European Lithium Ltd (ASX:EUR, OTCQB:EULIF) has agreed to sell a non-core asset in Western Australia’s northwest as it hones its focus on Europe’s burgeoning battery metals industry.
Under a binding deal with Moosh Moosh Ltd, the lithium stock will snap up A$1 million in cash or ASX company shares in exchange for 100% of its E47/4144 exploration tenement.
EUR will also retain exposure to any minerals extracted thanks to a 1% net smelter royalty.
European Lithium chairman Tony Sage said: “The sale of our non-core Australian tenement aligns with our strategy to focus our attention on securing battery commodities for Europe’s green energy transition.”
The fine print
EUR and Moosh hope to dot the I’s and cross the T’s on their deal towards the end of September, provided the buyer meets all conditions precedent.
Both parties are expected to complete due diligence before the agreement is finalised, with Moosh expected to pay European Lithium A$100,000 for maintaining the tenements over the due diligence period.
Building Europe’s lithium powerhouse
Ultimately, European Lithium’s WA tenement sale frees the company up to focus on its cornerstone battery mineral endeavours.
The explorer and project developer is advancing its wholly-owned Wolfsberg Project in Austria, where it’s working to be the first and largest local lithium supplier in Europe’s integrated battery supply chain.
Lithium is at the heart of the battery metals industry — the commodity is a crucial component of the lithium-ion batteries that power high-performance electric vehicles and other green energy solutions.
According to the European Environment Agency, the number of EVs in Europe is growing every year, making up just under a quarter of all new car registrations in 2022.
As uptake continues to skyrocket, Europe is invested in building a local supply chain that meets its manufacturing needs, solidifying the continent’s position as a leader in the global EV market.
Where does Wolfsberg come in?
EUR’s Wolfsberg asset is foundational to its European lithium vision and it’s poised to play a key role in the local energy revolution.
The project — home to 12.88 million tonnes of measured, indicated and inferred resources — holds a mining permit and was proven to be economically viable in a March definitive feasibility study, which estimated a post-tax net present value of US$1.5 billion.
Of course, Wolfsberg isn’t EUR’s only asset in Austria. Back in late June, the lithium stock picked up three new exploration projects within the famed Styria mining district.
Exploration licences cover 114.6 square kilometres on the underloved Bretstein-Lachtal, Klementkogel and Wildbachgraben assets, giving EUR plenty of room to move as it follows up strong sampling results like 3.98% lithium oxide.
The new projects are just a stone’s throw from the flagship Wolfsberg camp, and EUR plans to kick off initial works at the Bretstein-Lachtal project with stakeholder engagement, mapping, sampling and drill target definition.
A global perspective
Beyond its Austrian interests, European Lithium is building its exposure to other valuable exploration and development assets.
In February this year, the company announced it had renegotiated terms to acquire a Ukraine-incorporated company, which is applying for 20-year special permits to extract and produce lithium at the Shevchenkivske and Dobra projects in Ukraine.
And over in Western Australia, the company has a 50% stake in John Wally Resources Pty Ltd, which has been granted two tenements — E47/4534 and E47/4532.
John Wally has thrown its hat in the ring for other tenements in Western Australia, and these applications are currently pending.
Although Wolfsberg remains the priority, EUR is dedicated to reviewing new project opportunities that support its broader growth strategy.
In terms of investments, European Lithium holds an 11.5% interest in fellow ASX-lister Cyclone Metals Ltd (ASX:CLE) and 150 million shares in iron ore stock CuFe Ltd (ASX:CUF).
The company also holds a 7.5% stake in Tanbreez Mining Greenland A/S, which holds an exploitation permit for rare earths in Greenland.