European Lithium Bolsters Balance Sheet with Strategic Stake Sale

European Lithium has significantly strengthened its financial position through a major divestment, securing substantial new capital without diluting existing shareholders. With fresh funds now available and a lithium market showing signs of recovery, the company's financial footing appears more robust. The key question for investors is how management intends to deploy this enhanced liquidity.

In an announcement made on Tuesday, European Lithium revealed it had sold five million shares in NASDAQ-listed Critical Metals Corp (CRML). This transaction generated net proceeds of approximately 124 million Australian dollars (AUD). As a result, the company's total cash reserves have swelled to an impressive 322 million AUD.

This method of raising capital is particularly noteworthy for shareholders. Rather than opting for a potentially share-price-dilutive equity offering or taking on additional debt, the company monetized a portion of a strategic asset. This approach provides European Lithium with considerable flexibility to advance its core project development plans.

Retained Stake Holds Substantial Value

Despite this sale, European Lithium maintains a significant holding in Critical Metals Corp. The company continues to hold over 48 million CRML shares. Based on CRML's closing share price of $17.17 on January 20, 2026, the market value of this remaining stake is estimated at around 1.23 billion AUD.

Should investors sell immediately? Or is it worth buying European Lithium?

Executive Chairman Tony Sage characterized the divestment as validation of the company's successful investment in the Tanbreez project, which is held through Critical Metals. He expressed confidence that European Lithium's share price would begin to reflect this considerable underlying asset value. The broader market context is supportive: the lithium sector is displaying early signs of a rebound in 2026, with spodumene concentrate prices having climbed more than 25% since the start of the year.

Strategic Deployment of Capital

Management has indicated that the primary use of the proceeds will be to reinforce the company's balance sheet and fund the ongoing advancement of its key projects. European Lithium is also keeping its options open to pursue new strategic opportunities or potentially return capital to shareholders at a later date.

Investors can expect more detailed operational updates with the forthcoming second-quarter report. The company has scheduled the release of this financial update for March 12, 2026.