and Final Mining Permit.

Also in August 2025, the Company announced an EUR11.0m Geomet cash call to fund completion of the Cinovec Definitive Feasibility Study, with the Company's share, pursuant to the Project's ownership structure, being EUR5.39m (~AU$9.67m).

To support the cash call obligation, the Company confirmed completion of a AU$3.0m placement via the issue of 18.75 million shares at $0.16 per share, with proceeds applied to the obligation and working capital.

Consistent with the strategy to minimise shareholder dilution, in September 2025 the Company announced the refinancing of the CZK121m (~AU$8.86m) Dukla loan that was advanced to Geomet s.r.o. in December 2023 for the acquisition of land at Dukla. The land purchase was originally contemplated as the site of the Lithium Chemical Plant, however given the plant's proposed relocation to Prunéřov, most of the land is no longer required. The refinance resulted in the Company retaining a buy-back right over the loan, exercisable at any time prior to 31 December 2025.

In November 2025 the Company announced that, subject to completion of administrative processes, Geomet s.r.o. had been informed of the award of a grant of up to EUR360 million (AU$645 million) under the "Strategic Investments for a Climate-Neutral Economy" programme (the "Programme"), administered by the Ministry of Industry and Trade of the Czech Republic for the development of the Company's Cinovec Project.

The Programme is designed to support significant investments in the production and expansion of equipment, key components, and critical raw materials essential for the transition to a climate neutral economy. The Programme is aligned with the European Commission's Temporary Crisis and Transition Framework and aims to accelerate economic development and investment in strategic sectors.

In December 2025 the Company released the Cinovec Definitive Feasibility Study ("DFS"), confirming the Project as a long-life producer of battery grade lithium carbonate strategically located within the European EV and battery manufacturing corridor.

Highlights of the DFS include:

•        Steady-state (excluding ramp up/ramp down) production of 37,500 tonnes per annum (tpa) of battery-grade lithium carbonate (Li₂CO₃), representing approximately 5.2% of EU demand in 2030 and sufficient for up to 1,300,000 60kWh EV batteries annually.

•        26+ year operating life, underpinned by a Mineral Resource Estimate of 747.54 Mt @ 0.19% Li (0.40% Li₂O) (7.45 Mt lithium carbonate equivalent ("LCE")) and an Ore Reserve of 54.40 Mt @ 0.27% Li (0.58% Li₂O) (145,000t contained Li), with expansion optionality.

•        Robust economics based upon the first 23 years of the full life of mine ("LOM") 27-year production schedule: (ungeared, using flat US$26,000 lithium carbonate price) 

o  Pre-tax NPV8%: US$1.455bn (Inclusive of grants and exclusive of inferred resources)

o  Pre-tax IRR: 14.8% (Inclusive of grants and exclusive of inferred resources)

o  LOM C1 costs: US$12,621/t 

o  LOM AISC: US$13,879/t

•        Initial CAPEX of US$1.72bn (including contingency and net of approved grants) and sustaining CAPEX (life of mine) of US$0.498B.

•        Vertically integrated project comprising underground mine, Prunéřov beneficiation and lithium chemical plant and all necessary integration of utilities and transport requirements.

•        Strong ESG profile aligned with EU CRMA, Equator Principles and International Finance Corporation standards.

Completion of the DFS enables advancement of key workstreams:

•        EU stakeholder engagement for additional grant and debt support

•        Formal project financing discussions

•        Finalisation of advanced off-take negotiations

•        Optimisation, permitting and pre-FID planning focused upon improving the base case DFS

EVENTS AFTER REPORTING PERIOD

On 30 January 2026, the Company successfully completed a $3,459,680 capital raise, having issued 10,811,500 fully paid ordinary shares at an issue price of $0.32 per share.

The Company also announced that Geomet s.r.o. was informed that it had received Regional Rezoning approval for the Cinovec Project, with the Ústí nad Labem Regional Assembly voting to support the rezoning application submitted by the Czech Ministry of Industry and Trade.

The rezoning defines the Project's areas and corridors for lithium mining and processing, including corridors for necessary utility supply developments including water, electricity and gas at all of the Project's sites. It also defines the area for the storage and processing of materials from mining activities and the treatment of lithium concentrate at the Prunéřov Processing Plant site, and the planned tailings management facilities in the Doly Nastup Tušimice ("DNT") mining area.

On 10 February 2026, the $750,000 loan payable to a third party was repaid in full via a cash payment.

Other than the matters referred to above, no other matter or circumstance has arisen since 31 December 2025 that has significantly affected, or may significantly affect, the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

RISKS AND UNCERTAINTIES 

The Group's activities have inherent risk, and the Board is unable to provide certainty of the expected results of activities, or that any or all of the likely activities will be achieved. The material business risks faced by the Group that could influence the Group's future prospects, and how the Group manages these risks, are provided below. 

Operational risk 

The Company may be affected by various operational factors. In the event that any of these potential risks eventuate, the Company's operational and financial performance may be adversely affected. No assurances can be given that the Company will achieve commercial viability through successful exploration outcomes on its tenement holdings. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.

The operations of the Company may be affected by various factors, including failure to achieve predicted grades during mining, operational and technical difficulties encountered during mining, lack of infrastructure in the Company's areas of operation, unanticipated metallurgical problems which may affect value of defined resources, increases in the costs of consumables, spare parts, plant and equipment.

Mineral Resource estimates are made in accordance with the 2012 edition of the JORC Code. Mineral resources are estimates only. An estimate is an expression of judgement based on knowledge, experience and industry practice. Estimates may alter significantly when new information or techniques become available. Resource estimates can be imprecise and depend on interpretations, which may prove to be inaccurate.

The Company's interests in mining tenements are at various stages of exploration and potential production and potential investors should understand that mineral exploration and production is a speculative and high-risk undertaking that may be impeded by circumstances and factors beyond the control of the Company. The Company has interests in mining tenements in the Czech Republic which operate under different regulatory conditions which may impact on time taken to evaluate projects and may affect the viability of resources.

There can be no assurance that the tenements, or any other exploration properties that may be acquired in the future, will result in the exploitation of an economic mineral resource. Even though an apparently viable deposit has been identified, there is no guarantee that it can be economically exploited.

The Company will need to apply for a mining lease to undertake development and mining on the relevant tenement. There is no guarantee that the Company will be granted a mining lease and if it is granted, it will be subject to conditions which may impact on the financial viability of the project. 

Project development, permitting and pre-FID execution risk

The Cinovec Project has now progressed to a stage where several interrelated development risks have increased in importance. These include the timing and outcome of the EIA process, the timing of subsequent permitting and approvals, the incorporation of optimisation outcomes and further engineering into the project development pathway, and the availability of funding to support the Project through the pre-FID period. Delays in any of these areas may affect the timing of development milestones, including FID, and may increase project costs or require changes to scope, sequencing or implementation strategy. The Group seeks to manage these risks through active engagement with regulators, continued stakeholder consultation, staged engineering and optimisation work, disciplined budget management and ongoing evaluation of funding alternatives.

Renewals

Mining and exploration tenements are subject to periodic renewal. The renewal of the term of granted tenements is subject to compliance with the applicable mining legislation and regulations and the discretion of the relevant mining authority. Renewal conditions may include increased expenditure and work commitments or compulsory relinquishment of areas of the tenements. The imposition of new conditions or the inability to meet those conditions may adversely affect the operations, financial position and/or performance of the Company. The Company considers the likelihood of tenure forfeiture to be low given the laws and regulations governing exploration in the Czech Republic and the ongoing expenditure budgeted for by the Company. However, the consequence of forfeiture or involuntary surrender of a granted tenement for reasons beyond the control of the Company could be significant.

Title to tenements

Notwithstanding that the exploration licenses, the subject of the Cinovec Project have been granted, if the application for the licenses did not strictly comply with the application requirements (i.e. the required reports were not lodged or were lodged late), there is a risk that the tenements could be deemed invalid. 

Global conditions

General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company's potential development activities, as well as on its ability to fund those activities.

General economic conditions, laws relating to taxation, new legislation, trade barriers including tariffs, interest and inflation rates, currency exchange controls, national and international political circumstances (including outbreaks in international hostilities, wars, terrorist acts, sabotage, subversive activities, security operations, labour unrest, civil disorder, and states of emergency), natural disasters (including fires, earthquakes and floods), and quarantine restrictions, epidemics and pandemics, may have an adverse effect on the Company's operations and financial performance, including the Company's exploration and development activities, as well as on its ability to fund those activities.

Regulatory compliance

Regulatory risks of the Company's operating activities are subject to extensive laws and regulations relating to numerous matters including resource licence consent, environmental compliance and rehabilitation, taxation, employee relations, health and worker safety, waste disposal, protection of the environment, protection of endangered and protected species and other matters. The Company requires permits from regulatory authorities to authorise the Company's operations. These permits relate to exploration, development, production and rehabilitation activities. While the Company believes that it will operate in substantial compliance with all material current laws and regulations, agreements or changes in their enforcement or regulatory interpretation could result in changes in legal requirements or in the terms of existing permits and agreements applicable to the Company or its properties, which could have a material adverse impact on the Company's current operations or planned activities. 

Obtaining necessary permits can be a time-consuming process and there is a risk that Company will not obtain these permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could materially delay or restrict the Company from proceeding with the development of a project or the operation or development of a mine. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result in material fines, penalties or other liabilities. In extreme cases, failure could result in suspension of the Company's activities or forfeiture of one or more of the tenements, the subject of the Projects.

For the Cinovec Project specifically, permitting involves multiple stages and authorities, including environmental, mining, land access, infrastructure and other related approvals. The timing of these processes may be affected by administrative review periods, requests for additional information, stakeholder or community consultation, cross-border consultation requirements and potential appeals. There is also a risk that permits, where granted, may be subject to conditions that affect the timing, design, scope or economics of the Project.

Climate

There are a number of climate-related factors that may affect the operations and proposed activities of the Company. The climate change risks particularly attributable to the Company include: (a) the emergence of new or expanded regulations associated with the transitioning to a lower-carbon economy and market changes related to climate change mitigation. The Company may be impacted by changes to local or international compliance regulations related to climate change mitigation efforts, or by specific taxation or penalties for carbon emissions or environmental damage. These examples sit amongst an array of possible restraints on industry that may further impact the Company and its business viability. While the Company will endeavour to manage these risks and limit any consequential impacts, there can be no guarantee that the Company will not be impacted by these occurrences; and (b) climate change may cause certain physical and environmental risks that cannot be predicted by the Company, including events such as increased severity of weather patterns and incidence of extreme weather events and longer-term physical risks such as shifting climate patterns. All these risks associated with climate change may significantly change the industry in which the Company operates.

General risks

Future funding requirements and the ability to access debt and equity markets. The Group's funding requirements are expected to continue as the Cinovec Project advances through permitting, optimisation, engineering and pre-FID activities. The Group continues to assess funding alternatives at both Company and project level, including equity, debt, strategic investment and other arrangements. There can be no assurance that funding will be available on acceptable terms, in the timeframe required, or at all.. Additional funding will be required in the event development costs exceed the Company's estimates and to effectively implement its business and operations plans in the future, to take advantage of opportunities for acquisitions, joint ventures or other business opportunities, and to meet any unanticipated liabilities or expenses which the Company may incur, additional financing will be required. In addition, should the Company consider that its development results justify commencement of production on any of its projects, additional funding will be required to implement the Company's development plans, the quantum of which, remain unknown at the date of the Annual report. The Company may seek to raise further funds through equity or debt financing, joint ventures, production sharing arrangements or other means. Failure to obtain sufficient financing for the Company's activities and future projects may result in delay and indefinite postponement of development or production on the Company's properties or even loss of a property interest or interest in a joint venture. There can be no assurance that additional finance will be available when needed or, if available, the terms of the financing might not be favourable to the Company and might involve substantial dilution to shareholders.

Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment. The Company may not be able to replace its senior management or key personnel with persons of equivalent expertise and experience within a reasonable period of time or at all and the Company may incur additional expenses to recruit, train and retain personnel. Loss of such personnel may also have an adverse effect on the performance of the Company.

Competition

The industry in which the Company will be involved is subject to domestic and global competition. Although the Company will undertake all reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or actions of its competitors, which activities or actions may, positively or negatively, affect the operating and financial performance of the Company's projects and business.

Market conditions

Share market conditions may affect the value of the Company's shares regardless of the Company's operating performance. Share market conditions are affected by many factors such as: 

The market price of shares can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company, or any return on an investment in the Company. Potential investors should be aware that there are risks associated with any securities investment. Securities listed on the stock market, and in particular securities of exploration companies experience extreme price and volume fluctuations that have often been unrelated to the operating performance of such companies. These factors may materially affect the market price of the shares regardless of the Company's performance. In addition, after the end of the relevant escrow periods affecting shares in the Company, a significant sale of then tradeable shares (or the market perception that such a sale might occur) could have an adverse effect on the Company's share price.

Commodity price volatility and exchange rate

If the Company achieves success leading to mineral production, the revenue it will derive through the sale of product exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors. Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

Government policy changes 

Adverse changes in government policies or legislation may affect ownership of mineral interests, taxation, royalties, land access, labour relations, and mining and exploration activities of the Company. It is possible that the current system of exploration and mine permitting in the Czech Republic may change, resulting in impairment of rights and possibly expropriation of the Company's properties without adequate compensation.

Dilution

In the future, the Company may elect to issue shares or engage in capital raisings to fund development or construction of the Project and growth, for investments or acquisitions that the Company may decide to undertake, to repay debt or for any other reason the Board may determine at the relevant time. While the Company will be subject to the constraints of the ASX Listing Rules regarding the percentage of its capital that it is able to issue within a 12-month period (other than where exceptions apply), shareholder interests may be diluted as a result of such issues of shares or other securities.

Taxation

The acquisition and disposal of shares will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring shares from a taxation viewpoint and generally. To the maximum extent permitted by law, the Company, its officers and each of their respective advisers accept no liability and responsibility with respect to the taxation consequences of subscribing for shares under any prospectus.

Litigation

The Company is exposed to possible litigation risks including, tenure disputes, environmental claims, occupational health and safety claims and employee claims. Further, the Company may be involved in disputes with other parties in the future which may result in litigation. Any such claim or dispute if proven, may impact adversely on the Company's operations, reputation, financial performance and financial position. The Company is not currently engaged in any litigation.

Environmental regulation

The operations and proposed activities of the Company are subject to Czech laws and regulations concerning the environment. As with most exploration projects and mining and mineral processing operations, the Company's activities are expected to have an impact on the environment, particularly if advanced exploration or mine and processing plant development proceeds. Whilst the processing plant for the Cinovec Project is to be a rehabilitated industrial site (Prunéřov EPR1), outstanding rehabilitation requirements may arise as a result of finalisation of this. It is the Company's intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

Mining operations have inherent risks and liabilities associated with safety and damage to the environment and the disposal of waste products occurring as a result of mineral exploration and production. The occurrence of any such safety or environmental incident could delay production or increase production costs. Events, such as unpredictable rainfall or bushfires may impact on the Company's ongoing compliance with environmental legislation, regulations, and licences. Significant liabilities could be imposed on the Company for damages, clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous operations or non-compliance with environmental laws or regulations.

The disposal of mining and process waste and mine water discharge are under constant legislative scrutiny and regulation. There is a risk that environmental laws and regulations become more onerous making the Company's operations more expensive.

Approvals are required for land clearing and for ground disturbing activities. Delays in obtaining such approvals can result in the delay to anticipated exploration programs or mining activities and any other rehabilitation requirements arising.

In addition, the Cinovec Project is subject to an extensive EIA process and related stakeholder engagement, including in relation to cross-border impacts and land access matters. The scale and complexity of these processes may result in longer approval timeframes than originally anticipated, and there can be no assurance that all environmental and related approvals will be obtained on acceptable terms or within the desired timeframe.

The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of European Metals Holdings Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the financial year ended 31 December 2025.

Directors

The following persons were Directors of European Metals Holdings Limited during the whole of the financial period and up to the date of this report, unless otherwise stated:

Company secretary

Mr Henko Vos - appointed: 1 February 2024, resigned: 14 July 2025

Ms Sujana Karthik - appointed: 14 July 2025, resigned: 5 November 2025

Ms Carly Terzanidis - appointed: 5 November 2025

Ms Terzanidis is an experienced corporate professional with 20 years' prior experience in the financial services industry, with a focus on capital markets and governance, and is a Chartered Secretary. Ms Terzanidis is an Associate of the Governance Institute of Australia and holds a Bachelor of Commerce with majors in Accounting and Corporate & Resources Administration. Ms Terzanidis is currently company secretary of a number of ASX listed companies.

Principal activities

The Group is primarily involved in the exploration activities of the Cinovec lithium project in the Czech Republic.

Review of operations

The 12 months ended 31 December 2025 have been one of significant growth and development for the Group. For further information refer to the Project Review section of this report.

Results of operations

The loss for the Group after providing for income tax amounted to $8,210,596 (six-months ended 31 December 2024: $1,250,604).

Financial position  

The net assets of the Group have decreased by $2,121,087 to $32,211,480 at 31 December 2025 (31 December 2024: $34,332,567).

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the Group during the financial period other than as disclosed in the Project Review section of this report.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial period.

Information on Directors

'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

 Meetings of Directors

The number of meetings of the Company's Board of Directors ('the Board') held during the period ended 31 December 2025, and the number of meetings attended by each Director were:

The Board considers remuneration, nomination, and Environmental, Social, and Governance ("ESG") matters as integral to its strategic oversight. As such, these matters were discussed as part of Board meeting agendas rather than solely through separate committee meetings. This approach ensures that all Directors remain actively engaged in these critical areas, fostering a holistic and informed decision-making process aligned with the Company's objectives and governance principles.

Indemnifying officers or auditor

During the financial year ended 31 December 2025 the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

Shares under option

Unissued ordinary shares of European Metals Holdings Limited under option at the date of this report are as follows:

No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any other body corporate.

Shares issued on the exercise of options

There were no ordinary shares of European Metals Holdings Limited issued on the exercise of options during the year ended 31 December 2025 and up to the date of this report.

Performance Rights

Performance rights on issue at the date of this report is as follows:

Environmental, Social and Governance

The Company has adopted a set of ESG metrics and disclosures following the recommendations released by the World Economic Forum ("WEF") in Geneva, Switzerland which are acknowledged as the gold standard for ESG reporting.  

The establishment of an ESG Committee at Board level is chaired by Ambassador Lincoln Bloomfield who has considerable private sector experience centred on sustainability, resilience and renewable energy. Ambassador Bloomfield has stated, "European Metals is making every effort to ensure that any finished product containing our lithium will satisfy the public's need for assurance that high ESG standards have been upheld at every stage of our production process. We are committed to the well-being of our workforce, minimising environmental impact throughout our process, and engaging with the local community".

The Company's ESG transparency commitment is a precursor to an independent lithium production Life Cycle Assessment2 ("LCA") which includes a full Carbon Footprint assessment.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

Non-audit services

There were no non-audit services provided during the financial period by the auditor.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' report.

Corporate Governance Statement

The Company's 2025 Corporate Governance Statement has been released as a separate document and is located on the Company's website at https://www.europeanmet.com/corporate-governance/ .

Rounding of amounts

The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar.

Remuneration report (audited)

This report details the nature and amount of remuneration for each Director of the Company, and key management personnel ("KMP"). The Directors are pleased to present the remuneration report which sets out the remuneration information for European Metals Holdings Limited's Non-Executive Directors, Executive Directors and other key management personnel.

A. Principles used to determine the nature and amount of remuneration

The remuneration policy of the Group has been designed to align Director and management objectives with shareholder and business objectives by providing a fixed remuneration component, and offering specific long-term incentives based on key performance areas affecting the Group financial results. The Board of the Company believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best management and Directors to run and manage the Group, as well as create goal congruence between Directors, executives and shareholders

The Board's policy for determining the nature and amount of remuneration for Board members and senior executives of the Group is as follows: 

·      The remuneration policy, setting the terms and conditions for the executive Directors and other senior executives, was developed by the Board. All executives receive a base salary (which is based on factors such as length of service and experience), superannuation and options and performance incentives (as determined by the Board and approved by shareholders as required). The Board reviews executive packages annually by reference to the Group's performance, executive performance, and comparable information from industry sectors and other listed companies in similar industries.

·      Executives are also entitled to participate in the employee share and option arrangements via the employee incentive plan. 

·      All remuneration paid to Directors and Executives is valued at the cost to the Group and expensed.

·      The Board policy is to remunerate Non-executive Directors at an amount of $70,000 per annum (or equivalent in other currencies), including an allowance for membership of committees, and to remunerate Executive Chairman at an amount of $490,000 per annum, including superannuation but excluding bonuses and long-term incentives. The Board determines payments to the Non-executive Directors and reviews their remuneration annually based on market practice, duties, and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to Non-executive Directors is subject to approval by shareholders at the Annual General Meeting. Fees for Non-executive Directors are not linked to the performance of the Group. However, to align Directors' interests with shareholder interests, the Directors are encouraged to hold shares in the Company.

·      The remuneration policy has been tailored to increase the direct positive relationship between shareholders' investment objectives and Directors' and Executives' performance. The policy allows for the issue of options to the Directors and Executives to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth. For details of Directors' and Executives' interests in shares, options and performance shares at year end, refer to sections d, e and f of the remuneration report.

At the 2025 AGM of shareholders, 82.9% of the votes received supported the adoption of the remuneration report for the six-month period ended 31 December 2024. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.

B. Details of remuneration

Details of the nature and amount of each element of the emoluments of each of the KMP of the Company (the Directors) for the year ended 31 December 2025 are set out in the following tables:

The maximum amount of remuneration for Non-Executive Directors is $300,000 as approved by shareholders.

During the financial period, the Company did not engage any remuneration consultants.

C. Service agreements

It was formally agreed at a meeting of the Directors that the following remuneration be established; there are no formal notice periods or termination benefits payable on termination.

Mr Keith Coughlan, Executive Chairman, receives a salary of $460,000 plus statutory superannuation contribution per annum.

D. Loan shares

During the financial year ended 31 December 2025 no shares were issued to KMP under the Plan (transitional financial year ended 31 December 2024: nil). 

Loan shares on issue to KMP under the Plan are as follows:

The terms of the loan shares are disclosed in note 16(c).

E. Options issued for the financial year ended 31 December 2025

No options were issued as part of the remuneration for the financial year ended 31 December 2025 (six-month period ended 31 December 2024: nil).  

No options were held by KMP at 31 December 2025 (31 December 2024: nil). 

F. Performance rights granted for the financial year ended 31 December 2025

No performance rights were granted as part of the remuneration for the financial year ended 31 December 2025 (31 December 2024: nil).

G. Equity instruments issued on exercise of remuneration options

No equity instruments were issued during the financial year ended 31 December 2025 to Directors or other KMP (31 December 2024: Nil).

H. Loans to Directors and key management personnel

No loans were issued to Directors or KMP during the financial year ended 31 December 2025 (31 December 2024: Nil). See section D for share loans currently recognised from previous issue.

I. Company performance, shareholder wealth and Directors' and executives' remuneration

The remuneration policy has been tailored to increase the direct positive relationship between shareholders' investment objectives and Directors' and executives' performance. This may be facilitated through the issue of options to the majority of Directors and executives to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth. At commencement of mine production, performance-based bonuses based on key performance indicators are expected to be introduced.

J. Other information - Shareholdings

K. Other transactions with key management personnel

Purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions. 

During the year the Company received company secretarial, accounting and bookkeeping services from Nexia Perth (Nexia) and Occam Corporate Pty Ltd.

Nexia, a company at which the spouse of Executive Chairman, Keith Coughlan, acted as KMP from January 2025 to April 2025 received $55,071 (2024: $110,015) plus GST from the Company. The amount payable to Nexia as at 31 December 2025 was nil (31 December 2024: $15,543).

Occam Corporate Pty Ltd, a company at which the spouse of Executive Chairman, Keith Coughlan, acts as Director from April 2025 to December 2025 received $61,311 (2024: nil) plus GST from the Company. The amount payable to Occam Corporate Pty Ltd as at 31 December 2025 was $32,000 (31 December 2024: nil). In addition, the Company charges Occam Corporate Pty Ltd's $2,000 per month for use of the Company's office.

There were no other transactions with KMP during the financial year ended 31 December 2025.

L. Additional information

The earnings of the Group for the five years to 31 December 2025 are summarised below:

Reconciliation from EBITDA to the loss after income tax

The factors that are considered to affect total shareholders return ('TSR') are summarised below:

This concludes the remuneration report, which has been audited.

This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the Directors