European Lithium’s Stake Surges on Saudi Rare Earths Venture

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Shares of European Lithium experienced significant upward momentum this week, driven primarily by a major development at its substantial holding in Critical Metals Corp. The move highlights how the value of this investment is becoming a central focus for the company's overall valuation.

The equity opened trading on Monday at A$0.28, climbing to an intraday peak of A$0.305 before settling at a closing price of A$0.295. This represented a single-day gain of 9.26%. Trading volume reached 13.12 million shares, slightly below the average daily volume of approximately 15 million.

The following day, the stock demonstrated resilience, maintaining its level within a range of A$0.275 to A$0.30 on heightened volume of 18.1 million shares. It closed unchanged at A$0.295.

A Standout Year-to-Date Performance

European Lithium's share price has demonstrated remarkable strength in 2026, delivering a return of roughly 90% since the start of the year. Viewed over a twelve-month horizon, the advance exceeds 270%, vastly outperforming the broader S&P/ASX 200 Index. The 52-week trading range, from a low of A$0.034 to a high of A$0.485, underscores the high volatility typical of exploration and development companies within the lithium sector.

The Catalytic Saudi Arabian Joint Venture

The recent rally was triggered by an announcement from Nasdaq-listed Critical Metals Corp on January 15. The company signed a non-binding term sheet to establish a 50/50 joint venture with the Saudi Arabian industrial conglomerate Tariq Abdel Hadi Abdullah Al‑Qahtani & Brothers Company (TQB), a firm with a 75-year operational history.

The core of this partnership involves constructing a rare earths processing facility with a projected investment of up to US$1.5 billion. This project is intrinsically linked to the Tanbreez deposit in Greenland, one of the world's largest known rare earths resources. For Critical Metals, the venture represents a crucial step toward industrializing the project, creating a substantial potential value lever for its largest shareholder, European Lithium.

A Holding Worth More Than the Parent Company

European Lithium currently holds 53,036,338 common shares in Critical Metals, equating to a 44.982% ownership stake.

Key valuation metrics illustrate a compelling situation:

• Holding Size: 53.0 million Critical Metals shares
• Ownership Percentage: 44.982%
• Valuation Basis: Critical Metals closing price on January 16: US$17.25
• Holding Value: Approximately US$914.9 million (A$1.36 billion)
• European Lithium's Market Capitalization: Approximately A$506 million

Notably, the market valuation of European Lithium's stake in Critical Metals alone significantly exceeds the total market capitalization of European Lithium itself. This disparity is bringing the value of the investment into sharper focus, especially as the Saudi joint venture fundamentally improves the prospects for the Tanbreez project.

Strengthening the Capital Structure

Concurrent with the positive news from its associate company, European Lithium applied to the ASX for the quotation of 17.5 million new, fully paid ordinary shares. These shares resulted from the exercise and conversion of existing options and convertible instruments, thereby increasing the public float.

This move enhances the company's capital flexibility as it continues to advance its core lithium projects in an increasingly competitive battery materials market.

Project Portfolio and Strategic Assets

Beyond its pivotal stake in Critical Metals, European Lithium maintains a portfolio of additional lithium-focused exploration and development projects in Austria, Ukraine, and Ireland, alongside various Australian ventures.

The Wolfsberg Lithium Project in Austria, now held through Critical Metals, is considered a strategically significant European asset with all necessary permits in place. This fully permitted status in a politically stable jurisdiction provides a distinct advantage in a European market where such assets are limited.

Forward Look and Key Dates

The next scheduled financial update is the upcoming results presentation in March. Currently, the consensus analyst rating for European Lithium is "Hold," with a price target of A$0.27. Given the new joint venture announced by Critical Metals, a reassessment of these ratings is possible as the details and framework of the project become more concrete.

Operationally, the progress of the Critical Metals-TQB joint venture will be the decisive factor. As the financing, timeline, and structure of the rare earths processing plant are clarified, the market will be better able to quantify the potential value accretion for European Lithium's substantial holding.