European Lithium Ltd (ASX:EUR) (FRA:PF8) (VIE:ELI) is set to add to its strategic lithium endowment in the heart of Europe after entering a Collaboration Agreement with Jadar Resources Ltd (ASX:JDR) (FRA:R1E) on its Austrian tenements.

This agreement sees EUR acquire a 20% interest in Jadar’s Austrian lithium assets – the Weinebene and Eastern Alps projects – from their JV partner.

These projects are adjacent to EUR’s Wolfsberg Lithium Project and the new arrangement creates optionality and potential synergistic development and production scenarios for both parties.

It will also enhance the capacity of the new partners to better serve Europe’s desire for self-sufficiency as it builds a cleaner and greener continent through electric vehicles and energy storage.

“Potential synergistic benefits”

European Lithium’s chairman Tony Sage said: “This is a fantastic result and gives European Lithium access to a greater portfolio of highly prospective Austrian lithium projects which have the potential to increase the useful life of the proposed infrastructure for our Wolfsburg Lithium Project.

“The proximity of Jadar’s lithium projects to Wolfsberg presents a number of potential synergistic benefits for both companies and we look forward to beginning work to further the exploration activities at the projects.”

This collaboration comes as EUR continues drilling at Wolfsberg aiming to upgrade and increase the JORC-compliant lithium reserve within the project with this work on schedule and tracking below budget.

The final definitive feasibility study (DFS) metallurgical work at Wolfsberg is also on track and expected to be finalised in July.

To sell 20% interest to EUR

Jadar, which holds an 80% interest in subsidiary Jadar Lithium GmbH, the holder of the Weinebene and Eastern Alps projects, has waived its first right of refusal over the remaining 20% interest in the subsidiary.

This has allowed Exchange Minerals Limited (EML) to sell its 20% interest to EUR for consideration of A$125,000 cash and 6,666,666 fully paid ordinary shares in the capital of the company with one attaching option exercisable at A$0.075 each on or before July 31, 2022.

The Weinebene and Eastern Alps lithium projects are only 20 kilometres to the east EUR’s Wolfsberg Project with JORC-compliant mineral resources of 11 million tonnes at 1% Li2O and provide both parties with optionality in terms of future development and production scenarios.

“Key strategic partner”

Jadar Resources’ executive director Adrian Paul said: “This partnership and Collaboration Agreement formed with European Lithium will allow Jadar to progress our Austrian lithium assets with the assistance of a key strategic partner with significant JORC-compliant resources neighbouring our exploration assets.

“We are thrilled to have the opportunity to work with European Lithium and develop detailed exploration programs which will see these projects progress further.”

Overlaps in some areas

The Weinebene project is in some areas overlapping and also adjacent to the Wolfsberg deposit and EUR postulates that the veins which comprise the JORC-compliant resource, strike into the Jadar´s Weinebene project area.

Last November Jadar announced that a maiden stratigraphic diamond drill hole program had been completed at Weinebene and this program allowed the company to renew the Austrian tenement for a future five-year term.

At the time it said: “… Initial boulder sampling results returned high-grade Li2O values with the highest value returning 3.39% Li2O and the average value over the 11 samples from the Weinebene project being 1.61% Li2O.

“As the samples were not collected from outcrops, but rather boulders, the company cannot be 100% certain that the boulders represent the strike extensions of the veins.

“The geological evolution of the area did not include any glaciation and associated transportation of large boulders. This encourages the interpretation that the sampled boulders are located near the pegmatite veins. …”.

Two out of the 11 grab sample locations showing the 3.39% result are on overlapping exploration licences between ECM and Jadar, where ECM owns the rank 1 exploration rights.

This demonstrates the potential advantage for EUR to achieve a common exploration effort to potentially extend its resource base.

Eastern Alps Project

The Eastern Alps Lithium Project licences are in southern Austria about three hours southwest of Vienna.

These prospects contain indications of high-grade lithium targets with strong residual brownfields plus greenfields exploration potential across the entire 64.1 square kilometres project area.

The company has also identified several prospect areas within the Eastern Alps projects that require follow-up evaluation and drill testing.

Technical Advisory Committee

Completion of the transaction is subject to Jadar waiving all pre-emptive rights over EML’s interest in Jadar Lithium and consenting to the transfer, and confirmation of no breach of warranties by EML.

The Collaboration Agreement includes the establishment of a Technical Advisory Committee for the purpose of jointly collaborating in connection with the Weinebene and Eastern Alps projects and sharing information to identify the best options to advance those assets and operations.

This includes making recommendations for exploration programs, budgets and development scenarios in relation to the assets and operations.

The committee will consist of three members in total, including up to two representatives appointed by EUR.

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