European Lithium Ltd has welcomed the news that the board of directors of US-based subsidiary Critical Metals Corp (Nasdaq: CRML) has approved a comprehensive bitcoin (BTC) treasury strategy, executing a BTC convertible note for up to US$500 million.
The company – which is focused on development of critical metals, minerals exploration and mining projects essential to electrification and next-generation technologies for the western world – may access up to $500 million to purchase bitcoin, with $100 million closing in the first tranche, which is also available to purchase bitcoin.
First to adopt bitcoin
This makes Critical Metals Corp one of the first Nasdaq-listed critical minerals companies to make the move to bitcoin as a primary treasury reserve asset, and certainly the first owned by a company on the ASX.
Importantly, CRML has non-recourse against a drop in the bitcoin price. This means that, because the company’s exposure to the cryptocurrency is through a convertible note, the company is insulated from the downside risk of price volatility.
EUR chair Tony Sage said: “Given the enormous growth and interest in the Bitcoin market, it is strategically important for CRML to have access to funding through this growing market.
“The Micro Strategies approach has been spectacularly successful, and we hope to emulate that success.”
The $100 million first tranche was issued with 100% warrant coverage and subsequent tranches totalling up to $400 million at the buyers’ discretion will have 50% warrant coverage.
The convertible notes are primarily secured by cash raised and any potential BTC purchased in connection with the financing.
These notes are convertible into common stock of the company at a fixed conversion price of $6.00 per share and the warrants are convertible at $7.00.
The convertible note financing was led by JBA Asset Management.
Innovative treasury strategy
“Incorporating a bitcoin allocation to our treasury management strategy is an innovative approach that we believe will strengthen our balance sheet and create long-term shareholder value,” Sage said.
“As the first Nasdaq-listed critical minerals companies to adopt a bitcoin treasury strategy, we believe this approach provides both inflation protection and appreciation potential without dilution risk.
“This strategy aligns with broader Western government initiatives around bitcoin adoption, including President Trump's recent advocacy for a national bitcoin stockpile.
“As a key supplier of critical minerals to western nations, our bitcoin treasury strategy further strengthens our position as a reliable partner in secure supply chains, while protecting our balance sheet from currency debasement risks.”
About Critical Metals
European Lithium holds 66,416,641 (74.30%) ordinary shares in Critical Metals.
Based on the closing share price of Critical Metals being US$8.50 per share as of January 21, 2025, the company’s current investment in Critical Metals is valued at US$564,541,449 (A$897,620,903), subject to fluctuation in the Critical Metals share price.
The company’s flagship asset is the Tanbreez Project in Greenland, one of the world's largest rare-earth deposits.
CRML also owns the Wolfsberg Lithium Project in Carinthia, 270 kilometres south of Vienna, Austria, which makes the company a key player in the lithium-ion battery supply chain in Europe.
With its geostrategic asset portfolio, the company is positioned to become a reliable and sustainable supplier of the critical minerals essential for defence applications, clean energy transition and next-generation technologies in the Western world.