- The Wolfsberg project could potentially be one of the first operating lithium mines in Europe
- EUR is trading well below its see through asset backing of $0.80/sh
- The company also holds 7.5% of the Tranbreez REE deposit, an asset with potential value of US$3bn gross
Special Report: European Lithium’s critical mineral projects in the EU have considerable potential to increase market value and make it a leader in European lithium production, according to a new report from Martin Place Securities.
European Lithium (ASX:EUR) has developed a valuable portfolio of key critical mineral projects in Europe that are well placed to participate in the EU’s clean energy transition, given there is no mining operation for lithium chemicals currently in place on the continent.
The company’s key asset is the smaller scale 8,800tpa lithium hydroxide monohydrate (LHM) Wolfsberg project in Austria, poised to become the first European Union producer of battery-grade lithium.
Wolfsberg has a 12.9Mt @ 1% Li2O resource, a mining permit, a DFS highlighting its economic viability and a binding offtake agreement with top-tier car manufacturer BMW.
It is subject to a transaction with Sizzle Acquisition Corp (NASDAQ:SZZL) which is expected to unlock further value.
Under the deal, European Lithium wholly owned subsidiary European Lithium AT, which holds 100% of Wolfsberg, will merge with Sizzle to form Critical Metals Corp (CRML).
Once this is completed, European Lithium will be issued with US$750m worth of shares in CRML, which also grants it a majority stake in the new company.
Nasdaq listing to drive higher market value
With EUR’s market capitalisation currently sitting at $117m, Martin Place Securities analysts say the company is trading well below its see-through asset backing of $0.80 per share.
The report says the NASDAQ listing is expected to drive a much higher market valuation for the company at $0.61 per share with a value target of $0.58 per share set for EUR by the end of 2025.
But while Wolfsberg is set to deliver a step-change in the company’s valuation, it is by no means the only project in its portfolio.
“EUR is also seeking access to the largest lithium resource in Ukraine, which potentially has Europe’s largest hard rock lithium resources,” the report says.
“The EU-Ukraine Strategic partnership on Critical Raw Materials could sponsor this development of the Shevchenkivskyi and Dobra deposits in Ukraine post hostilities.”
Both projects are currently the subject of applications for 20-year special permits for the extraction and production of lithium.
Tranbreez “the world’s largest REE deposit”
EUR’s portfolio also includes much more than just lithium, with the company holding a 7.5% stake in the Tanbreez project in Greenland, described by Martin Place Securities analysts as “the world’s largest” rare earth element (REE) deposits with a 4.7Bt multi-element resource.
Tanbreez is a fully permitted large tonnage mining project in south Greenland with exposure to three major products including eudialyte (soluable REE, zirconium, and tantalum), arfvedsonite, and feldspar.
The report says the project, positioned to unlock rare earth supply as a low cost from non-Chinese producer for North American and European supply, is likely to aim for a NASDAQ listing in 2025 to fund its development.
This investment could yield a pass-through value potential of more than A$0.20 per share, further enhancing EUR’s asset base.
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.