EUR’s resource upgrade a big plus ahead of Wolfsberg BFS

European Lithium has ramped up the higher confidence measured and indicated resource at its Wolfsberg project by nearly 54% to 9.7 million tonnes at 1.03% lithium oxide.

This is based on the drilling of 20 infill holes – results of which also support the geological model and vein continuity along strike and at depth.

European Lithium (ASX:EUR) has also agreed to buy back a legacy €1.50 royalty per tonne over the project, which is expected to improve economics when it enters the project.

Work is also continuing on the upgrade to broader inferred resources at the project.

“It’s fantastic that the company has reached another milestone by significantly increasing the resource at Wolfsberg,” non-executive chairman Tony Sage said.

“This and buying back the royalty are major positives for the company in progressing with the DFS for Wolfsberg.

“This will see EUR taking advantage of the recent tremendous growth in the hydroxide price.”

Seaborne lithium hydroxide prices hit US$28-US$30 per kilogram last Thursday, up US$2/kg from a week before on increased optimism for lithium iron phosphate (LFP) batteries, according to Fastmarkets.

This optimism is best highlighted by electric car manufacturer Tesla contracting China’s Ganfeng Lithium for the supply of LFP batteries from 1 January 2022 to 31 December 2024, in line with its decision to move from nickel-cobalt-aluminium batteries to LFP batteries for its standard range vehicles.

Wolfsberg Lithium Project

The Wolfsberg project is located 270km south of Vienna in Carinthia and just 20km east of its namesake industrial town, which is well serviced by established infrastructure including access to the European motorway and rail network.

Its location makes Wolfsberg ideally suited to fulfill Europe’s growing appetite for battery metals as adoption of electric vehicles and zero emissions energy gains traction.

The 2018 pre-feasibility study had outlined a project capable of producing 10,129tpa of lithium hydroxide for battery makers with an NPV of $441.9 million.

There is a strong likelihood that this might be improved on given that this was based on the previous measured and indicated resource of 6.3Mt at 1.17% lithium oxide.

This article was developed in collaboration with European Lithium, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.