European Lithium's Greenland Rare Earth Bonanza Drives Merger Push and 177% Stock Rally

European Lithium shares surge 177% YTD as merger with Critical Metals Corp nears for Greenland's Tanbreez rare earths project, valued at $3B, with shareholder vote in late August.

The stars are aligning for European Lithium as its planned takeover by Critical Metals Corp. draws closer, powered by a Greenland rare earths project that boasts a $3 billion net present value. The stock has surged nearly tenfold from its June 2025 low and is up 177% year to date, reflecting investor enthusiasm for the Tanbreez project—one of the world’s largest undeveloped rare earth deposits. Geopolitical tailwinds are also helping: G7 nations have pledged to cut their reliance on non-G7 sources of rare earths to below 60% by 2030, putting Greenland squarely in the spotlight.

At the heart of the transaction is Tanbreez in southern Greenland, where Critical Metals already holds a 92.5% stake. The resource is staggering: 4.7 billion tonnes of mineralised rock containing an estimated 28.2 million tonnes of rare earth oxides, of which more than 27% are the highly sought-after heavy rare earths. A preliminary economic assessment puts the project’s pre-tax net present value at roughly $3 billion and its internal rate of return at 180%. CEO Tony Sage expects first customer deliveries by 2029, with a pilot plant scheduled to start up as early as May 2026. The mining licence runs until 2050, and a 10,000-metre drilling programme is already under way. Hafnium has been identified as a valuable by-product. To help fund development, the US Export-Import Bank has signalled interest in providing up to $120 million in credit.

The mechanics of the merger are now on a clear timetable. Under a binding implementation agreement signed in May, Critical Metals will acquire all shares and options of European Lithium. Shareholders will receive 0.035 Critical Metals shares for each European Lithium share they own. An independent expert, Nexia Perth Corporate Finance, is assessing the offer, and an information document is expected to be sent to shareholders by the end of July 2026. Crucial shareholder meetings are slated for late August, with the takeover set to take effect in early September. Beyond gaining full control of Tanbreez—European Lithium currently holds a 7.5% stake—Critical Metals will also pocket the target’s hefty cash pile, which stood at A$306 million at the end of March.

The merger is unfolding against a supportive backdrop for lithium prices. The spot price for lithium carbonate is currently around $20,000 per tonne, providing a comfortable margin for European projects; Finland’s Keliber mine, for example, has a break-even cost of $12,000 per tonne. European Lithium’s own share price has benefited from the momentum. The stock now trades at €0.26, roughly 78% above its 200-day moving average. While that is still 15% below the 52-week high of €0.31 touched in early June, the relative strength index of just under 52 points to neutral momentum, leaving room for further upside as the merger vote approaches.

With the Tanbreez project carrying a $3 billion valuation and a clear path to production from 2029, the combination of European Lithium’s cash and Critical Metals’ majority stake creates a vertically integrated rare earths player focused on a resource that is geopolitically as valuable as it is mineralogically rich. Investors now have just a few weeks to digest the independent expert’s report before heading to the ballot box in August.