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19/06/2024
Mining News

European Lithium spreads its wings with bolt-on acquisitions to expand Austrian lithium dominance

Fresh off the release of a landmark feasibility study at its flagship Wolfsberg Lithium Project, which laid out a path for European Lithium to become the continent’s first supplier of battery grade lithium hydroxide, the developer will expand its dominant position in the Austrian lithium domain with a new acquisition.

European Lithium will secure three projects in the heart of the country’s Styria mining district, taking command of over 114km2 of turf prospective for spodumene pegmatites.

Supported by

The Bretstein-Lachtal, Klementkogel and Wildbachgraben projects are all underexplored and located adjacent to EUR’s Wolfsberg project.

Reconnaissance exploration has already confirmed the presence of multiple pegmatite bodies with rock chip samples taken by the project’s previous Toronto-listed owner hitting grades of up to 2.67% Li2O.

EUR will pick up the ground for the issuance of just $250,000 cash, 2 million shares and 2 million options to Richmond’s subsidiary Ontario Inc. It comes ahead of a merger which should see Wolfsburg listed on the NASDAQ via a SPAC listing under the guise of Critical Metals Corp.

“The acquisition is an excellent opportunity to secure ground in a largely unexplored area highly prospective for lithium and builds on our portfolio of European projects in a known jurisdiction where we have exploration and development experience,” EUR chairman Tony Sage said.

“The Company is in the final stages of completing a proposed merger transaction that will see the advanced Wolfsberg Lithium Project develop under the control of Critical Metals Corp. that intends to list on NASDAQ.

“Once complete, together with our Ukrainian assets, the Company will refocus on building and developing critical metal projects in Europe.”

Wolfsberg repeats?

The Bretstein-Lachtal project is the largest of the new acquisitions, covering 191 licences over 89.2km2, 80km north-west of Wolfsberg.

Wildbachgraben contains 32 licences over 14.9km2 to the immediate east of the proposed Wolfsberg mine, while Klemenkogel boasts 22 licences over 10.5km2 to the north of Wolfsberg.

Bretstein-Lachtal is shaping as the most prospective early doors, with historical surface mapping from the early 2000s reporting lithium with grades of up to 2.93% Li2O and spodumene crystals as large as 10cm.

Of course, that was long before the rise of the electric vehicle sector made lithium the world’s hottest commodity, with prices rising to around US$80,000/t last year for battery chemicals.

Reconnaisance by Richmond last summer found multiple pegmatites, confirming earlier findings, with 10cm wide crystal chips and pegmatites with sample grades from 0.51%-2.67% Li2O.

While little is known about existing outcrops and the spatial distribution of pegmatites at Wildbachgraben and Klementkogel, spodumene bearing pegmatites have been reported in past academic work stretching back to the 1980s.

EUR will now enter a three month due diligence period, with settlement expected to occur on or before July 7, with conditions including various approvals and the incorporation of a new Austrian entity by European Lithium.

Once the acquisition is complete EUR plans to undertake stakeholder engagement, detailed geological and structural mapping to determine the potential extent of pegmatite veins and lenses, trenching and sampling, geophysical investigations and the definition of potential drill targets.

That will mainly focus on the more advanced Bretstein-Lachtal area to begin with.

First mover

The new acquisition comes within weeks of the release of the landmark DFS for the Wolfsberg mine. concentrator and hydrometallurgical lithium hydroxide plant.

European Lithium’s study placed a US$1.5 billion post-tax NPV on the project, which could become the first onshore lithium hydroxide supplier for the EU’s hungry EV market and growing Gigafactory scene.

Backed by an offtake deal with BMW, the DFS shows the mine and downstream processing operation will generate 8800t of lithium hydroxide monohydrate per annum for 14.6 years.

That would amount to some 129,000t over the life of mine from the completion of a hydrometallurgical downstream processing facility in 2026.

With a robust DFS and internal rate of return of 33.3%, well above standard industry investment thresholds, construction of that plant is expected to begin in the fourth quarter of this year subject to approvals.

Most of the company’s mineral resource of 12.88Mt at 1% Li2O (measured and indicated 9.7Mt at 1.03% Li2O) has been converted to proved and probable reserves, which come in at 11.483Mt at 0.64% Li2O, with contained lithia of 72,937t.

 

Source: Stockhead

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