European Lithium Limited has bolstered its cash reserves with over A$300 million from share sales in Critical Metals Corp, while delivering promising high-grade rare earth drilling results at its Greenland Tanbreez Project.
- Raised A$184.6m from sale of 9.88 million Critical Metals shares in Q4 2025
- High-grade rare earth element drilling confirms strong TREO and HREO grades at Tanbreez
- Ongoing exploration in Austria and Ireland advancing lithium project portfolios
- Wolfsberg Project gains environmental progress and secures BMW supply agreement
- Legal dispute ongoing over Ukrainian Dobra Project ownership
Financial Strengthening Through Strategic Share Sales
European Lithium Limited (ASX, EUR) has significantly enhanced its financial position in the December 2025 quarter by selling nearly 10 million shares in Critical Metals Corp (NASDAQ, CRML), raising gross proceeds of approximately US$121 million (A$184.6 million). This followed a subsequent sale of an additional 5 million shares post-quarter, adding roughly A$118 million to its coffers. These transactions have reduced European Lithium’s stake in Critical Metals below 50%, leading to a change in accounting treatment from consolidation to equity accounting.
As of late January 2026, European Lithium holds over 48 million shares in Critical Metals, valued at around US$672 million (A$964 million) based on recent share prices, underscoring the substantial market value of this strategic investment.
Exploration Success at Tanbreez Project Bolsters Rare Earth Prospects
On the operational front, European Lithium’s partner Critical Metals has reported exceptional diamond drilling results at the Tanbreez Rare Earth Project in Greenland. The 2024 and early 2025 drilling programs have confirmed consistent high-grade rare earth element (REE) mineralisation, with Total Rare Earth Oxide (TREO) grades ranging from 0.35% to 0.77%, and heavy rare earth oxides (HREO) comprising approximately 25-27% of TREO. Notably, gallium oxide and other strategic metals such as hafnium, yttrium, and cerium were also detected in promising concentrations, supporting the project’s multi-commodity potential.
The drilling results reveal a stratiform, laterally continuous magmatic mineralised layer within the kakortokite host rock, with mineralisation confirmed from surface and extending over significant strike lengths. These findings underpin plans to upgrade the mineral resource estimate and advance mine planning studies in 2026.
Advancing European Lithium’s Broader Exploration Portfolio
Beyond Greenland, European Lithium is actively progressing its lithium exploration projects in Austria and Ireland. The Austrian portfolio, comprising the Bretstein-Lachtal, Klementkogel, and Wildbachgraben projects, covers over 114 square kilometres in a geologically prospective region near Critical Metals’ Wolfsberg Lithium Project. Recent mapping and sampling have identified spodumene-bearing pegmatites with lithium oxide contents up to 3.98%, with drilling planned to further define these targets.
In Ireland, the Leinster Project has commenced an extensive 9–10-month sampling program targeting lithium, caesium, and tantalum-bearing pegmatites. Field crews have collected over 200 samples for geochemical analysis, with initial assay results expected in the coming quarter.
Wolfsberg Project and Strategic Partnerships
The Wolfsberg Lithium Project in Austria continues to advance, having received a decree that fast-tracks environmental approvals, although recent legal challenges by NGOs and municipalities have introduced some uncertainty. The project benefits from a binding long-term supply agreement with BMW AG for battery-grade lithium hydroxide, highlighting its strategic importance in the European electric vehicle supply chain.
Additionally, a joint venture with Saudi Arabia’s Obeikan Investment Group is underway to develop a lithium hydroxide processing plant, with engineering design work progressing. This plant aims to convert spodumene concentrate from Wolfsberg into battery-grade lithium hydroxide, potentially producing up to 20,000 tonnes annually.
Legal Challenges in Ukraine and Corporate Developments
European Lithium faces regulatory and legal hurdles in Ukraine, where its subsidiary’s bid for the Dobra Lithium deposit was controversially awarded to another party despite claims of a superior bid and court rulings supporting European Lithium’s license ownership. The company is actively pursuing legal remedies in Ukrainian and international courts.
On the corporate front, European Lithium has undertaken an on-market share buyback, repurchasing nearly 24 million shares during the quarter, and issued new securities through option exercises and performance rights conversions, strengthening its capital structure.
Bottom Line?
European Lithium’s robust cash position and promising exploration results set the stage for pivotal developments, but legal uncertainties in Ukraine and market fluctuations in Critical Metals shares warrant close investor attention.
Questions in the middle?
- How will the ongoing legal dispute over the Dobra Project in Ukraine impact European Lithium’s asset portfolio and valuation?
- What are the implications of Critical Metals’ share price volatility on European Lithium’s investment value and future funding capacity?
- When will the assay results from Ireland’s Leinster Project be released, and could they reveal new lithium resources to complement existing projects?