European Lithium Ltd (ASX:EUR, OTCQB:EULIF) is gaining traction in the lithium and rare earth sectors in its namesake target market, says Martin Place Securities, with a series of strategic initiatives placing it on a growth trajectory.
The key drivers of this growth include the company’s Wolfsberg Lithium Project, a diverse portfolio that spans across Europe, and a listing on the Nasdaq.
The company’s market capitalisation, as of January 30, stands at A$117 million.
Revaluation due
In its appraisal, Martin Place Securities suggests that the company's stock is currently trading below its see-through asset backing of around A$0.80, indicating room for a substantial market revaluation.
The report sets a value target of A$0.58 per share for by the end of 2025.European Lithium Ltd (ASX:EUR, OTCQB:EULIF)
Martin Place Securities sees European Lithium as uniquely positioned to play a significant role in the European Union's clean energy transition, especially with the EU's target to phase in electric vehicles by 2035.
The company's diversified portfolio, strategic partnerships and involvement in critical mineral projects such as the Wolfsberg Lithium Project and the Tanbreez REE deposit, place it at the forefront of an industry poised for growth.
Nasdaq milestone
European Lithium’s flagship asset, the Wolfsberg lithium spodumene mining project, is slated for a Nasdaq listing, which is expected to impart a fully diluted value of A$0.61 per share, considerably enhancing the company's market presence.
The project, situated in Austria with a production capacity of 8.8ktpa LHM, is poised to become the first European Union producer of battery-grade lithium.
A March 2023 definitive feasibility study (DFS) pointed to a net present value (NPV) of US$1,504 million, bolstered by high lithium hydroxide (LiOH) prices.
“Wolfsberg would be one of the first operating lithium mines in Europe where EU regulations for the energy transition call for growing a major lithium industry to assist in the phasing in of electric vehicles there by 2035,” the report said.
“BMW, recognising the need for security of supply, has entered into an offtake agreement with a US$15 million prepayment for all of the Wolfsberg Zone 1 output for its own battery manufacturing centre in Germany.”
The company also has plans to access the largest lithium resource in Ukraine, which is also potentially one of Europe’s largest hard rock lithium resources.
The report suggests that, following a resolution to the conflict in that country, an EU-Ukraine strategic partnership on critical raw materials could sponsor this development of the Shevchenkivske and Dobra deposits.
