European Lithium Ltd provided an update on the progress of its proposed merger, NASDAQ listing and additional equity investment.
The company confirms that Critical Metals Corp has secured an equity investment facility for additional capital and it is expected to secure more capital in the coming weeks, leading up to shareholder approval of the transaction.
Business combination agreement
European Lithium entered into a business combination agreement with Sizzle Acquisition Corp in October 2022 to combine its wholly owned 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 under the symbol CRML. Once the transaction is completed, European Lithium will be issued US$750 million worth of ordinary shares in CRML.
Sizzle Acquisition Corp. and Critical Metals have now secured an additional investment facility from an investment vehicle managed by a New York based financial group. This is expected to provide the new entity with US$10 million in capital at closing.
European Lithium says that the proceeds from the facility are expected to be used to fund the development of the Wolfsberg Lithium Project in Austria.
European Lithium chairman Tony Sage said: “European Lithium and Critical Metals Corp. are excited to welcome another new investor, and more committed equity capital to fund the Critical Metals transaction as well as the Wolfsberg Project.”
The transaction was approved by European Lithium shareholders in January and is progressing through the approval process and remains subject to SEC and Sizzle shareholder approval.
Wolfsberg Project milestones to date
Substantial progress has been made in the development plan for the Wolfsberg Project, with several key milestones achieved to date. These include:
mining permit secured: Spodumene mined from the project successfully demonstrated its capability to supply high-purity lithium (99.6% lithium carbonate equivalent) at the pilot plant;
mineral resource estimate: 12.88 million tonnes of measured, indicated and inferred resources at 1% lithium oxide grade in Zone 1 only;
economic viability: Definitive feasibility study (DFS) demonstrates a post-tax net present value (NPV) of US$1.5 billion at a 6% weighted average cost of capital mined over 15 years;
binding offtake agreement with top-tier auto manufacturer secured: a direct long term lithium hydroxide supply agreement with BMW;
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;
Critical Metals entered into a share subscription facility for up to US$125 million with GEM Global Yield, a Luxembourg-based private alternative investment group, with proceeds to be used to fund the Wolfsberg Project’s development.
The company has identified several key catalysts in its project development plan for Wolfsberg that include finalising funding for Wolfsberg infrastructure requirements, commencing construction, and undertaking resource extension drilling in Zone 2 to increase mine life.
European Lithium previously advised that it will soon commence the initial work program at its newly acquired Austrian Lithium Projects, consisting of 245 exploration licences covering a total area of 114.6 sq. kilometres about 70 kilometres north of Wolfsberg. The licences cover ground that is considered prospective for lithium occurrences and initial surface sampling showing 3.98% lithium oxide.