European Lithium (ASX:EUR) expects to lodge paperwork with the US Securities and Exchange Commission (SEC) for the NASDAQ listing of Critical Metals Corp as early as next week.
Speaking to Mining.com.au on the sidelines of the International Mining and Resources Conference (IMARC) in Sydney today (3 November), European Lithium Executive Chairman Tony Sage commented that the process was tracking well.
“We did that deal at a valuation of US$750 million and so now the paperwork with the SEC is going to be lodged next week and it takes about 90 days, so in about 90 days’ time we’ll be able to ring the bell on the NASDAQ and list as Critical Minerals Corporation.”
On 26 October, European Lithium entered into a business combination agreement with Sizzle Acquisition Corp, a US special purpose acquisition company listed on NASDAQ (NASDAQ:SZZL). As part of the deal, European Lithium will sell-down its interest in its wholly owned flagship Wolfsberg Lithium Project and merge with Sizzle via a newly formed, lithium exploration and development company named Critical Metals Corp.
Upon the closing of the transaction, European Lithium will be issued US$750 million worth of ordinary shares in Critical Metals, which represents an approximate 80% ownership interest in the combined entity.
Sage told Mining.com.au that European Lithium had met with promoters back in June and that the transaction process has taken about 4 months to come to fruition.
“But the valuer came on board and they said US$750 million was true and fair value for the company”
“The amount of DD (due diligence) that had to be done and the amount of workload that we had to give to them was enormous. Number one for the valuation. Our market cap is only $150 million Australian, let along $750 million US.
“But the valuer came on board and they said US$750 million was true and fair value for the company (Critical Metals Corp).”
Sage also noted that during DD, the Definitive Feasibility Study (DFS) had to be updated, however the recent DFS results have not been released to the market yet.
Under the Sizzle transaction, the implied equity value to be paid for Wolfsberg under the transaction is US$750 million, which represents a significant increase to the current market capitalisation of European Lithium of $151.64 million.
Also, as part of the business combination agreement, the company’s Austrian subsidiary European Lithium AT (Investments) and its subsidiaries, ECM Lithium AT GmbH and ECM Lithium AT Operating GmbH (collectively EUR Austria), which will hold Wolfsberg and a 20% interest in the Weinebene and Eastern Alps Projects prior to the closing, will merge with Sizzle to form Critical Metals Corp.
The transaction is expected to provide the combined group with about US$159 million in capital before expenses to fund the activities of Critical Metals Corp. The expected capital injection positions Critical Metals to progress construction and development at Wolfsberg subject to the findings of the DFS.
The flagship Wolfsberg Lithium Project is a 100% owned advanced hard rock lithium project, strategically located 270km south-west of Vienna, Austria. Wolfsberg is located in the heart of Europe, a central hub during this transitional period toward clean energy solutions.
Located nearby to Wolfsberg are several planned gigafactories which are planned to be built by battery suppliers and some of the Europe’s leading auto makers, seeking to satisfy the growing demand for lithium-ion batteries in the electric vehicle market.
Wolfsberg comprises 54 exploration licences and 11 mining licences covering a total area of 11.33km. The region boasts exceptional local infrastructure, located close to Graz and Klagenfurt airport, and is serviced by nearby railways and highways.
The company has reported total Measured, Indicated, and Inferred Mineral Resources at Wolfsberg at 12.88Mt @ 1.00% Li2O, confirming the potential for Wolfsberg to be a globally significant hard rock lithium project, with the possibility that the size of the Mineral Resource can increase as drilling of different project zones is undertaken in the future.
Write to Adam Orlando at Mining.com.au
Images: European Lithium Ltd