Europe’s first fully licensed Lithium Mine to go Public
European Lithium AT (Investments) Limited, a wholly owned subsidiary of European Lithium Ltd, and Sizzle Acquisition Corp, a publicly traded special purpose acquisition company, today announced that they have entered into a definitive agreement for a business combination that will result in the formation of Critical Metals Corp, which is expected to be a leading lithium mining company.
Upon closing, subject to approval by European Lithium and Sizzle stockholders and other customary requirements, Critical Metals intends to be listed on Nasdaq under the symbol “CRML,” which is expected to occur in the first half of 2023.
Upon closing of the business combination, Critical Metals will own European Lithium’s Wolfsberg Lithium Project, which is currently owned by European Lithium’s wholly owned subsidiary, European Lithium AT (Investments) Limited, as well as a 20% interest in additional Austrian projects currently held by European Lithium. European Lithium will be the largest shareholder of Critical Metals and is expected to continue to trade on the Australian Securities Exchange. The board of Critical Metals is expected to comprise a total of 5 members, 4 of whom will be nominees of European Lithium and 1 of whom will be a nominee of Sizzle. Critical Metals will be led by Executive Chairman, Tony Sage, and Chief Executive Officer, Dietrich Wanke.
In order to support the rapidly growing EV supply chain in Europe, the Project is expected to become the region’s first major source of battery-grade lithium concentrate, filling a critical gap in the European EV battery supply chain. Located in Wolfsberg, Austria, in the heart of this supply chain, the Project is expected to be uniquely positioned to capitalize on three key competitive differentiators:
- The First Licensed Lithium Mine in Europe –the Project holds an exclusive license to repurpose a former Austrian government constructed lithium mine that contains a substantial amount of battery-grade lithium, minimizing the overall environmental impact of the discovery and processes.
- Key Strategic Offtake MOU – European Lithium has entered into a MOU for a key customer arrangement with BMW AG, which upon execution of definitive agreements would create one of the largest direct pre-pays from an OEM in Europe in the lithium mining industry of $15 million.
- Definitive Feasibility Study (DFS) Expected in Early 2023 – the Project is aiming to supply lithium concentrate at commercial scale and be economically viable, as per its completed pre-feasibility study (PFS), with the results of DRA Global’s final definitive feasibility study (DFS) expected in Q1 2023.
Backed by considerable legislative support worldwide for cleaner transportation, automakers and battery manufacturers continue to ramp up production of electric vehicles (EVs) to meet overwhelming consumer demand, creating a critical need for additional sources of battery-grade lithium – an essential material for EV batteries.
Through its pilot plant constructed by independent consultants Dorfner Anzaplan in Austria, European Lithium previously demonstrated the Project’s expected ability to supply battery-grade lithium concentrate through the processing of spodumene. The results from the pilot plant demonstrated that the Project can supply battery-grade lithium at 99.6% of lithium carbonate grade.
Management Commentary
“We are enthusiastic to partner with the Sizzle team to become a publicly traded company on Nasdaq and are thrilled to have Carolyn Trabuco, Sizzle’s lead independent director, join our board,” said Critical Metals Executive Chairman, Tony Sage. “The need for additional battery-grade lithium in Europe will only continue to accelerate as demand for EVs continues to outstrip supply. The Project is poised to become the first major source of battery-grade lithium concentrate in Europe, the world’s leading EV market, capable of supporting the production of approximately 200,000 EVs per year. The funds raised though this transaction will provide us with the resources anticipated to be required to advance construction and commissioning of the Project. With the capital raised, in addition to the increased access to the public capital markets by listing on Nasdaq by means of the business combination, we believe we will be able to achieve our commercial goals by 2025.”
“Critical Metals is poised to capitalize on significant macroeconomic tailwinds as Europe’s first source of battery-grade lithium,” commented Steve Salis, CEO of Sizzle. “Backed by accelerating demand for establishing additional capacity for lithium supply in Europe, strategic global partners, and a seasoned management team with deep expertise in the mining space, we believe that the Project provides a compelling and unique opportunity for U.S. investors to have exposure to the European EV supply chain.”
“The team at Critical Metals has made significant progress advancing Europe’s first licensed lithium mine and is well positioned to be the largest supplier of battery-grade lithium in the region,” added Vice Chairman of Sizzle, Jamie Karson. “We are pleased to partner with Tony, Dietrich and the rest of the excellent management team as Critical Metals becomes a publicly traded company in the U.S. As reinforced by Critical Metals’ expected strategic arrangement with BMW AG, we believe the Project will play a key role in further accelerating EV adoption in Europe.”
Key Investment Highlights
- Large and Growing Demand for Lithium-ion Batteries – while lacking domestic supply sources for battery raw materials, Europe has proven to be an early adopter of EVs, and a global leader in the EV revolution. The Project is expected to provide Europe with the supply it does not currently have.
- Europe’s First Licensed Lithium Spodumene Mine – mine initially built by the Austrian government successfully demonstrated its capability to supply high purity lithium (99.6% lithium carbonate equivalent) at pilot plant.
- Economic Viability with PFS Completed and DFS Underway – Project is expected to be well positioned to supply approximately 10,500 metric tons of battery-grade lithium concentrate per year starting in 2025 from Zone 1. Positive drilling results confirm Zone 2, an exploration target, could mirror Zone 1, doubling the Project’s resource.
- Leverages Existing Infrastructure – existing exploration mine in central Europe, 270km SW of Vienna, close to Graz and Klagenfurt airport, as well as railway and highway access, which is expected to reduce capital requirements to complete development of the Project.
- Leading Domestic Offtake MOU with BMW AG – key strategic off-take arrangement with BMW AG to supply 100% of the Project’s Zone 1 lithium product, including a $15 million pre-payment; binding agreement expected to be finalized in Q4 2022.
- Advanced Project Mine Life – Project expected to supply battery-grade lithium concentrate for more than 20 years, establishing a critical fully integrated lithium supplier for the European EV industry.
Transaction Overview
The Proposed Transaction values the combined entity at an implied pro forma enterprise value of approximately $838 million, and at an implied pro forma market capitalization of approximately $972 million. The implied pre-money equity value is $750 million. The transaction is expected to provide approximately $159 million in capital before transaction expenses and the impact of redemptions by the public stockholders of Sizzle. European Lithium will roll 100% of its existing equity in European Lithium AT (Investments) Limited into the combined entity, retaining approximately 80% of the combined company’s pro forma equity before the impact of redemptions or any additional capital raised.
The Boards of Directors of each of European Lithium and Sizzle have unanimously approved the transaction. The transaction will require the approval of European Lithium and Sizzle stockholders and is subject to other customary closing conditions. It is currently expected that the transaction will close in the first half of 2023.
Additional information about the proposed transaction consisting of, among other things, a newly released video of the Project will be available on the Critical Metals website.
Advisors
Jett Capital Advisors, LLC is acting as exclusive financial advisor to European Lithium; White & Case LLP is acting as U.S. legal advisor to European Lithium. Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, is acting as exclusive financial advisor and exclusive capital markets advisor to Sizzle; Ellenoff, Grossman & Schole LLP is acting as legal advisor to Sizzle.
