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. The European EV segment of the auto market has doubled from 5.7 percent to 11.9 percent in 2020 alone, despite the pandemic.
Even though Europe is one of the largest global producers of motor vehicles, it does not have a local supply of lithium hydroxide which is heavily used in EV battery technology. As a result, the European Commission has backed support into lithium production. According to experts, the market is set to move into a structural deficit of lithium from 2025 onwards as demand for lithium outpaces supply.
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’s sole focus is 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 10.98 million tonnes based on resources measured, indicated, and inferred.
The Wolfsberg Lithium project resource has the potential to double based on positive drill results in another zone on the property. The property has the potential to deliver total revenue upwards of US$1.6 billion based on the pre-feasibility study (PFS).
The net present value (NPV) of the resource is US$339.4 million based on the PFS but is expected to increase upon the results of the detailed definitive feasibility study (DFS). In April 2022, the NPV increased to AU$862 million, based on measured and indicated resources of 9.7 million tonnes at one percent lithium oxide. Additionally, the company believes it can also extend the mine life beyond its current 10 years of estimated life up to 12 to 15 years to support value creation.
European Lithium seeks to increase shareholder value through several strategic partnerships aimed at fast-tracking the development of its Wolfsberg Lithium project. This includes a partnership with KMI for liaising with Austrian authorities.
The company has commissioned Dorfner Anzaplan with the construction of the pilot plant, which it has already completed on schedule. Anzaplan is also overseeing the completion of metallurgical test work on bulk ore extractions.
This testing has had 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, which has allowed European Lithium to successfully streamline the refinement process.
The company has support from the European Battery Alliance 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 definitive feasibility study (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.
In April 2022, the NPV increased to AU$862 million, based on measured and indicated resources of 9.7 million tonnes at one percent lithium oxide. It issued an AU$30 million placement through shares at AU$0.13 per share.
Currently, there are advanced-stage discussions regarding offtake agreements as well as discussions with several European institutions to progress project financing. The company is aiming to commence lithium hydroxide production at the project by the end of 2023 or early 2024 — subject to funding and approvals by the Austrian government.
Company Highlights
- European Lithium (ASX:EUR,FRA:PF8) 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 sole focus is on its wholly-owned advanced Wolfsberg Lithium project located in Carinthia, Austria.
- Wolfsbert is a high-grade lithium resource at an average grade of one percent lithium oxide (Li2O), with a total resource of 10.98 million tonnes based on measured, indicated, and inferred resources.
- The Wolfsberg Lithium project resource estimate is anticipated to double based on positive drill results with production set for 2023.
- European Lithium is supported by various strategic partnerships including Dorfner Anzaplan, KMI, and the European Battery Alliance.
- The company is led by a management team with decades of experience and success in the mining and finance markets.
- EVR has announced the appointment of Austrian geological consultants, GEO Unterweissacher (GmbH), to advise on their exploration strategy.
- European Lithium entered into a business combination agreement with Sizzle Acquisition Corp.(NASDAQ:SZZL), a US special purpose acquisition company, to which EUR will sell-down its interest in its wholly owned Wolfsberg Lithium Project (Wolfsberg and Wolfsberg Lithium Project) and merge with Sizzle via a newlyformed, lithium exploration and development company named “Critical Metals Corp.”
- EUR signed a non-binding memorandum of understanding (MoU) with European auto manufacturer BMW AG (BMW) to secure EUR’s first offtake of battery grade Lithium Hydroxide (LiOH).
- The 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, extended until the end of 2024, covering its two identified zones as well as a mining license that may be permanently issued if conditions are met.
The property is an existing exploration mine with substantial exploration and development work completed by previous owners. These projects were backed by the Austrian government and include extensive metallurgical testing, geological mapping, mining, and pre-feasibility studies in the 1980s.
The company recently 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 10.98 million tonnes of lithium hydroxide in zone one.
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. DFS and resource extension drilling is currently underway, with recent news increasing NPV of the resource from US$339.4 million to AU$862 million, based on measured and indicated resources of 9.7 million tonnes at one percent lithium oxide.
Per the company’s projections, the value increases as DRS work proceeds.Additionally, the company believes it can also extend the mine life beyond its current 10 years of estimated life up to 12 to 15 years to support value creation. Lithium hydroxide production is anticipated to begin by the end of 2023 or early 2024, pursuant to funding and loosened pandemic restrictions.
European Lithium entered into a business combination agreement with Sizzle Acquisition Corp.(NASDAQ:SZZL), a US special purpose acquisition company, to which EUR will sell-down its interest in its wholly owned Wolfsberg Lithium Project (Wolfsberg and Wolfsberg Lithium Project) and merge with Sizzle via a newlyformed, lithium exploration and development company named “Critical Metals Corp.” EUR 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. Transaction is expected to provide combined group with approximately US$1 59 million in capital before expenses to fund the activities of Critical Metals.
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 & 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 of 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 – Director
Michael Carter graduated from the University of Western Australia in 1998 with a bachelor’s 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.