Critical Minerals Limited, the US business arm of European Lithium Ltd (ASX:EUR, OTCQB:EULIF), is about to undergo a technical breakout in its share price that underscores its emerging status as a leading US-based critical minerals company, according to independent research from Martin Place Securities (MPS).
Key moments
Executive chair and mining expert Barry Dawes laid out what he sees as the trajectory following several key moments in the company’s journey.
The research described the acquisition of the world-renowned Tanbreez rare earth elements (REE) deposit as ‘a masterstroke’ that positions CRML as a formidable player in the sector.
The Tanbreez deposit in Greenland is among the world's largest REE resources, with 28.2 million tonnes of total rare earth oxides (TREO), considerably surpassing other global deposits: "All other REE deposits just pale into insignificance against Tanbreez," the MPS report said.
Saudi play
Additionally, CRML is in negotiations for a lithium refinery in Saudi Arabia, in partnership with Obeikan Investment Group.
The MPS report highlights the benefits of Saudi Arabia's industrialisation program, which offers ultra-low electricity costs of less than US$0.048 per kilowatt-hour (kWh).
CRML's financial position is bolstered by US$15 million in prepaid lithium supply funds from BMW, enhancing its capacity to pursue further developments.
European Lithium (EUR) is also poised to benefit, as it acquires the high-grade Leinster Lithium Project in Ireland for US$10 million, paid with 1.23 million CRML shares.
EUR's market capitalisation stands at approximately A$68 million, based on 1.398 billion shares at A$0.049 each.
The research values the market price per share at A$0.67, with an appraised value of A$1.14, reflecting substantial growth potential.
Low energy costs; good infrastructure
The joint venture with Obeikan Investment Group aligns with Saudi Vision 2030, aiming to diversify the economy and reduce oil dependency.
The MPS report highlights the incentives offered by Saudi Arabia, including 75% debt funding for capital expenditure and low energy costs, noting: "These are far cheaper than European costs of >€0.20/kWh (US$21.6/kWh)."
What’s more, robust infrastructure supports Saudi Arabia’s industrial growth, including roads, railways, seaports and airports.
"The installed infrastructure of power and utilities extends across the Kingdom and offers internationally attractive costs structures," the report notes.
Europe too
This is all before you consider the European assets at the company’s disposal. The Leinster Lithium Project in Ireland, acquired by EUR, is just south of Dublin and spans 761 square kilometres.
Significant lithium-bearing spodumene pegmatites have been picked out by the company through surface sampling and diamond drilling.
CRML closed at US$11.53, breaking a three-month downtrend. The report concludes that CRML is now being re-rated, reflecting the company's strategic acquisitions and market positioning.
Dawes said EUR was set to benefit from CRML's robust balance sheet and strategic positioning in the lithium and REE markets, paving the way for a continued upward trajectory characterised by strategic global acquisitions in the critical minerals space.