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Shares in Tony Sage’s European Lithium soar on BMW partnership

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Danielle Le MessurierThe West Australian
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Tony Sage’s European Lithium has struck a deal with BMW.
Camera IconTony Sage’s European Lithium has struck a deal with BMW. Credit: Paul Kane/Getty Images

Shares in Tony Sage’s European Lithium lifted after the company announced it would partner with BMW to supply its first offtake of battery grade lithium hydroxide.

In a statement to the ASX, the company said it had signed a non-binding memorandum of understanding with the European car giant as it seeks to decarbonise its supply chains.

It will see the two companies work together to “negotiate suitable commercial terms” for BMW to purchase the lithium hydroxide produced by European Lithium. If a deal goes ahead, BMW will pay $US15 million upfront, which will be repaid through deliveries of the battery chemical.

“Securing out first offtake with BMW AG is another key milestone for the company. Partnering with BMW AG is an ideal fit for EUR,” Mr Sage, also the owner of Perth Glory, said on Friday.

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Proceeds from the prepayment will be used to fund the development of European Lithium’s Wolfsberg lithium project in Carinthia, 270km south of Vienna, Austria, including supporting the construction phase.

Wolfsberg is expected to produce over 10,000 tonnes per annum of lithium hydroxide at a mining rate of about 800,000tpa. The company believes the project is well placed to target the largest lithium import markets in the European Union.

European Lithium said that while it was negotiating binding agreements with BMW “no assurance is given that any binding agreements will be entered into”.

That didn’t stop European Lithium shares from soaring to their highest level since May. The stock closed 7.32 per cent higher at 8.8¢ after earlier spiking to 10¢.

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