Quarterly and Cash Flow Report Quarter Ended 31 December 2022

The Board of European Lithium Limited (ASX: EUR, FRA: PF8, OTC: EULIF) (the Company) is pleased to present its activities report and Appendix 5B for the three months ending 31 December 2022.

SUMMARY OF KEY UPDATES

• EUR signed a long term agreement (LTA) with BMW to supply battery grade lithium hydroxide (LiOH).
  
• DRA Global (DRA) as lead consultant managing the Definite Feasibility Study (DFS) has completed the advanced technical and financial planning work during the quarter with the anticipated completion date for the DFS being the end of the first quarter in 2023.
• Dorfner Anzaplan (Dorfner) continue to work on optimizing the concentrator flow to increase spodumene concentrate levels with the aim to reduce energy consumption for all further processing.
• Planning for Zone 2 exploration drilling completed. The application for approval lodged at the mining authority.
• EUR continues to collaborate with a research group from University of Graz to develop local production of lithium hydroxide from recycled Lithium-Ion batteries.
• GREENPEG (EU-funded) supported infield and underground work continues.
• E47/4144 located in the northwest of Australia continues to progress through the WA Mining Act regulatory application process.
• The Company entered into a business combination agreement with Sizzle Acquisition Corp, pursuant to which EUR will sell its ownership interest in subsidiary entities which together hold the Wolfsberg Lithium Project, and be issued US$750 million, worth of shares in the combined entity representing approximately 80% ownership interest, in Critical Metals Corp which is expected to be listed on NASDAQ.
• Subsequent to the quarter end, the Company entered into a non-binding Memorandum of Understanding with Obeikan Investment Group to build and operate a hydroxide plant in Saudi Arabia for the 100% owned Wolfsberg Project.

NASDAQ Merger

On 26 October 2022, the Company announced that it has entered into a business combination agreement with Sizzle Acquisition Corp., a US special purpose acquisition company listed on NASDAQ (NASDAQ:SZZL) (Sizzle), pursuant to which EUR will combine its wholly owned Wolfsberg Lithium Project (Wolfsberg Project) with Sizzle via a newly-formed, lithium exploration and development company named “Critical Metals Corp.” which is expected to be listed on NASDAQ (Transaction).

On 23 December 2022, the Company advised that the Form F-4 Registration Statement had been filed with the U.S. Securities and Exchange Commission in connection with the Transaction.

Upon the closing of the Transaction, EUR will be issued US$750 million worth of ordinary shares in Critical Metals Corp, which represents an approximate 80% ownership interest in the combined entity. It is anticipated that the Transaction will complete in the first half of 2023, subject to the satisfaction or waiver of the conditions precedent to closing of the Transaction.

Capital Movements

During the quarter, the Company issued the following securities:

• 26 October 2022 – Issue of 30,000,000 listed options ($0.075 each expiring 19 April 2024) to Evolution Capital Pty Ltd in connection with its engagement as lead manager to the placement previously undertaken by the Company (refer ASX announcement released on 6 April 2022) which were immediately exercised resulting in the issue of 30,000,000 shares. On the same date, the Company issued 7,000,000 shares upon the exercise of unlisted options ($0.06 each expiring 27 January 2025) and a further 7,000,000 shares upon the exercise of unlisted options ($0.08 each expiring 27 January 2025).
  
• 10 November 2022 – Issue of 5,000,000 shares to Wombat Resources Pty Ltd (of its nominee) as part consideration for the acquisition of the legal and beneficial interests in E47/4144.

Appendix 5B Quarterly Report and Statement of Cash Flows

The ASX Appendix 5B quarterly report is attached to and lodged with this report. The Company’s

Appendix 5B Quarterly Report covers the 3-month period from 1 October 2022 to 31 December 2022.

Exploration and evaluation expenditure during the quarter was $1,094k, associated with the advancement of the Wolfsberg Project. Administration and corporate expenditure during the quarter was $814k which comprised Director fees ($150k), administration and corporate costs ($521k), promotion and marketing expenses ($58k) and overseas listing expenses ($85k). Investing activities during the quarter was cash consideration for the acquisition of the legal and beneficial interests in E47/4144 ($11k), purchase of shares in listed entity CuFe Limited (ASX: CUF) ($212k), investment in unlisted entity which holds an exploitation permit for rare earths in Greenland ($2,250k) and expenses in relation to the merger Transaction ($2,412k). In accordance with the terms in the business combination agreement pursuant to the Transaction, the Company will be reimbursed for expenses incurred upon the successful completion of the Transaction. Financing activities during the quarter was $3,230k received from the exercise of options and $750k in relation to the advancement of a short-term loan to Cyclone Metals Ltd (ASX: CLE).

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