European Lithium mints early-stage US$1.5bn valuation for Wolfsberg

DRA Global, the firm crafting a Definitive Feasibility Study (DFS) for European Lithium’s (ASX:EUR) Austrian Wolfsberg Lithium Project, released an interim pre-tax Net Present Value (NPV) estimate of US$1.5bn on Wednesday. 

The company’s share price was up 4.4% to 8.3c in the second hour of trade. The project is located approximately 250km south of Vienna. 

The NPV is based on DRA’s assessment of the company’s JORC-compliant Mineral Resource Estimate (MRE) for the project, which currently boasts 9.7m tonnes of ore at an average grade of 1% lithium oxide. 

The MRE effectively meets the high-grade classification for lithium as published by investor advisory firm Next Investors. 

The estimate DRA used is composed of both “measured” and “indicated” resource classifications, which both reflect mid-range confidence. 

DRA did not include the “inferred” classification, a lower-confidence read, which otherwise brings the total resource to 10.98Mt of ore at 1% lithium oxide. 

The final version of the DFS is expected to be published before Q2 of the 2023 calendar year. 

Interim finding specifics 

DRA calculates potential for European Lithium to produce 8,800 tonnes per annum (tpa) of lithium hydroxide as a base case.

DRA reached that figure by incorporating in its calculations mechanical and chemical processes based on the results of a pilot plant trial conducted by European Lithium in recent history. 

That 8,800tpa would come from a mining rate of 780,000tpa of ore over the Life of Mine (LOM) at Wolfsberg. The project is expected to run for at least ten years, according to the company’s website.

A Pre-Feasibility Study (PFS) published by European Lithium in the recent past posited a 25.65 pre-tax Internal Rate of Return (IRR). 

Discussions with financiers ongoing

“The robust DFS NPV provides confidence in the commercialisation of the Wolfsberg Project,” company chief Tony Sage said. 

“The DFS NPV update has come during a buoyant market for lithium and an increased urgency for decisive action to accelerate the green energy transition, especially in Europe.”

The Wolfsberg Lithium Project is held in an ownership structure deserving of some explanation. 

European Lithium’s subsidiary European Lithium AT (Investments) recently signed a deal with US-listed Sizzle Acquisition Corp (NASDAQ:SZZL) to come together and form a new company called Critical Metals Corp. 

European Lithium will be the largest shareholder in Critical Metals, to which ownership of Wolfsberg will be transferred. 

Sage wants to see Critical Metals listed on the NASDAQ. In that event, European Lithium is anticipated to retain its tenure on the Australian bourse. 

“Our next steps include finalisation of the listing of Critical Metals on NASDAQ and continuing our discussions with our financiers. Through the business combination with Sizzle, Critical Metals Corp expect to access substantial opportunities available in the US market,” he added. 

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Note: European Lithium retracted the announcement which formed the basis for this story on Wednesday 11th November.