European Lithium Crosses Cash Threshold for Critical Metals Merger, but Wolfsberg Setback and Morgan Stanley Exit Cloud Progress

European Lithium satisfies $330M net-cash condition for $835M Critical Metals merger via share sale, but stock drops 6.5%. Greenland approvals advance; Wolfsberg faces delay.

European Lithium has ticked off one of the most important boxes in its planned merger with Critical Metals Corp, but the market was unimpressed. The stock slid 6.52% to close at A$0.43 on 12 May, even as the company revealed it now holds enough cash to satisfy a key condition for the all-share deal valued at US$835 million.

The cash buffer came from the sale of 2.5 million Critical Metals shares, which generated A$45 million. That pushed European Lithium’s total liquid assets to roughly A$356 million, well above the A$330 million net-cash floor required to close the transaction. The move was necessary because, at end of March, the company had only A$306 million in the bank – a shortfall of around A$24 million that had threatened to stall the merger. An exclusivity agreement with Critical Metals had meanwhile blocked any external fundraising, so the share sale was effectively the only option to bridge the gap.

Greenland approvals move forward on two fronts

Regulatory progress in Greenland is gathering pace. The government in Nuuk has approved the transfer of European Lithium’s stake in the Tanbreez rare earths project to Critical Metals, which now holds 92.5% of the deposit. European Lithium retains a 7.5% interest. Tanbreez is widely regarded as one of the world’s largest undeveloped rare earth occurrences.

Separately, the company has been given the green light to acquire a 70% interest in 60° North Greenland, the logistics firm that will provide essential infrastructure for Tanbreez. Without that support, any mining operation would be virtually impossible. A pilot plant in Qaqortoq is already built, but operations are pending final regulatory sign-off. If that comes in time, a critical 150-tonne bulk sample is scheduled for June.

Wolfsberg: a step forward and a step back

In Austria, the picture is more complicated. The Kärnten state government has ruled that the Wolfsberg lithium project does not require a full environmental impact assessment because the planned surface area stays under 10 hectares. That should shorten the permitting timeline significantly, and the company sees Wolfsberg as the first new mining project in the EU to benefit from this faster track.

But European Lithium also suffered a setback when the Federal Administrative Court overturned an existing environmental permit for the project. As a result, the final investment decision has been pushed back to the end of 2026. The offtake agreement with BMW remains intact, but the delay puts pressure on the timeline for Europe’s battery supply chain.

Big shareholder exits as stock retreats

Morgan Stanley has completely exited the register. The US bank sold down its stake in late April, falling below the disclosure threshold and disappearing from the shareholder list. The selling contributed to a recent downturn in the share price, though the stock still trades roughly 205% higher year-to-date.

European Lithium continues to hold 45,536,338 CRML shares, worth about US$689 million at current levels, and management has stated it plans no further sales for at least four months. The company also has an active share buyback programme in place, with authorisation to repurchase up to A$12.6 million worth of its own stock.

Merger clock keeps ticking

The transaction is structured as a scheme of arrangement. Under its terms, European Lithium shareholders will receive 0.035 new CRML shares for each European Lithium share they own. A shareholder vote is planned for the third quarter, with completion targeted for the second half of the year.

The cash condition may be satisfied, but other obstacles remain. The Austrian court ruling, the exit of a major institutional investor, and the still-pending final approvals in Greenland mean the path to closing is far from smooth. European Lithium’s A$356 million cushion at least removes one source of uncertainty – and gives management some breathing room as it navigates the rest.