European Lithium Issues 6.7 Million New Shares as It Inches Closer to Critical Metals Merger Cash Target

European Lithium adds 6.7 million shares via early option exercises to narrow a A$24 million shortfall ahead of its Critical Metals Corp. merger, as Tanbreez construction advances and Wolfsberg faces a permit reversal.

European Lithium has added roughly 6.7 million new shares to its ASX listing, the bulk of them stemming from the early exercise of options. The move comes at a pivotal moment: the company is racing to meet a A$330 million cash requirement that must be satisfied before its planned takeover by Critical Metals Corp. can close in the second half of 2026.

The newly issued equity is divided into three tranches. Around 2 million unlisted options were exercised at A$0.12 apiece, 4.66 million listed options at A$0.10, and a further 6,000 or so at A$0.08. Most of these instruments were not due to mature until late 2026 or 2027, so the early exercise appears strategically timed to bolster the company’s balance sheet ahead of the merger.

Cash Gap Narrows but Still Needs Plugging

Current cash and equivalents stood at roughly A$306 million as of the end of March 2026, leaving a shortfall of about A$24 million against the A$330 million closing condition. The option exercise will bring in a modest injection, though the exact total from the 6.7 million shares — at the various strike prices — amounts to only a few million Australian dollars. Still, every incremental addition helps as management prepares for the shareholder vote scheduled for the third quarter.

European Lithium already owns approximately 31% of Critical Metals Corp., the Nasdaq-listed entity that will absorb it. Under the terms of the transaction, that stake will be cancelled upon closing to prevent dilution. For each European Lithium share held, investors will receive 0.035 shares of Critical Metals. A shareholder meeting to approve the deal is expected in the third quarter.

Tanbreez Ramps Up While Wolfsberg Faces a Legal Detour

The strategic rationale for the merger hinges heavily on the Tanbreez rare-earth project in southern Greenland, in which Critical Metals holds a majority interest and European Lithium a 7.5% minority. Construction is now visibly underway: foundations for a pilot plant are being laid, camp infrastructure is being built near Qaqortoq airport, and new drilling rigs have been assembled. The first phase of construction is due for completion in August 2026. Under the merger, European Lithium’s Tanbreez stake will pass to Critical Metals.

In Austria, however, the Wolfsberg lithium project — touted as Europe’s first fully permitted lithium mine — hit a regulatory pothole. Austria’s Federal Administrative Court in November 2025 overturned a key permit, ruling that exempting projects under ten hectares from a full environmental impact assessment was incompatible with EU law. The state of Carinthia must now conduct a case-by-case review. On a more positive note, federal authorities extended the mining license for two years in February 2026. A final investment decision for Wolfsberg is targeted for the end of 2026, dependent on market conditions and project financing.

Share Price Volatility Reflects the Uncertainty

Recent sessions have done little to steady the stock. European Lithium shares changed hands at €0.26 on Friday, a decline of 4.2%, though the price remains about 25% above its 50-day moving average of €0.21. The year-to-date gain stands at roughly 193%, and over a 12-month period the advance exceeds 860% — a rally that started from a 52-week low of €0.02. The annualized 30-day volatility of over 142% underlines just how choppy the ride has been.

With the cash shortfall still a live issue and regulatory clarity on Wolfsberg pending, the path to the Critical Metals merger remains strewn with conditions. The option exercise may have trimmed the liquidity gap, but whether it closes entirely before the deal’s targeted completion depends on further capital moves or a sustained share price that could allow additional equity-raising without excessive dilution. For now, the countdown to the third-quarter shareholder meeting continues.