EUR is the largest shareholder of Critical Metals Corp, with an 82% interest, and continues to be listed on the ASX as a mining exploration company. Pic via Getty Images
Mining
Special Report: With a market cap of just under $US1 billion and early Nasdaq trading success under Critical Metals Corp’s (CRML) belt, Martin Place Securities’ Barry Dawes says EUR’s true value is yet to be reflected in its share price.
The marriage of Tony Sage’s European Lithium (ASX:EUR) with acquisition company Sizzle Corp to form and list Critical Metals Corp on the American Stock Exchange is set to drive EUR’s equity stake to $1.3bn, according to Dawes.
After springing to life on the NASDAQ earlier this month, CRML’s share price surged 26%, closing at US$13.03 last week with some US$1m worth of shares changing hands during that period.
That was enough to value EUR shares at least five times higher than current levels, Dawes said, which sits around $0.069 at the time of writing.
From his point of view, the pass-through value of the CRML shares to EUR should represent ~$0.75 fully diluted, taking EUR’s majority stake in CRML to $1.3bn.
The successful listing underscored the emerging appetite possessed by US investors for critical mineral assets despite the current malaise faced by the lithium market.
It also allows EUR shareholders to retain a large interest in the Wolfsberg project, which has become Europe’s first fully permitted lithium deposit with a resource of 12.9Mt @ 1% Li2O. The project is attached to a binding offtake agreement with BMW.
EUR also signed a binding deal with the Saudi Arabian Obeikan Group for the joint development and operation of a hydroxide processing plant in June of last year.
“We are now finalising the deal with the Saudi JV,” Sage told Stockhead.
“After that, we will commence financing and hope to start construction in 2025 Q2.”
The benefits of being a US listed company are significant if you look at listings such as Sigma Lithium (NASDAQ:SGML) and Lithium Americas (NYSE:LAC) who have transformed into significantly better supported equities.
Critical minerals projects may find an edge on the US market due to a less populated class of peers – as opposed to the ASX which is buoyant with explorers, developers and producers with exposure to lithium, nickel and more.
As well, the larger size of the Nasdaq exchange potentially provides a deeper pool of capital for listed companies looking to access funds for their projects at, or close to production.
Sage said the Nasdaq listing was a “huge achievement” for the business and opened new opportunities for the long-term growth of Wolfsberg due to the company’s strong valuation and the budding relationships afforded by the US market.
As well, with less peers on the Nasdaq possessing projects comparable to Wolfsberg’s value than of those placed on the ASX, Sage felt the strong valuation afforded by the US market was more suited to the project’s calculated worth than seen on the Australian market.
“We now have Wolfsberg valued by the US market close to its NPV,” he said.
“Those allow us to leverage our balance sheet in many ways – acquiring new assets using equity and obtaining finance more easily.”
This year, Sage and his team have had their sights set on securing a final mining decree for Wolfsberg, part of the grander scheme to reach operational readiness and the construction of mining facilities.
EUR has held a particular bullishness on the project for quite some time for the well-placed location of Wolfsberg – sitting in pole position to feed into Europe’s burgeoning electric vehicle industry.
European lobby group Transport & Environment believe the continent’s technological advancements will pave the way to more affordable EVs whilst governments seek to bolster EV sales to at least 80% of all automotive sales by 2035.
Since Critical Metals Corp made its entrance to the US market, Sage said its share price was keeping pace.
“It has performed very well,” he said.
“After 2 weeks of trading, the market cap has not fallen below $AUD1 billion.”
Another positive move for the company is the settlement between APL and Okewood Pty Ltd, which has resulted in EUR shares and options being returned to Okewood, in which Tony Sage is a director.
“It’s great news that a settlement was reached between Okewood and the APL which has returned control of the EUR shares, performance shares and options back to Okewood,” Sage said.
For now, Sage is eager to push Wolfsberg along while he explained EUR is open to new opportunities.
“We have two fantastic lithium assets we will work on, the assets surrounding the Wolfsberg project in Austria and the Ukrainian assets,” he said.
“But yes, we are open to other assets.
“For now, we want to educate the greater market on what the value of Critical Metals Corp means for both itself and European Lithium. It is an education process as this has not been done before – this is what we’re trying to explain to the market.
“We are trail blazers if you like.”
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.
