European Lithium Ltd (ASX:EUR, OTCQB:EULIF) has unveiled plans to undertake an on-market buyback of up to 135 million ordinary shares — roughly 10% of its issued capital — in a move the board says will deliver value for shareholders.
Based on the company’s closing price on September 30, the program would represent a cash cost of about $12.6 million.
Executive chairman Tony Sage said the buyback was underpinned by a belief that the company’s current market valuation did not reflect the strength of its underlying asset base, including its 60% stake in Critical Metals Corp., with exposure to the Tanbreez rare earths project in Greenland.
“The board believes the company’s current share price does not reflect the underlying value of the company’s assets,” Sage said.
“The current market value of the company’s holding in Critical Metals Corp. is approximately $678 million at yesterday’s closing price,” he added. “In the board’s view, the buyback therefore represents a fantastic opportunity to buy shares back at a significant discount and add value to our remaining shares on issue.”
Buyback details
European Lithium intends to commence the share repurchase program no earlier than October 17, 2025, with an outside deadline of March 31, 2026.
Purchases will be made at the company’s discretion, subject to prevailing market conditions, trading volumes and other considerations. The board has reserved the right to suspend or terminate the program at any time.
The buyback falls within the “10/12 limit” permitted by the Corporations Act 2001, meaning shareholder approval is not required. Evolution Capital Pty Ltd has been appointed to manage the execution.
Strengthened position after Tanbreez deal
The capital management initiative comes just a day after European Lithium announced it had secured full control of the Tanbreez rare earths project in Greenland through an amended deal with Nasdaq-listed Critical Metals Corp. That transaction gives European Lithium, through its stake in Critical Metals, greater exposure to what is considered one of the world’s largest undeveloped rare earth deposits.
With the value of that holding highlighted at A$678 million, European Lithium’s board is aiming to align its share register more closely with the company’s asset strength.
Management expects the initiative to enhance capital efficiency and deliver long-term value to shareholders, while maintaining flexibility to respond to market dynamics.