By Overview
As the global push to halt climate change gains momentum, the European Commission is looking to regionalize the battery supply chain to capitalize on the rapid electric vehicle (EV) growth and limit its dependency on other countries through heavy investment and policy changes. Europe’s electric vehicle market value reached US$29.49 million in 2021 and is projected to increase up to US$143.08 million by 2027, indicating a compounded annual growth rate of 23.4 percent in that period.
Even though Europe is one of the largest global producers of motor vehicles, it currently does not have a local supply of lithium hydroxide which is heavily used in EV battery technology. According to experts, the market is set to remain in a structural shortage until 2025
One company that aims to become the first local lithium supplier into an integrated European battery supply chain is European Lithium (ASX:EUR,FRA:PF8), a mining exploration and development company focused on exploring, identifying and acquiring lithium in Europe. The company is led by a management team with decades of experience and success in the mining and finance markets.
“Our aim is to be the first supplier of lithium from Europe, for Europe,” European Lithium chairman Tony Sage said.
The company is focused on its wholly owned Wolfsberg Lithium project located in Carinthia, Austria. The pre-existing mine is located in a mining-friendly region with multiple mineral discoveries in the surrounding area. The property features a high-grade lithium resource at an average grade of one percent lithium hydroxide, with a total resource of 12.88 million tonnes based on resources measured, indicated and inferred in zone 1 only.
The Wolfsberg Lithium project resource has the potential to double based on positive drill results in another zone on the property.
Based on the definitive feasibility study (DFS) released in March 2023, Wolfsberg Lithium Project is well positioned to become a leading producer of battery-grade lithium hydroxide in Europe. It is set to deliver high returns, leveraging low operating costs, and benefiting from a lithium market that is anticipated to be in structural undersupply during most of the life of mine. The battery-grade lithium hydroxide monohydrate (LHM) prices modeled in the DFS are projected to be at a 39-percent discount to current spot prices in 2025 and then escalate by 2 percent per annum. The estimated capex is US$866 million which supports a post-tax NPV of US$1.5 billion.
European Lithium has established several strategic relationships with an aim to deliver value to the Wolfsberg Lithium Project through development and during production. This includes a partnership with KMI for liaising with Austrian authorities.
The company commissioned Dorfner Anzaplan to construct the pilot plant, which was successfully completed on schedule. Anzaplan has also overseen the completion of metallurgical test work on bulk ore extractions. Testing will allow significantly higher recovery rates at the start of production as opposed to only assessing metallurgical data from the core as other mining companies often do, giving European Lithium the advantage of a streamline refinement process.
The company has support from the European Battery Alliance, GREENPEG and other government initiatives, believing it has the potential to become a major, first-to-market producer of lithium in Europe. The company also remains committed to clean production in an effort to support sustainability.
Based on the DFS, the company plans to begin the permitting process of its Wolfsberg Lithium project and prepare the mining plan for the mining authority to authorize the mine and concentrator construction. Afterward, the company will determine the approval requirements of the carbonate hydroxide conversion plant with the Energy Information Administration (EIA) and then initiate the final financing plan.
European Lithium, through its wholly owned Austrian subsidiary ECM Lithium Aľ GmbH (ECM), signed a binding long-term lithium offtake agreement with top-tier European auto manufacturer BMW to secure the company’s first offtake of battery grade lithium hydroxide from its Wolfsberg Lithium Project in Austria.
The company is aiming to commence production of lithium hydroxide from the project in 2027 — subject to funding and approvals by the Austrian government.
In a bid to expand its project portfolio, European Lithium executed a binding Heads of Agreement with 2743718 Ontario Inc., a subsidiary of Richmond Minerals (TSXVRMD), to acquire 100 percent of the rights, title and interest in the Bretstein-Lachtal Project, Klementkogel Project and the Wildbachgraben Project, a group of exploration licenses covering 114.6 square kilometers, targeting lithium with known occurrences in the Styria mining district of Austria.
Company Highlights
European Lithium is a mining exploration and development company focused on exploring, identifying and acquiring lithium in Europe.The company aims to become the first local lithium supplier into an integrated European battery supply chain.The company’s focus is on its wholly owned advanced Wolfsberg Lithium Project (Wolfsberg) located in Carinthia, Austria.Wolfsberg is a high-grade lithium resource at an average grade of one percent lithium oxide, with a total resource of 12.88 million tonnes based on measured, indicated and inferred resources in zone one only.Wolfsberg’s definitive feasibility study results demonstrate potential to deliver high returns, leveraging low operating costs, and benefiting from a lithium market that is anticipated to be in structural undersupply during most of the life of mine.The Wolfsberg resource estimate has significant upside with the potential to double based on positive drill results.The company has signed a binding agreement to build a Saudi Arabia-based hydroxide processing plant in partnership with Obeikan and deliver significant cost savings.The company is led by a management team with decades of experience and success in the mining and finance markets.European Lithium entered into a business combination agreement with Sizzle Acquisition, a US special purpose acquisition company, to which European Lithium will sell down its interest in its wholly owned Wolfsberg Lithium Project (Wolfsberg and Wolfsberg Lithium Project) and merge with Sizzle via a newly formed, lithium exploration and development company named, Critical Metals Corp.European Lithium has acquired 100 percent of the rights, title and interest in the Bretstein-Lachtal Project, Klementkogel Project and the Wildbachgraben Project, a group of exploration licenses covering 114.6 square kilometers, targeting lithium with known occurrences in the Styria mining district of Austria and nearby the Wolfsberg Lithium ProjectThe company received high-grade lithium assays from sampling undertaken at various prospects within the Eastern Alps Lithium Satellite Projects, located in Austria, which are held 20 percent by European Lithium and 80 percent by EV Resources Limited (ASX: EVR).
Key Project
Wolfsberg Lithium Project
The Wolfsberg Lithium Project is a high-grade lithium project located in Carinthia in Austria. The project is 20 kilometers east of the town of Wolfsberg which is an industrial town with established infrastructure and sources of energy in place. European Lithium has a total of 54 exploration licenses, covering its two identified zones and mining licenses that may be permanently issued if conditions are met. The company recently secured additional mining licenses and extensions that grow the Wolfsberg project area to a total of 20 licenses over two mining fields, the original Andreas and new Barbara mining fields.
The property is an existing, developed exploration mine with substantial exploration and development work completed by previous owners. These projects were backed by the Austrian government and included extensive metallurgical testing, geological mapping, mining, and pre-feasibility studies in the 1980s.
The company completed its own positive PFS as well as an extensive assessment. The property features a high-grade lithium resource with an average of one percent lithium hydroxide. Additionally, it features a total measured, indicated, inferred and JORC-compliant resource of 12.88 million tonnes of lithium hydroxide in zone one only.
In 2023, European Lithium released the results of its definitive feasibility study (DFS) for the Wolfsberg Lithium Project, demonstrating potential high returns, leveraging low operating costs, and benefiting from a lithium market which is anticipated to be in structural undersupply during most of the life of mine.
DFS highlights:
Battery-grade lithium hydroxide monohydrate (LHM) production is ~8,800 tpa for 14.6 years;LHM opex (after byproducts) is US$17,016/t LHM on average compared to reported spot prices for LHM in February 2023 of US$79,500 DDP Antwerp;LHM prices modelled in the DFS are projected to be at a 39-percent discount to current spot prices in 2025 and then escalate by 2 percent per annum;Estimated capex is US$866 million which supports a post-tax NPV of US$1.5 billion @ weighted average cost of capital (WACC) 6 percent (WACC is determined by the split of debt and equity related to the BMW offtake agreement);Acceleration of decarbonization and energy transition in Europe combined with the rapid adoption of electric vehicles provides further upside.
Positive drill results from the 2018 drilling program confirm that zone two on the property could mirror zone one, which would double the project resource. Drilling on the property also revealed grades as high as 2.49 percent of lithium hydroxide.
European Lithium entered into a business combination agreement with Sizzle Acquisition Corp.(NASDAQ:SZZL), a US special purpose acquisition company, to which European Lithium will sell-down its interest in its wholly owned Wolfsberg Lithium Project (Wolfsberg and Wolfsberg Lithium Project) and merge with Sizzle via a newly formed, lithium exploration and development company named, Critical Metals Corp. European Lithium will be issued US$750 million worth of ordinary shares in Critical Metals, equivalent to approximately 80 percent of the ordinary shares in Critical Metals.
Once the business combination is completed, European Lithium will focus its activities on its existing portfolio of projects and investments, including the newly acquired Austrian Lithium Projects, consisting of 245 exploration licenses covering a total area of 114.6 square kilometers located approximately 70 kilometers north of the company’s Wolfsberg Lithium Project. The licenses cover ground that is considered prospective for lithium occurrences and initial surface sampling showing 3.98 percent lithium oxide.
The following summarizes the company’s interest in projects and investments:
CRML – As outlined above, the company will be issued US$750 million worth of ordinary shares in CRML upon closing of the transaction. Listed investments – The company holds: 1,180,256,849 shares (representing 11.5 percent interest) in Cyclone Metals (ASX: CLE). CLE has recently acquired 100 percent of the Block 103 magnetite iron ore project located in the Labrador trough region of Canada.15 million shares in Cufe Ltd (ASX: CUF). Unlisted investments – European Lithium holds a 7.5-percent equity interest in Tanbreez Mining Greenland A/S, which holds an exploitation permit for rare earths in Greenland.Exploration assets – European Lithium has an interest in: Austrian Lithium Project –100 percent of the rights, title and interest in the Bretstein-Lachtal, Klementkogel and Wildbachgraben projects covering an area of 114.6 square kilometers in total, which are prospective for lithium in Austria. Ukraine Projects – On 28 February 2023, the company announced that it had renegotiated the terms under which EUR will acquire European Lithium Ukraine LLC (European Lithium Ukraine), a Ukraine-incorporated company applying (through either court proceedings, public auction and/or production sharing agreement with the Ukraine Government) for 20-year special permits for the extraction and production of lithium at the Shevchenkivske Project and Dobra Project in Ukraine. On 28 February 2023, the company announced the end date to complete the acquisition has been extended to 2 November 2025.
In addition to the above, the company continues to review project opportunities in the mineral exploration area as part of its growth strategy.
Management Team
Dietrich Wanke – Chief Executive Officer
Dietrich Wanke has more than 30 years of experience in management at the operational level for underground and open-cut mines. Wanke has held statutory positions as registered manager under the applicable mining acts in several countries and commodities, most notably gold, silver, nickel, diamonds, coal, and iron. He has lived and served professionally for mining operations in Germany, Australia, Indonesia, Papua New Guinea, and Sierra Leone. Wanke has managed mining operations through all phases, starting from greenfield exploration to full-scale production, as well as the extension of existing mines. Wanke currently holds a position as general manager for Marampa Iron Ore in Sierra Leone. He’s worked in the past as general manager for Tolukuma Gold Mines in Papua New Guinea, mine manager for Atlas Iron in Western Australia, technical services manager for Thiess in Indonesia. Wanke served as mine manager for Kimberley Diamonds in Western Australia, technical services manager for Lightning Nickel in Western Australia, technical director for LMV, an engineering and surveying service provider for coal mines in Germany, technical services manager, and licensed surveyor for Laubag in Germany. Wanke holds a mine engineering/mine surveying degree from Technical University Bergakademie Freiberg, a licensed mine surveyor’s certificate in Germany and first class mine manager’s certificates in Western Australia and Papua New Guinea.
Melissa Chapman – CFO and Company Secretary
Melissa Chapman is a certified practicing accountant with over 14 years of experience in the mining industry. She has worked extensively in Australia and the United Kingdom, including five years as group financial controller for the Beny Steinmetz Group. Chapman has a bachelor of accounting from Murdoch University and has been a member of CPA Australia since 2000. Chapman has completed a graduate diploma in corporate governance with Chartered Secretaries of Australia.
Tony Sage – Chairman
Tony Sage has more than 35 years of experience in corporate advisory services, funds management, and capital raising, predominantly within the resource sector. Sage is based in Western Australia and has been involved in the management and financing of listed mining companies for the last 22 years. Sage has operated in Argentina, Brazil, Peru, Romania, Russia, Sierra Leone, Guinea, Côte d’Ivoire, Congo, South Africa, Indonesia, China, and Australia. He currently holds the positions of executive chairman of ASX-listed Fe and executive director of ASX-listed Cyclone Metals.
Malcolm Day – Director
Malcolm Day holds a Bachelor’s of applied science degree in surveying and mapping. Day commenced his career working in the civil construction industry for 10 years, six of which were spent in senior management as a licensed surveyor and then later as a civil engineer. Whilst working as a surveyor, Day spent three years conducting mining and exploration surveys in remote Western Australia. He is a member of the Australian Institute of Company Directors. Day is the managing director of Delecta (ASX:DLC).
Michael Carter – Non-executive Director
Michael Carter graduated from the University of Western Australia in 1998 with a bachelor of commerce degree, majoring in accounting and finance. Carter also completed a graduate diploma in applied finance and investment at Finsia in 2002. He is experienced in structuring corporate transactions, focusing on junior resource companies, and has also worked in ongoing corporate advisory roles with numerous ASX-listed entities over the last 18 years. Carter has been employed as a stockbroker since 1999, previously served as a director of Indian Ocean Capita’ and is currently an associate director of CPS Capital.