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European Lithium Limited (ASX: EUR, FRA: PF8, OTC: EULIF) (European Lithium or the Company) is pleased to announce Critical Metals Corp. (Critical Metals or CRML) has entered into a share subscription facility for up to US$125.0M from GEM Global Yield LLC SCS (GEM), a Luxembourg based private alternative investment group. Proceeds from the facility are expected to be used to fund the development of the Wolfsberg Lithium Project in Austria (Wolfsberg or Wolfsberg Project).
HIGHLIGHTS
- Critical Metals has signed an agreement for a share subscription facility for up to US$125.0M in transaction funding from Global Emerging Markets (GEM)
- Critical Metals expects to provide an update on further equity funding in the near term
- Funding will principally be used to accelerate the development of the Wolfsberg Lithium Project in Austria.
Tony Sage, Chairman, commented: “Receiving this significant and binding commitment is a huge milestone for the Company. 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 brings us closer to our stated goal to be the first local producer of lithium spodumene for the green energy transition in Europe.”
Under the terms of the definitive agreement, Critical Metals will have access to up to US$125.0M in incremental capital to fund its operations upon closing of the business combination transaction. The facility would enable Critical Metals, in its discretion but subject to the terms and conditions set forth in the definitive agreements, to draw down funds (up to US$125.0M) through the issuance of new shares directly to GEM over a three-year period after the closing of the transaction. Assuming no further redemptions are made by public stockholders of Sizzle Acquisition Corp. (Sizzle) in connection with its shareholder vote to approve the transaction, Critical Metals would now be expected to have access to up to ~US$175.0M in transaction proceeds (comprising of the GEM finance package and existing cash reserves).
The GEM finance package, together with European Lithium’s additional funding secured through the binding term sheet with Obeikan Investment Group (Obeikan)(refer to EUR announcement dated 2 June 2023), are expected to provide Critical Metals and European Lithium with significant capital to accelerate the development of the Wolfsberg Project once the transaction with Sizzle completes.
The Company can report substantial progress has been made in the development plan for the Wolfsberg project with the achievement of several key milestones highlighted by:
- Mining permit secured - spodumene mined from the project successfully demonstrated its capability to supply high-purity lithium (99.6% lithium carbonate equivalent) at pilot plant.
- Mineral Resource Estimate1 - 12.88 Mt of Measured, Indicated and Inferred classified Resources at 1.00% Li2O grade in Zone 1 only:
- Economic viability - Definitive Feasibility Study (DFS)2 that demonstrates a post-tax NPV of US$ 1.5 billion @ WACC13 6%, mined over approximately 15 years.
- Binding offtake agreement with top-tier auto manufacturer secured - direct long term lithium hydroxide supply agreement with BMW4.
- Binding agreement to build hydroxide plant - partnership with Obeikan to build lithium hydroxide processing plant in Saudi Arabia with significant cost savings expected.
- Advanced project with drilling upside – established mine and current resource estimate based only on Zone 1 with drilling undertaken showing prospectivity in Zone 2.
For full details of the DFS, please refer to EUR announcement dated 8 March 2023, “Wolfsberg Lithium Project Definitive Feasibility Study Results”. The Mineral Resources underpinning the Ore Reserve have been prepared by a competent person in accordance with the requirements of the JORC Code (2012). The Competent Person’s Statement(s) are found in the section of this ASX release titled “Competent Person’s Statement(s)”. European Lithium confirms that it is not aware of any new information or data that materially affects the information included in that release. All material assumptions and technical parameters underpinning the estimates in that ASX release continue to apply and have not materially changed.
Click here for the full ASX Release
This article includes content from European Lithium Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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European Lithium
Overview
As the global push to halt climate change gains momentum, the European Commission is looking to regionalize the battery supply chain to capitalize on the rapid electric vehicle (EV) growth and limit its dependency on other countries through heavy investment and policy changes. Europe’s electric vehicle market value reached US$29.49 million in 2021 and is projected to increase up to US$143.08 million by 2027, indicating a compounded annual growth rate of 23.4 percent in that period.
Even though Europe is one of the largest global producers of motor vehicles, it currently does not have a local supply of lithium hydroxide which is heavily used in EV battery technology. According to experts, the market is set to remain in a structural shortage until 2025
One company that aims to become the first local lithium supplier into an integrated European battery supply chain is European Lithium (ASX:EUR,FRA:PF8), a mining exploration and development company focused on exploring, identifying and acquiring lithium in Europe. The company is led by a management team with decades of experience and success in the mining and finance markets.
“Our aim is to be the first supplier of lithium from Europe, for Europe,” European Lithium chairman Tony Sage said.
The company is focused on its wholly owned Wolfsberg Lithium project located in Carinthia, Austria. The pre-existing mine is located in a mining-friendly region with multiple mineral discoveries in the surrounding area. The property features a high-grade lithium resource at an average grade of one percent lithium hydroxide, with a total resource of 12.88 million tonnes based on resources measured, indicated and inferred in zone 1 only.
The Wolfsberg Lithium project resource has the potential to double based on positive drill results in another zone on the property.
Based on the definitive feasibility study (DFS) released in March 2023, Wolfsberg Lithium Project is well positioned to become a leading producer of battery-grade lithium hydroxide in Europe. It is set to deliver high returns, leveraging low operating costs, and benefiting from a lithium market that is anticipated to be in structural undersupply during most of the life of mine. The battery-grade lithium hydroxide monohydrate (LHM) prices modeled in the DFS are projected to be at a 39-percent discount to current spot prices in 2025 and then escalate by 2 percent per annum. The estimated capex is US$866 million which supports a post-tax NPV of US$1.5 billion.
European Lithium has established several strategic relationships with an aim to deliver value to the Wolfsberg Lithium Project through development and during production. This includes a partnership with KMI for liaising with Austrian authorities.
The company commissioned Dorfner Anzaplan to construct the pilot plant, which was successfully completed on schedule. Anzaplan has also overseen the completion of metallurgical test work on bulk ore extractions. Testing will allow significantly higher recovery rates at the start of production as opposed to only assessing metallurgical data from the core as other mining companies often do, giving European Lithium the advantage of a streamline refinement process.
The company has support from the European Battery Alliance, GREENPEG and other government initiatives, believing it has the potential to become a major, first-to-market producer of lithium in Europe. The company also remains committed to clean production in an effort to support sustainability.
Based on the DFS, the company plans to begin the permitting process of its Wolfsberg Lithium project and prepare the mining plan for the mining authority to authorize the mine and concentrator construction. Afterward, the company will determine the approval requirements of the carbonate hydroxide conversion plant with the Energy Information Administration (EIA) and then initiate the final financing plan.
European Lithium, through its wholly owned Austrian subsidiary ECM Lithium Aľ GmbH (ECM), signed a binding long-term lithium offtake agreement with top-tier European auto manufacturer BMW to secure the company’s first offtake of battery grade lithium hydroxide from its Wolfsberg Lithium Project in Austria.
The company is aiming to commence production of lithium hydroxide from the project in 2027 — subject to funding and approvals by the Austrian government.
In a bid to expand its project portfolio, European Lithium executed a binding Heads of Agreement with 2743718 Ontario Inc., a subsidiary of Richmond Minerals (TSXVRMD), to acquire 100 percent of the rights, title and interest in the Bretstein-Lachtal Project, Klementkogel Project and the Wildbachgraben Project, a group of exploration licenses covering 114.6 square kilometers, targeting lithium with known occurrences in the Styria mining district of Austria.Company Highlights
- European Lithium is a mining exploration and development company focused on exploring, identifying and acquiring lithium in Europe.
- The company aims to become the first local lithium supplier into an integrated European battery supply chain.
- The company’s focus is on its wholly owned advanced Wolfsberg Lithium Project (Wolfsberg) located in Carinthia, Austria.
- Wolfsberg is a high-grade lithium resource at an average grade of one percent lithium oxide, with a total resource of 12.88 million tonnes based on measured, indicated and inferred resources in zone one only.
- Wolfsberg’s definitive feasibility study results demonstrate potential to deliver high returns, leveraging low operating costs, and benefiting from a lithium market that is anticipated to be in structural undersupply during most of the life of mine.
- The Wolfsberg resource estimate has significant upside with the potential to double based on positive drill results.
- Through its wholly owned Austrian subsidiary ECM Lithium Aľ GmbH (ECM), European Lithium signed a binding long-term lithium offtake agreement with top-tier European auto manufacturer BMW AG (BMW) to secure the company’s first offtake of battery-grade lithium hydroxide from Wolfsberg.
- The company has signed a binding agreement to build a Saudi Arabia-based hydroxide processing plant in partnership with Obeikan and deliver significant cost savings.
- The company is led by a management team with decades of experience and success in the mining and finance markets.
- European Lithium entered into a business combination agreement with Sizzle Acquisition, a US special purpose acquisition company, to which European Lithium will sell down its interest in its wholly owned Wolfsberg Lithium Project (Wolfsberg and Wolfsberg Lithium Project) and merge with Sizzle via a newly formed, lithium exploration and development company named, Critical Metals Corp.
- European Lithium has acquired 100 percent of the rights, title and interest in the Bretstein-Lachtal Project, Klementkogel Project and the Wildbachgraben Project, a group of exploration licenses covering 114.6 square kilometers, targeting lithium with known occurrences in the Styria mining district of Austria and nearby the Wolfsberg Lithium Project
- The company received high-grade lithium assays from sampling undertaken at various prospects within the Eastern Alps Lithium Satellite Projects, located in Austria, which are held 20 percent by European Lithium and 80 percent by EV Resources Limited (ASX: EVR).
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