European Lithium Ltd (ASX:EUR, OTCQB:EULIF) has marked another key milestone as it agrees to pursue a cooperation and offtake partnership with Traxys Europe S.A. to develop the Wolfsberg Lithium Project in Austria.
It has signed a multi-tiered non-binding Memorandum of Agreement (MoA) with Traxys to support the development and commercialisation of the Wolfsberg Project.
Traxys will retain exclusivity until the end of the first quarter of 2022 to finalise an offtake agreement with European Lithium.
Traxys aims to leverage its banking relationships to support European Lithium to structure appropriate project financing and provide working capital to the project.
It will also be considering a direct investment in the company.
Another key milestone
European Lithium’s chairman Tony Sage said: “Finalising an offtake agreement is another key milestone for the company and will add to recent developments at the Wolfsberg Project.
“In the current high lithium price environment, partnering with Traxys and leveraging their expertise will achieve the best result for shareholders while the company retains flexibility."
Offtake deal
Under the MoA, European Lithium will work with Traxys to negotiate suitable commercial terms for a product offtake and/or marketing agreement for its lithium hydroxide and, if applicable, any by-products from the Wolfsberg Project.
Project financing
The cooperation will also include Traxys’ support to secure working capital and other project financing facilities for the development of the Wolfsberg Project.
Traxys has already introduced the company to financial institutions in relation to project finance that have opened direct communications with potential lenders.
European Lithium and Traxys shall pursue expanding their cooperation to include Traxys financing of project product flows end-to-end along with logistical and risk management solutions for the project and products.
Both parties will also discuss the potential for a direct investment by Traxys and for further aligning their interests for the successful commercialisation of the Wolfsberg Project.
Traxys
Traxys is part of the Traxys Group, an international client-focused commodities merchant with global presence that provides effective market access and solves complex supply chain, distribution and financing challenges for a wide range of clients on a cooperative and transparent basis across a diverse array of metals and minerals.
It operates from a network of offices and facilities in over 20 locations worldwide, has around 450 employees, serves more than 2,000 customers and 800 suppliers, and has comprehensive global coverage encompassing all key markets: Europe, Asia, North America, South America, Africa and Australasia.