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European Lithium secures A$10M funding to fast track Wolfsberg feasibility study

European Lithium Ltd. secured A$10 million funding to fast-track a definitive feasibility study at the Wolfsberg lithium project in Austria, it said Sept. 7.

The facility entered with MEF I LP through the issue of convertible securities allows for A$2.5 million to be funded immediately, with a further A$7.5 million available in A$2.5 million tranches upon meeting milestones relating to the feasibility study.

The moves came following the recent developments, including pre-feasibility study results that pegged the project's net present value at US$154.8 million, as well as ongoing negotiations to secure a European strategic partner.

The loan will ensure the company is fully funded to complete the definitive feasibility study on Wolfsberg in case talks for a strategic partner result in alternative funding, such as a cash injection.

The notes bear no interest and are convertible at any time at the lower of 30 Australian cents or a 15% discount from the lowest value weighted average price over 10 days prior to the conversion date. The notes have a maturity date of 12 months.

Once drawn down, the company will have the option to repay the loan at 110% premium to face value within 180 days of investment and at 115% thereafter.

European Lithium kicked off the scope of work on the Wolfsberg DFS, which is scheduled for completion in April 2019.

As part of an optimization process, European Lithium will conduct drilling to increase the measured and indicated resource at Wolfsberg. A successful drill program will allow the company to undertake the feasibility study at the higher mining rate of 800,000 tonnes per annum and improve project economics.