European Lithium’s merger secures US$125m in funding for Wolfsberg Lithium

6 July 2023 12:41

European Lithium is primed to expedite the development of the Wolfsberg Lithium Project in Australia considerably, with the Company’s recently announced merger company Critical Metals Corp, having secured an agreement with GEM Global Yield to enter a share subscription facility for up US$125M in transaction funding.

Cash Injection

Critical Metals Corp, formed through the merger of European Lithium’s former European subsidiary and NASDAQ-listed Sizzle Acquisition Corp, holds ownership in three of European Lithium’s former lithium holdings, including the primary Wolfsberg Lithium Project. The Company is expected to be listed on the NASDAQ soon, with European Lithium receiving approximately 80% of the ordinary shares in Critical Metals as part of the merger.

As per the agreement with GEM, Critical Metals will gain substantial incremental capital to fund operations at the Wolfsburg Project following the completion with Sizzle and subsequent listing on the NASDAQ. Over a three-year period after the merger, Critical Metals can draw up to US$125M by issuing new shares directly to GEM.

Funding will be put towards a number of key steps in the Wolfsberg Project development plan which includes commencing construction, funding infrastructure requirements, undertaking resource extension drilling in Zone 2 to increase the mine life, and expanding the Project’s current total resource estimate of 12.88 million tonnes of lithium at an average grade of 1 per cent Li2O.

Accelerating Lithium Exploration

By combining the funds secured through the subscription facility with additional funding from a binding term sheet with Obeikan Investment Group, European Lithium and Critical Metals are well-positioned to expedite the development of the Wolfsberg Project. The project is expected to supply approximately 70,000 metric tons of lithium concentrate annually, starting in 2025.

The Project has already obtained a mining permit and recently released a Definitive Feasibility Study, which highlights its potential to generate a post-tax NPV of US$1.5 billion over 15 years.

Testwork conducted on the Project’s spodumene at a pilot plant has demonstrated the capability to produce high-quality lithium carbonate for Europe’s green energy transition, with concentrates reaching a grade of 99.6 per cent lithium carbonate equivalent.

The Project’s potential has already attracted the attention of leading companies driving the green transition, with Critical Metals having already secured a long-term lithium hydroxide offtake agreement with automotive giant BMW.

Additionally, as part of its growth strategy, the Company continues to explore mineral exploration opportunities.

“Combined with European Lithium’s recent deal with Saudi Arabian based, Obeikan Investment Group, the Company and Critical Metals have secured approximately 65% of the total expected capex of the Wolfsberg Project and bringing us closer to our stated goal to be the first local producer of lithium spodumene for the green energy transition in Europe,” European Lithium’s Chairman Tony Sage said.

EUR’s Australian Stock Exchange-listed share price is currently trading at 10c (12:15 pm UTC+ 8 hours).


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