European Lithium Ltd (ASX:EUR, OTCQB:EULIF)’s flagship Wolfberg Lithium Project is set to list on the Nasdaq under the Critical Metals Corp banner, following a binding agreement with special purpose acquisition company (SPAC) Sizzle Acquisitions Corp.
A SPAC or ‘blank check company’, has no commercial operations, but becomes a public company and then acquires, or usually merges with, an existing company, taking it public.
For EUR, this means a quicker and easier run to listing on the Nasdaq than would have occurred had it listed itself.
Should Critical Metals list on the Nasdaq, it will hold an implied pro forma market capitalisation of about US$972 million – some 10 times EUR’s current market cap – with access to about US$159 million cash-in-trust from Sizzle Acquisition Corp.
Critical Metals will own European Lithium’s Wolfsberg Lithium Project in Austria, some 270 kilometres south of Vienna, which is expected to be the first licensed lithium mine in Europe. The project is currently held by European Lithium’s wholly-owned subsidiary, European Lithium AT.
Following shareholder and regulatory approval, Critical Metals will list under the Nasdaq symbol CRML, likely in the first half of 2023.
European Lithium will continue to trade on the ASX as the largest shareholder of Critical Metals, with four of five Critical Metals board members consisting of EUR executives; European Lithium executive chair Tony Sage and CEO Dietrich Wanke will lead the company personally.
Potentially first major lithium source in EU
“We are enthusiastic to partner with the Sizzle team to become a publicly traded company on Nasdaq and are thrilled to have Carolyn Trabuco, Sizzle’s lead independent director, join our board,” Critical Metals executive chair Tony Sage said.
“The need for additional battery-grade lithium in Europe will only continue to accelerate as demand for EVs continues to outstrip supply.
“The project is poised to become the first major source of battery-grade lithium concentrate in Europe, the world’s leading EV market, capable of supporting the production of approximately 200,000 EVs per year.
“The funds raised though this transaction will provide us with the resources anticipated to be required to advance construction and commissioning of the project.
“With the capital raised, in addition to the increased access to the public capital markets by listing on Nasdaq by means of the business combination, we believe we will be able to achieve our commercial goals by 2025.”
In another windfall for EUR, the Biden administration last week granted $3 billion to 20 battery-metals companies, including both industry heavyweights and startups like Lithium Americas Corp (TSX:LAC, NYSE:LAC) and Piedmont Lithium (NASDAQ:PLL) Inc (ASX:PLL, NASDAQ:PLL, XETRA:), with capital available from last year’s infrastructure bill.
Wolfsberg Lithium Project
Critical Metals will use this fresh capital to develop and eventually commission the Wolfsberg Lithium Project, targeting first production in 2025.
A pre-feasibility study (PFS) for the project outlined an annual production rate of about 10,500 metric tonnes of lithium concentrate, enough to build some 200,000 electric vehicles per year.
EUR backed up the PFS with pilot test-work with independent consultants, which also demonstrated the project’s ability to produce battery-grade lithium concentrate at a commercial scale.
A key offtake memorandum of understanding (MoU) with BMW AG has also put wind into Wolfsberg’s sails, as the automotive powerhouse is considering undertaking one of the largest direct OEM pre-pays in the lithium mining industry to date
“Critical Metals is poised to capitalise on significant macroeconomic tailwinds as Europe’s first source of battery-grade lithium,” Sizzle CEO Steve Salis said.
“Backed by accelerating demand for establishing additional capacity for lithium supply in Europe, strategic global partners and a seasoned management team with deep expertise in the mining space, we believe that the project provides a compelling and unique opportunity for US investors to have exposure to the European EV supply chain.”
Wolfsberg boasts three core competitive advantages:
- The first licensed lithium mine in Europe – the project holds an exclusive license to repurpose a former Austrian government constructed lithium mine that contains a substantial amount of battery-grade lithium, minimizing the overall environmental impact of the discovery and processes.
- Key strategic offtake MoU – European Lithium has entered into a MoU for a key customer arrangement with BMW AG, which upon execution of definitive agreements would create one of the largest direct pre-pays from an OEM in Europe in the lithium mining industry of $15 million.
- Definitive feasibility study (DFS) expected in early 2023 – the project is aiming to supply lithium concentrate at commercial scale and be economically viable, as per its completed pre-feasibility study (PFS), with the results of DRA Global’s final definitive feasibility study (DFS) expected in Q1 2023.