Shares in a new lithium hopeful surged higher today after the company announced that they secured its first deal with a luxury European car maker.
European Lithium reported it has signed a non-binding memorandum of understanding (MOU) with BMW, securing its first offtake of battery grade lithium hydroxide (LiOH). This precursor deal will have both companies looking to find agreeable terms for BMW to purchase LiOH from them. BMW will have the first right to purchase 100% of the LiOH produced from the identified resources.
Should the parties agree to a binding contract, BMW will pay US$15 million upfront. European Lithium will repay that through equal set offs against the LiOH it delivers to BMW. The ASX lithium share said it will use the proceeds from the prepayment to develop its Wolfsberg Project. That includes supporting the commencement of the construction phase.
European Lithium chairman, Tony Sage, stated:
“Securing our first offtake with BMW AG is another key milestone for the company. Partnering with BMW AG is an ideal fit for EUR”.
European Lithium said no assurance is given that the non-binding MOU will progress to a binding contract.
European Lithium stated:
“Securing its first offtake is a key milestone allowing the company to focus on the final steps of development and implementation of the Wolfsberg Project while it looks to the future and builds a portfolio of prospective battery metals projects located in Europe.”