European Lithium Ltd (ASX:EUR, OTCQB:EULIF) has announced that Critical Metals Corp has signed a share subscription facility worth up to US$125 million with GEM Global Yield LLC SCS.
The facility will provide transaction funding to accelerate the development of the Wolfsberg Lithium Project in Austria.
Acceleration for key project
European Lithium and Critical Metals Corp expect to receive an update on additional equity funding in the near future.
Luxembourg-based private alternative investment group GEM Global Yield LLC SCS has agreed to provide Critical Metals Corp with a share subscription facility of up to US$125 million.
Upon the closing of the business combination transaction, Critical Metals Corp will have access to incremental capital through the facility. The company can draw down funds over a three-year period by issuing new shares directly to GEM Global Yield LLC SCS.
Substantial capital
Assuming no further redemptions by public stockholders of Sizzle Acquisition Corp, Critical Metals Corp is expected to have access to around US$175 million in transaction proceeds, which includes the GEM finance package and existing cash reserves.
This substantial capital, combined with European Lithium's agreement with Obeikan Investment Group, will greatly facilitate the advancement of the Wolfsberg Project.
Chairman Tony Sage said: “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.”
Boxes ticked
European Lithium and Critical Metals Corp have already forged a clear path in the development of the Wolfsberg Project.
The project has secured a mining permit and spodumene mined from the project has successfully demonstrated its ability to supply high-purity lithium. In addition, the mineral resource estimate indicates substantial lithium resources available.
The project's economic viability has been confirmed through a definitive feasibility study, which shows a post-tax NPV of US$1.5 billion over a mining period of roughly 15 years.
Not least, European Lithium has secured a binding offtake agreement with a top-tier auto manufacturer and a binding agreement to build a lithium hydroxide processing plant in partnership with Obeikan Investment Group, resulting in expected cost savings.
Pleasingly, the project also shows promise for future expansion, with drilling in Zone 2 indicating additional resource potential.
The company plans to finalise funding for infrastructure requirements, commence construction and conduct resource extension drilling to further increase the mine life.
Nasdaq listing progress
European Lithium is addressing comments received from the Securities and Exchange Commission (SEC) regarding its Nasdaq listing. The company anticipates that once the F-4 is declared effective by the SEC, a shareholding meeting will be convened by the Sizzle Board to seek approval for the transaction. The transaction is progressing through the approval process and is subject to Sizzle shareholder approval.
Once the proposed merger transaction and Nasdaq listing are wrapped up, European Lithium will hold an interest in various projects and investments and will be issued US$750 million worth of ordinary shares in Critical Metals Corp.
Additionally, European Lithium holds shares in Cyclone Metals Ltd (ASX:CLE) and CuFe Ltd (ASX:CUF), along with an equity interest in Tanbreez Mining Greenland A/S. The company also possesses exploration assets in Austria, Western Australia and Ukraine.