European Lithium Limited (ASX: EUR), an Australian Stock Exchange listed lithium explorer, announced on 10th May 2019 that the company would undertake a placement at an issue price of $0.09 per share to raise capital up to 1.5 million euros (before expenses). The company mentioned that the placement would be offered mainly to European based sophisticated investors. The fund raised by the placement will be utilised in a DFS (Definitive Pre-Feasibility Study) of the Wolfsberg Lithium project situated in Austria.
On 30th April 2019, the company confirmed that it had issued 566,965,947 ordinary shares of no-par value and mentioned that each share contains one voting right. As per the company, it does not hold any ordinary shares in treasury.
Wolfsberg Lithium Project:
The company completed the preparation for the DFS drilling program, intending to convert the 10.98mt JORC resource of Zone 1 into Measured and Indicated category. European Lithium applied for additional deep holes (greater than 300m depth) at relevant authorities and the approval of which is expected to be received in the second or third quarter of the year 2019, post completion of the stage 1 shallow drill program.
European Lithium planned the drilling and mobilised the drill rigs with the same aim of converting 10.98mt of resource into Measured and Indicated segment. The Zone 1 drilling program would allow the DFS to be envisaged at a higher mining rate of max 800,000 tonnes per annum.
SRK Consulting, an independent Consultant, completed the scope work for the optimised mine design and increased declaration of mineral reserves, and Dorfner/Anzaplan completed the pilot testing plant and started the metallurgical test work. The metallurgical work will assess and optimise the process lines, flowsheets and layouts, to ensure a high-quality lithium hydroxide is produced.
As per the company, DRA Global is assessing and reviewing the work independently to conclude the research promptly.
However, the current efforts of the company to produce the high-quality lithium hydroxide in terms of fundraising and DFS at the prospect could mark a hiatus amid slower growth of lithium hydroxide demand in the global market than initial expectations of the producers.
The company holds an A$10 million finance facility to fast-track the completion of a DFS at the Wolfsberg Lithium Project and drawn A$2.5 million on 14th September 2018 and mentioned that the rest A$7.5 million is available to the company in tranches upon it meeting critical milestones relating to the DFS.
The allotment of convertible securities secured an A$10 million finance facility to the company, and the current Magna investors converted 652,458 notes during the quarter. As on 31st March 2019, the Magna investors had 988,042 remaining convertible notes.
The company further plans to get listed on the Vienna Stock Exchange and is currently exploring the options regarding the same.
The shares of the company last traded at A$0.099 (as on 10th May 2019), down by 5.174% from its previous close. The company has a market capitalisation of A$59.53 million with 566.97 million shares outstanding.
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